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NFTs and copyright

Learn and understand how copyright can impact the world of crypto art and NFTs

Overview

While an NFT is most likely not protected by copyright, we will see that the underlying artwork can be protected by copyright. There is a misconception that NFTs are art. In fact, NFTs are simply tokens on the blockchain that can be attached to any asset, including works of art - hence the term ''crypto art''.
Every country has a different way to manage what we call “copyright”. In the United States and Canada, when you create an original artwork, you automatically become the copyright holder of that creation. You don’t need to register the creation for it to be protected, contrarily to patents, but registering it could be beneficial for a few reasons, as we will see below.
As mentioned before, certain criteria must be met to be granted copyright protection. In the United States and Canada, copyright protection only extends to the expression of ideas, and not only ideas or concepts. This means you need to “fix” your idea on a medium for it to be protected (don’t worry, this medium can be digital as well). Another important criteria to consider is that your creation must be ''original''. What is considered original is not necessarily related to the beauty of the piece, but rather the skill and judgment necessary to create it, for example.
Owning copyright on a work (digital or not) gives you the exclusive right to produce, reproduce, distribute and allow reproduction by others. This also means you can prevent others from using your creation wrongfully. However, it is important to note that in the United States, you must have registered your copyright to be allowed to file an infringement lawsuit. For that reason, even if it’s not required to register your copyright, it could be useful in the long run.
If you are interested in registering your copyright, you should contact an IP lawyer from your country to seek legal advice.
For more information in main countries, you can visit the United States Copyright Office, the Canadian Intellectual Property Office or the European Union Intellectual Property Office.
To this day, it has not already been determined by the law if NFTs are protected by copyright. However, when interpreting current laws, it appears to be very unlikely that NFTs could be protected by copyright, because they simply represent data on a blockchain. In copyright law, that would not suffice to constitute an "original work of authorship", a criteria we mentioned before. However, the work underlying the NFT can potentially be protected by copyright.
After selling an NFT, you should know that a an artist, you will normally maintain all commercial and intellectual property rights on the work underlying the NFT (unless otherwise stated by you). That means you can still market your art by making prints or producing merch, or even license it to companies.
Don't worry! Your collectors, however, are not allowed to do so. They only have the right to sell, trade or transfer the NFT they collected from you. This means they can’t (unless they have a written authorization from you), mint a copy of the work, make people pay to view the work, sell any derivative object incorporating the work or exploit your work in any commercial way. Collectors can basically only display the NFT for their personal use and enjoyment.
When minting a work on a marketplace, there’s a few things you should consider. The current market mostly depends on the way artists and collectors behave on the blockchain. For that reason, you should always be careful of your actions to ensure the integrity of the market in the future. To make sure you’re respecting copyright laws, ask yourself the following questions before minting a new piece:
  1. 1.
    Is the work you want to mint original, unique, and created by you personally? Minting a non-original work could be considered as infringement of copyright. Minting someone else's work can also be considered as infringement of copyright.
  2. 2.
    Have you created the piece in collaboration with other artists? Make sure you get the authorization from them before minting, because they are also owners of the copyright and could sue you for using their copyright without prior authorization.
  3. 3.
    Did you create this piece as part of an employment or commission agreement? You might not own the copyright on a work you created for someone else as a commissioned piece, or for an employer, because in some countries the copyright is transferred automatically in such situations. As well, if you’ve already licensed or transferred your rights on to someone else, you might want to double check these licenses before minting the piece.
  4. 4.
    Does your work embody, incorporate or is inspired by other people's work? Even a small element taken from someone else's work should ring a bell. Make sure you have the right to use these elements by contacting the owner of the copyright. In copyright law, there are a few exceptions allowing you to use other people’s art (such as if the work is now in the public domain, or if it can be considered fair use). However, it’s always better to get the written permission from the artist or the copyright owner, as these exceptions are difficult to apply and can lead to litigation. See the section ''Public domain and fair use exceptions'' below for more information.
  5. 5.
    Have you already minted the same piece on another NFT marketplace? Once you have minted an NFT on a marketplace, you should never mint it on another marketplace. Think of traditional paintings: an artist wouldn't create a second certificate of authenticity for the same painting, because that would be forgery, but they could go on and create derivative objects from the painting, such as a book or a print. The same rule goes for NFTs. If you ever decide to do so, note that most platforms reserve the right to delete the duplicated NFT or even ban you from their platform.

Public domain and fair use exceptions

Can you use someone else's art to create your own? Technically, you should never copy or use someone else’s work without their prior consent, for the same reasons that you wouldn’t want someone to copy your work and benefit from it without you approving it first.
However, there are some exceptions to this rule. In some particular cases, it can be considered acceptable to mint a piece that contains non original elements (that you haven’t created yourself).
Before benefiting from these exceptions, you should always ask the artist for their permission. The exceptions can be very difficult to apply with 100% certainty, because there aren’t any “guidelines” per say. Most of the time, only a judge can determine in court if these exceptions apply rightfully. That’s why you should always make sure to get the authorization from the artist.
You should also always credit the artist you are incorporating in your artwork. In the description of your NFT, you should refer to the artist and the name of the artwork.
  • Exception 1: Fair use defense
Fair use is simple to describe, but not always simple to apply. Basically, it means that the use you are making of any other artist’s work must be fair for it to be tolerated. Now, the hard part is to determine what is “fair”...
Because this concept varies from one country to another, you should always consult a lawyer if you’re trying to benefit from this exception in order to make sure it can be applied in your situation and check that you’re not infringing someone else’s work.
In all cases, you should at least consider these elements to evaluate if your use of the artwork is “fair”:
  1. 1.
    Your work should have a “transformative” purpose of the original artwork. This means you should be bringing something new to the market, kind of like a remix of a song should not be an identical copy, but a new piece in itself. The “transformative” purpose of your creation should fall into one of these categories: to comment or criticize the copyrighted work, or to make a parody out of it.
  2. 2.
    The work you are appropriating should not be displayed prominently in your work, meaning it should not be the main part of your piece.
  3. 3.
    Remember the fair use exception exists mainly to allow freedom of expression in the world, not to allow people to benefit from the work of others fraudulently.
  4. 4.
    The fair use exception also applies to trademarks. Trademarks are mostly business’ names, logos and slogans. If you wish to use trademarks in your artworks, you must ensure that the use you are making will not confuse people as to who created the piece. People must be aware of the reasons and the purposes of your work (comment, critic or parody). In all, you should not be using someone else’s trademark only to benefit from the traction/attention it will bring to your work.
  • Exception 2: Public domain
Once an artwork is no longer protected by copyright, it falls into what we call “public domain”. There’s a few ways art can become public domain art. It can either become public domain once the copyright expires, or when an artist dedicates his work to be deliberately in the public domain. In most countries including the United States and European Union, copyright lasts for 70 years after the death of the artist. In other countries such as Canada, copyright lasts for 50 years after the death of the artist.
Once a work is in the public domain, it means you can use it freely, without having to request the permission of the owner or even owning the copyright on the piece. You can even sell public domain art as it is, without needing a "transformative purpose". However, note that when you mint an NFT, it should always be your original work. Therefore, you should never mint a public domain piece (unless you’re using only some parts of it). Also note that, for example, even if a piece enters the public domain, it is possible that some photographs of that artwork are not part of the public domain if they were taken later.
As a collector, it is important to know what you’re getting when purchasing an NFT.
As we’ve explained before, the owner of a copyright on a work (most of the time the creator/author) owns the copyright on that work, meaning they can reproduce it, sell it, copy it, distribute it, modify it, or display it publicly.
As a collector, buying an NFT only grants you the right to display the underlying work for personal use (that would be in your home, on your phone, on your computer, etc.) and to sell or transfer the property of the NFT to someone else. So, unless other rights were specifically granted to you, you can’t make commercial use of the artwork underlying the NFT you’re buying.

Key elements to remember

In terms of copyright and NFTs, remember that an NFT does not represent the work itself, but only a token attached to the work, acting as some sort of digital certificate of authenticity. The NFT is a certificate of ownership of the NFT only, not the underlying work. As a comparison, a deed is not a house per say, but only the proof that you own the house. In the end, NFTs are tokens of ownership, and should only be seen as such. Owning an NFT does not mean you own the original work created by the artist. Moreover, this means you should not use it for commercial purposes, such as reproducing it or selling derivative products made from the artwork underlying the NFT.