NFTs and Copyright: Do You Own The Copy Right To Your NFT Artwork?

The rise of non-fungible tokens (NFTs) has opened up a new avenue for digital art and creative expression. NFTs are unique digital assets that use blockchain technology to prove who owns the art and that it is real. But the question of who owns the copyright in the world of NFTs is complicated and controversial.

However, no specific law mainly regulates the NFT market area, which has given rise to a great deal of uncertainty regarding the rights possessed by NFT owners and the degree to which they can exploit the NFT they purchase. Since NFTs only serve to represent specific works on blockchain technology, they are unlikely to be covered by copyright protection. Meaning the buyer will merely be purchasing a piece of code. However, there might be a solution to get around this.

In this article, we’ll look at the relationship between NFTs and copyright, and see how much control artists have over their creations after they’ve been turned into NFTs.

What Is An NFT?

A non-fungible token (NFT) is a distinctive digital identity stored in a blockchain and used to verify ownership and authenticity. It cannot be duplicated, replaced, or divided. An NFT’s request is documented in the blockchain and can only be transferred by the owner, enabling the sale and exchange of NFTs. 

Anyone can make NFTs and doesn’t necessarily need to know how to code. NFTs differ from cryptocurrencies because they are individually identifiable and non-fungible, while cryptocurrencies are fungible. and differ

NFTs and Copyright

NFT supporters claim that NFTs provide a public certificate of authenticity or proof of ownership. To own an NFT defined by the blockchain, one does not need to hold the copyright, intellectual property rights, or any other legal claim over associated digital content. Hence, it is not always obvious what legal rights an NFT transmits.

NFTs and copyright: Do You Own The Copyright?

An NFT serves as evidence of ownership of the blockchain record even if the owner of the digital asset it claims to represent does not hold intellectual property rights. The owner can sell an NFT representing their original work, but the buyer won’t always have the copyrights to it, and the seller might not be barred from making more NFTs of the same thing.

According to legal researcher Rebecca Tushnet, “In a sense, the purchaser gets whatever the artwork they believe they have bought. They do not in any manner possess the copyright to the underlying work unless it is properly transferred. “

This is because most NFT sales do not typically involve the transfer of copyrights. However, in some cases, the seller makes an offer to convert the token into a genuine transfer of copyright ownership of the original work, thereby transferring all copyright in the artistic work. In such a case, the terms and conditions or assignment/license agreement between the NFT vendor and buyer should specify the transfer of the right.

NFTs Transactions and Buyer’s Rights

NFTs are mostly sold when the owner thinks there is a great demand for the item and that purchasers will be ready to pay a premium price. These NFT transactions are usually done in the form of auctions. The seller will list the price for their NFT on the market list and then sell it to the highest bidder.

The value of an NFT is determined by the amount of work it represents. If the NFT belongs to a rare work, its value will rise, and the seller will be able to demand a more fantastic price. The value of the work an NFT represents is ultimately determined by market factors like demand and hype.

The sale of an NFT usually includes an intelligent contract, an agreement between the buyer and the seller encoded in code and kept on the blockchain. The NFTs are kept in a blockchain-based digital ledger, which also generates a digital signature and aids in tracing the ownership of the NFTs. The intelligent contract establishes the right of the NFTs and permits the sale of NFTs during a transaction. Since most NFTs are created on the Ethereum blockchain, sales and purchases of NFTs are often carried out through Ethereum. 

While smart contracts are crucial for determining who owns the NFT, they occasionally have a downside: they are challenging to alter or maintain. Since both parties cannot always encode the terms and conditions of the sale of the NFT to their liking, this might occasionally be harmful to them. 

But to avoid this problem, when selling NFTs, sellers usually give a set of terms and conditions that apply to all potential buyers. The marketplace where the NFTs are sold includes links to these terms and conditions. As a result, any buyer of the NFTs listed on that marketplace is subject to these terms and conditions.

Conclusion 

NFTs are digital identity tokens that can’t be changed. They are stored on a blockchain and used to prove ownership and validity. They cannot be replaced, divided, or replicated.

As previously stated, when purchasing an NFT, the buyer buys the metadata in the work rather than the underlying works connected with the NFT or the copyrights that go along with it. However, there are instances in which the vendor offers to transform the token into a genuine transfer of copyright ownership of the original work, thereby transferring all of the copyright in it to the buyer. In such a scenario, the terms and conditions or assignment/license agreement between the NFT buyer and seller should outline the transfer of copyrights.

This will avoid the risk of copyright infringement by ensuring that the buyer’s rights and the extent of his capacity to utilize the NFT he has purchased are explicitly outlined.