Recently, a large anonymous owner of CryptoPunks (known only by the name “punk4156”) made waves in the NFT world when a chunk of those Punks were put up for sale due to a dispute he/she had over Larva Labs’ handling of copyright issues.
As an attorney, this issue is exceedingly interesting to me because generally I get paid to protect intellectual property or enforce intellectual property rights. But in Web3, there is a large community of people who place value on intellectual property which is not protected, and therefore immune to censorship and third party governance.
As I read the public sentiment discussing the issue, I saw a lot of misconceptions and misunderstandings on the concept. Hopefully this articles provides some insight so people can make intelligent decisions when deciding to buy (or not buy) and “CC0” project.
I have covered some copyright basics in other articles, and covered the various fights specifically over the cryptopunks copyright a few times. The main takeaway, is that the creator of creative work (whether that be art, music, literature, etc.) generally owns the legal right to decide how that work can be used by others in the future. When a consumer buys the work, it comes with a baseline set of rights (which differ by country), and then the artist has the right to either expand or constrict those rights as that artist sees fit.
In NFTs, the assignment of rights generally is done one of three ways:
- The buyer does not get any intellectual property rights other than the general right to display which is the baseline assignment in the United States. An example of this is Stoner Cats. The buyer has no commercial rights to the intellectual property making up their particular NFT.
- The buyer is granted some limited commercial rights to their particular NFT, but the artist maintains co-rights to all the individual NFTs, and exclusive rights to the overarching intellectual property. An example of this is Cool Cats.
- The buyer is granted complete and sole commercial rights to their particular NFT, but the artist maintains exclusive commercial rights to the overarching intellectual property. An example of this is Bored Apes Yacht Club.
There are obviously many variations of these, and it can be done many different ways. For example, an artist can allow a buyer a certain threshold of commercial rights (up to $100,000 for example) where the buyer can make T-shirts or otherwise profit off the art up to a limited amount. The above three overarching buckets are just what are most commonly seen in the NFT space.
It is important to note that generally, violation of another person’s copyright is not a jailable offense. So long as the violation is not willful and does not meet certain commercial profit thresholds the chances of somebody going to jail over copyright infringement is slim-to-none. There is no need to worry that printing a personal copy of your NFT to hang on the wall or having it screen printed on a hoodie is going to land you in the clink.
It is also important to note the difference between placing something in the public domain (discussed below) and assigning complete rights to buyers. The assignment allows the owner to enforce (or choose not to enforce) those intellectual property rights against third parties who infringe on it. Alternatively, when somebody places art in the public domain, nobody can own or enforce the intellectual property that art represents.
Creative Commons and the Public Domain
There are also works which exist in the public domain. These are works which have no protectable intellectual property, and can be freely used by anybody. Work can be placed in the public domain by having its copyright expire, forfeiting those rights by failure to abide by copyright registration formalities (which rarely applies in modern US copyrights), having the artist expressly waive his/her rights, or because it is just not copyrightable material (examples of this include physics formulas and cooking recipes).
The problem with work which is in the public domain, is it is very hard to prove. Lots of art which people consider to be in the public domain is merely an artist failing to enforce their otherwise enforceable copyright. For example, if I take a picture and that picture becomes a meme, I technically am still the owner of that picture’s intellectual property, even if I never register it with the US copyright office or try to sue anybody for using it.
This creates an issue where some other unscrupulous individual(s) could claim they are in fact the creator(s), and apply for a copyright on that work. It would likely take court intervention to unwind that fraud, which is difficult to do without the involvement of the actual creator. Alternatively, I could see the success of the image a few months later and decide to copyright it myself. While I would largely be barred from seeking monetary relief for past infringements, I could sue for infringements which occur after the copyright is filed/issued.
This is a problem which Creative Commons seeks to solve. Creative Commons is a nonprofit organization that helps provide a solution for artists who wish to put their works into the public domain and remove the surrounding uncertainty which comes with that publication. Creative Commons offers all sorts of licenses for use by others, up to and including the “CC0” license, which is for when an artist wants to waive all interests in his/her work worldwide and as definitively and irrevocably as possible place that work in the public domain. A CC0 license does as much as possible to remove the uncertainty that comes with use of public domain materials.
A copy of the CC0 template license can be found here. It should be noted that intellectual property law differs from country to country, and while this template may be effective in some countries, artists should consult an attorney to confirm it complies with their local laws as well.
Pros and Cons of Public Domain Ownership
Something in the public domain can very much still have value. The Mona Lisa is in the public domain. Ownership of the original still has value despite the fact that any decent art student with a canvas and paint set could recreate it with little difficulty. A public domain work allows other artists to make derivatives, without fear of needing to make a fair-use case in the future. It also allows the work to be widely shared, which could create notoriety and increase the value thereof.
However, those derivatives would not be easily protectable themselves. Only the unique features would be protectable elements, meaning if you create a piece of art involving a CrypToadz in an airplane, the airplane would be the only protectable feature and you likely would not be able to prevent Wal-Mart from making the same thing in a slightly different airplane, or a helicopter, or on a bird, etc. and selling that image on t-shirts. This is different from the owner of a Bored Ape, who could protect the base Bored Ape along with any unique derivatives that owner decides to create or commission to be created.
There is also no need for a company to license the use of work in the public domain. While CAA is signing Bored Ape owners to representation deals, that would almost certainly never happen for any owner of work in the public domain because the work has no licensing value. Truly the only value from ownership comes from that actual ownership and any utility said ownership entitles you to.
The public domain and the CC0 seal (confirming a work is in the public domain) fits many Web3 narratives. It is the trump card to the “right-click-savers” because the value truly is decentralized and no part of it requires government intervention to enforce or protect. The only protection needed is a cold storage wallet or solid web security practices.
However, Web3 is also about directly supporting artists and creatives. Taking away an artist’s ability to protect his or her own intellectual property also could prevent that artist from maximizing the financial return he or she is entitled to for his or her contribution to the culture. Ultimately, the decision on how much intellectual property to license away is a decision which is left to the artist, to decide what is best for their particular project and the community they want to build with their art. For some, the answer will be CC0 or some other form of release into the public domain, and for others it will be traditional protections provided by copyright law.
If you have any questions, or would like me to cover anything in particular, reach out to me 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.