NFTs and Copyright Laws
The purpose of this article is to provide a brief overview on the NFTs potential implications for copyright holders and copyright law, rather than to present an overall assessment of NFTs and each type of intellectual property.
NFTs have been around for almost a decade but only recently have attracted publicity, mostly due to the wider inception of the Blockchain technology and digital technologies expotential growth and mass adoption. The NFTs can be marketed or otherwise offered for sale to buyers after the NFT is created, interested parties must have digital wallets capable of receiving and retaining such digital assets, in the same manner as to how physical wallets are designed to retain traditional fiat currencies. The process of creating an NFT (”minting”) encompasses an underlying creative work such as works of music, photos, videography and others. Such works can be created with limited or unlimited number of copies, which of course affects the supply and demand market dynamics.
The underlying copyright in the creative work that exists off the blockchain regime and does not necessarily transfer to the purchaser whenever an NFT is acquired. When selling a physical copy of nearly any type of creative work, the creator or most recent copyright owner is responsible for transferring the underlying copyright. It remains to be seen what the medium term to long term impact NFTs will have on both national and international copyright laws.
NFT Technical properties vs outdated Copyright Laws
It is worth noting that unless explicitly stated and agreed to, the ownership of an NFT does not confer the owner the intellectual property of the underlying asset represented in the NFT, i.e. the holder of an NFT does not become the author and / or creator of the artwork. Except, as stated above, the transaction of an NFT involves transfer of the author’s copyright interests to the buyer of the NFT. In other cases the author’s right remains in the legal boundaries of the creator and as a result the copyright remains with the creator of the work of art, painting, music, etc.
Contractual arrangements and Due Diligence
For the time being, it appears that NFT copyright owners will encounter the very same challenges as before, albeit with some technological benefits due to the existence of NFT Marketplaces that collect royalties automatically after each transaction. The creators have become more aware of their copyright rights and how to protect and claim them via contractual arrangements,legal advice and proper due diligence processes related to each transaction.
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