Although the popularity of NFT collections recently skyrocketed, the answers to pressing questions surrounding intellectual property, copyright, and ownership enforcement issues only recently began to unfold.
An NFT is only the token in a blockchain corresponding to a specific image, not the actual image. Moreover, access to viewing NFTs on the various digital collectible marketplaces is public. Using tools like the DappRadar Portfolio Tracker, anyone can look inside the wallet of famous NFT collectors and influencers like Snoop Dogg, Beeple, or Paris Hilton.
Punks, the IP rights agreement for the CryptoPunks collection is now live. This moment is something the team at Lava Labs promised from day one, and it will be fascinating to see what the community builds using the terms as guidance.
At the same time, information on the Bored Ape Yacht Club (BAYC) NFT collection website says owners gain the “ownership and commercial usage rights given to the consumer over their NFT.” However, It’s hard to know precisely what they mean because the message confuses the NFT and the actual image. However, it is widely thought that BAYC holders have full rights over their NFTs and the image portrayed.
Sometimes, people simply right-click, save the NFT image, and use it themselves, which led to arguments and debate around ownership and copyright. Moreover, each collection appears to have slightly different rules and regulations; some collections give holders full copyright permissions, while others give limited rights.
In this article, we will dive into some of the most well-known NFT collections to decipher the current state of play regarding NFT copyright and owners’ rights. We will also look at the most recent projects and emerging collections that tap into those IP rights.
CryptoPunks
Yuga Labs, the creator of Bored Ape Yacht Club (BAYC), announced its acquisition of the Intellectual Property (IP) of the CryptoPunks and Meebits NFT collections from Larva Labs in March 2022. By adding these brands to their portfolio, Yuga Labs now owns the copyright in the art, along with 423 CryptoPunks and 1711 Meebits.
Punks, the IP rights agreement for the CryptoPunks collection is now live, and holders can read through them here. This moment is something the team at Lava Labs promised from day one, and the document outlines the opportunities available for CryptoPunk holders.
It means the community can tap into the punk, or punks they own, to create different kinds of content and derivatives, but it’s stipulated that punks can’t be used for unlawful purposes or hate speech.
It’s also important to note the fine print that Yuga Labs reserves the right to make changes. Moreover, this exists because CryptoPunks are breaking new ground and may need flexibility in the future to serve holders better.
The first creation arrived before the Punks document was released in the shape of a new collection of NFTs from Tiffany & Co called NFTiff, available exclusively to CryptoPunks holders. Holders also receive an additional NFT version of the pendant. While Yuga wasn’t directly involved in the collaboration between @dt_chain, @TiffanyAndCo, and @alexarnault, it’s a perfect example of the kinds of things CryptoPunks holders will be able to do with the IP licensing agreement.
CryptoPunks have significant historical meaning in the world of NFTs, crypto, and Web3 and are widely considered the most OG NFT collection on Ethereum, despite not being the first. Since acquiring the collection’s IP, Yuga’s primary focus has been to honor this OG status and give the community what they promised from day one.
CryptoPunks‘ terms and conditions, unlike BAYC, previously restricted the transfer of IP, copyright, or trademark to CryptoPunk owners. That‘s why Yuga Labs gave full commercial rights to NFT holders to enable developers and community creators to incorporate CryptoPunks and Meebits into Web3 projects.
Bored Ape Yacht Club
The BAYC collection is an edition of 10,000 bored-looking ape PFP avatar NFTs launched by Yuga Labs in April 2021 to a relatively lowkey reception, becoming one of the most revered collections of all time. In many ways, the collection is very similar to CryptoPunks, as the original creator makes a template and produces variations by mixing and matching traits.
Bored Ape Yacht Club took a unique approach to NFT rights from the outset, giving the purchaser of each Bored Ape NFT license to use the digital art in various capacities. Including developing and exploiting the properties commercially in line with the terms and conditions.
One of the first instances arrived in May 2022, as the Toho Club, which already issued NFTs in China, announced the purchase of BAYC #5513 for 139 ETH, or more than $265,000 at the time of sale, to create a new collection of Chinese centric NFTs.
The Bored Ape Toho Club (BATC) images are based on the bored ape’s style and drawings. However, elements more suited to the taste of Chinese people are incorporated into the design of BATC.
The collection consists of 9,999 BATC images randomly generated through programming a pool of 11 body parts and over 400 elements. In essence, the face of the original BAYC ape is used, and a body is added, unlike the original BAYC avatars. This makes each BATC a unique digital copyright product of the original Chinese version.
BATCs will be issued as copyrighted products, and buyers can modify their BATC or use it for physical production and commercial licensing. This is an essential step in the development of China’s NFT industry.
Moreover, dozens of celebrities and enterprises have announced their intention to buy BATC to access the commercial value of the new Chinese-centric collection. This comes as no surprise as eastern markets have always tended to borrow western ideas and reshape them for an eastern audience. Of course, the same is true the other way, and it’s not a one-way deal.
With celebrities in mind, another case appeared in 2022 that had the potential to set a precedent with stolen NFTs. On May 17, 2022, actor, producer, writer, and director Seth Green took to Twitter to announce that his NFTs, including a Bored Ape, two Mutant Apes, and a Doodle, had all been stolen. Further, he had been working on a TV show, “White Horse Tavern,” which intended to feature the stolen BAYC #8398.
In this case, several industry commentators saw the episode as nothing more than a PR stunt that would broadly shine a light on Seth Green’s new show and BAYC. Questions were also raised about why Seth Green kept such an essential NFT item in his hot wallet.
This scam occurred when Seth Green clicked on a link that led him to a malicious NFT minting website, and his digital assets were stolen. Then a collector named DarkWing84 purchased Green’s stolen NFT for 106 ETH, or around $200,000.
The actor threatened legal action against DarkWing84 but what convinced DarkWing84 to return the NFT to Seth Green is not apparent. The transaction history shows that the NFT was transferred and not sold back to Seth Green’s NFT wallet. We can assume a side deal was reached.
However, connecting the licensing rights to the NFT itself raises several questions about when an NFT is stolen, adding to the growing list of to-be-answered legal concerns around NFTs and other crypto assets. Furthermore, the different treatment of stolen and later purchased goods from state to state, just in the United States, will further complicate the issue, not to mention geographical borders.
What is most apparent is that legal teams and NFT creators have an interesting few years ahead, and more and more cases arise to help set precedents when such issues arise.
Another high-profile pair to have aped into BAYC are legendary hip hop and rap stars Eminem and Dr. Dre. They released a music video using animated versions of their respective BAYC avatars.
As his Twitter profile picture shows, Eminem is a Bored Ape NFT holder and purchased the avatar for 123.45 ETH, or around $452,000 at the time, at the end of last year. He also appears to have acquired 26 other NFTs under Shady Holdings. Snoop Dogg also invested around the same time, collaborating with MoonPay to purchase one BAYC, one Bored Ape Kennel Club companion, and two MAYCs.
Clone X – X Takashi Murakami
Clone X collaborates with design studio RTFKT and Japanese contemporary artist Takashi Murakami. The studio and Murakami worked together to create a line of Clones. Each is referred to as a Clone X, digital avatar NFTs bought and sold on Ethereum and released in late November 2021. Despite early Issues during the public sale, RTFKT paused the sale after about two hours and restarted it the next day, when it sold out in less than an hour.
To start with, the collection commanded a respectable floor price of around 4 ETH. However, this quickly rose to around 30 ETH within just a few months as the collection got more attention as parent company RTFKT studios were acquired by legendary sports brand Nike. Later, they dropped an augmented reality focussed hoody to bring real and metaverse worlds closer.
Aside from these reasons, Murakami is a well-known artist whose work often fetches high prices. For fans of Murakami and his art style, the Clone X collection is a way to own one of his digital artworks. Diversity is another part of why the Clone X collection was successful, as there are Clones available in various skin tones and races.
Furthermore, owning a Clone X is a way to enter the RTFKT ecosystem, focusing on metaverse products, such as digital wearables. Owners of Clone X NFTs can get unique benefits with RTFKT, including access to real-world events and early opportunities to buy NFTs from new collections.
There are two license types for the Clone X project. Clones without Murakami Drip traits are allowed to be commercialized by owners for up to $1,000,000. At the same time, Clones with Murakami Drip traits do not come with a commercial license. At writing, there are 2989 Clone X NFTs with the Murakami Drip trait, which leaves around 16,400 Clone X NFTs without that trait that owners can commercialize up to $1,000,000.
The approach from Clone X and RTFKT studios shows a more considered way to give holders ownership rights while protecting the original creator’s IP. Arguably, the holders of the rarer, more valuable Murakami Drip Clone X NFTs may feel that they are being unfairly restricted after scooping up a rarer NFT from the collection. There is also the case that Murakami himself asked for that clause to be added to protect his IP to some extent.
Using a $1 million hard stop on earnings from any ventures using the IP is also an interesting move that could potentially limit more industrious holders. However, despite this nuance, the overwhelming feeling from Clone X is that they want the community to work with the project and innovate.
NFT copyright in summary
As the world of NFTs and digital copyright continues to evolve in front of our eyes, it’s vital to stay on top of all the developments. Whether or not you plan to utilize NFTs in such ways, knowing the latest regulations and rules can help you navigate a complex landscape.
The cases listed above of holders leveraging NFTs for an additional commercial gain show in a clearer light the potential utility of NFTs such as CryptoPunks, Clone X, and BAYC. Which have accrued enormous clout and trading volume in a short time. Furthermore, it can help investors and collectors looking to leverage the IP of an NFT identify collections with the most favorable conditions.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.
