A copyright is any original work of authorship which includes books, movies, and yes, that sweet avatar NFT you bought for .08ETH and immediately set as your social media profile picture. But not all NFTs give the copyright of the work to the purchaser.
Before we go more in-depth, one thing you need to understand is that virtually everything in the NFT world is governed by a contract, whether you knew that or not. On markets like NBA Topshot you are agreeing to their terms and services by participating in their marketplace. The people behind NBA Topshot, Dapper Labs, also published a template NFT License that creators can use to specifically designate what rights the owner of the NFT does (and does not) have. When you make a secondary purchase on Opensea you are purchasing all the accompanying rights the previous owner had. Whenever you purchase something governed by a contract, the terms of that contract are what dictate the agreement.
Generally, however, the contract to purchase of a work of art does not give the buyer that work’s underlying intellectual property rights. If you buy a painting, that purchase comes with an implied license to display that physical painting, show that physical painting, or even burn that physical painting (the controversial topic of burning NFT’s and their intellectual property consequences will be a topic for another blog) but that purchaser can’t scan the painting and sell posters or t-shirts with that image on them. The underlying rights to reproduce, make derivative works of, or distribute copies of a work remains with the author unless otherwise specified.
So what does that mean for you as an NFT collector? It means that, as a part of the Do Your Own Research (DOYR) process before buying an NFT, an important factor will be to determine exactly what intellectual property rights the artist is selling to the NFT buyers. In the enormously popular Board Apes Yacht Club, ownership of the NFT explicitly includes the underlying intellectual property for that particular NFT. With limited exceptions, virtually all intellectual property rights can be contracted around. For example, if the artist wants to allow the buyer to sell hats of the work but not shirts, that can be a part of the purchase agreement. The intellectual property you will be purchasing on drop day is a crucial piece of information for any serious investor.
While the NFT and crypto world largely view imitation as the sincerest form of flattery, with real money at stake people will start making real efforts to protect their valuable intellectual property. For example, just recently CryptoPhunks, a project which took the enormously valuable CryptoPunks and flipped them to the left, was removed from Opensea due to copyright violation complaints. While the Larva Labs founders may have been all about decentralized ownership and freedom from government regulation when they started, that was a few hundred million dollars in sales ago.
If you have any questions or would like me to write about anything else NFT and legally, let me know on either of my twitter pages! As always, I am an attorney, I am not your attorney. For legal advice, you should always consult (and pay for) an attorney.