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NFT Boom Will Surely Lead to Questions Over Copyright, Control and Plagiarism

Guest Post | Oct 6, 2021

lush mountain road - NFT Boom Will Surely Lead to Questions Over Copyright, Control and PlagiarismCould NFTs be used to solve copyright issues one day? It seems in some cases that they have already provided solutions. Take the case of Cath Simard, a Canadian digital artist and photographer. Simard had grown tired of seeing one of her popular Instagram photos – a glorious snap of a road on the Hawaiian island of Oahu – show up around the internet without her consent.

Simard decided the best way to solve the problem would be to sell the photo as an NFT, which she duly did for $300,000 USD, and then release the photo for download free of any copyright. It seems that everyone is a winner in this scenario. Simard got paid, an NFT buyer got something they perceived as valuable, and people can use the photo (shown above) with a clear conscience.

But while the sale is an example of NFTs solving an issue of plagiarism and copyright, the boom in NFTs will surely lead to more questions in both those areas. In August, Fortune even went as far as claiming that copyright infringement could “crash the NFT party”. Of course, we are wading into a fairly complicated debate here, and one that has arrived so suddenly that the courts have not yet caught up with it.

NFTs do not create owners of IP

The first thing to say is that an NFT does not confer ownership of intellectual property. The person buying Cath Simard’s photo does not own it, nor do the people shelling out huge amounts for NBA Top Shot’s Digital Collectibles own those sporting moments. One of the best descriptions of NFTs and ownership came from Jonathan Bailey of PlagiarismToday, who said:

“In many ways, buying an NFT is far more akin to buying a limited-edition poster or an autographed copy of a book. It is special and (more) unique to you but doesn’t mean that the original work is now yours. It confers to you no rights that others have, you just have a slightly more unique connection to it.”

That description hits the nail on the head. And Bailey, a copyright lawyer, goes on to say that “owning an NFT, by itself, doesn’t grant on the right to print or distribute the work without the copyright holder’s permission”.

See:  Snoop Dogg Reveals He’s An NFT Whale

But the question of intellectual property will also get more complicated as the NFT net casts wider. We have already seen some controversy over the sale of popular moments on Twitch being sold as NFTs after a row broke out with streamers over who was getting paid for the sales. The site selling the NFLTs, MyClips.tv, was subsequently shut down.

Many stakeholders can be involved in an NFT

To show how complicated an issue of IP and copyright might be, we can look at a completely hypothetical scenario from a sector not yet touched by NFTs, online casino gaming:

If I wanted to create an NFT based on a clip of myself hitting a big win on a slot game, and subsequently sell it, would I be infringing on any copyright? If the platform were, say, Mr Green casino online, would that company have rights to some of that money? What about the developers of the game? What if the game was Jurassic Park by Microgaming, a branded slot based on the movie? Would the movie producers, even the actors whose images are used in the game, be due compensation?

While there is unlikely to be a rush in NFTs of winning hits on casino sites, the example shows how a small clip can be linked to a myriad of stakeholders. And while some readers might think there has been little controversy raised so far, it is worth stressing that it always takes the law time to catch up. As per Jonathan Bailey’s article, “this most recent boom is just weeks old and the courts have not even begun to address the issue this raises.”

Bailey’s point is that there will eventually be some sort of reckoning further down the line. As mentioned, NFTs do not confer ownership, but that does not mean that stakeholders will sit by idly watching others get rich of something where they have a claim of intellectual property.

Another point that Bailey makes well is that stakeholders were either happy with – or ignorant of – NFT sales when it was a niche activity among crypto enthusiasts. But now that it is a multi-billion-dollar industry, that will surely change.

Fair use policy is under scrutiny

Across the internet today, you can find arguments breaking out over intellectual property and NFT sales. For example, there is the case of PokerPaint, a company that specializes in expressionist-style images of poker players. PokerPaint got in on the NFT game and made a few sales, but the problem was that the images, although highly stylized and altered, were often based on original photos. The photographers, as you might imagine, demanded to be paid.

Obama HOPE Poster - NFT Boom Will Surely Lead to Questions Over Copyright, Control and Plagiarism

In the ‘real’ world, the above is a similar case to the iconic “Hope” poster featuring former US President Obama. The poster, which was created by Shephard Fairey, was based on a 2006 photo by AP freelance photographer Mannie Garcia. Fairey’s lawyers argued that the poster fell under fair use guidelines, but the AP was ultimately successful in court. Fairey, in fact, got into heaps of legal trouble, narrowly escaping jail, after later admitting to destroying evidence that the poster was based on Garcia’s photo.

The point of the Obama example is that there can often be a price to pay for using someone else’s intellectual property. NFT enthusiasts might claim that the sale is of the token and not the image (or tweet or video clip, etc.,) but there is always a legal argument to the contrary.

We will leave the last word to Jonathan Bailey, whose musings on NFTs and copyright inspired this article.

Bailey claims that “until there are checks in place to ensure that NFTs were created by the artist or rightsholder, it’s going to serve as much bigger piracy threat than opportunity.  Unfortunately,” he says, “the system just isn’t built for that and it’s unlikely that it will change anytime soon.”


NCFA Jan 2018 resize - NFT Boom Will Surely Lead to Questions Over Copyright, Control and Plagiarism The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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