NFTs in the light of the law
Legal definition of NFTs
An NFT is understood as a unique digital token, registered using blockchain technology, which serves as proof of ownership of a digital collectible. Its uniqueness stems from the ability to assign metadata to the token that irrefutably identifies a given digital asset.
An NFT can be thought of as a type of digital certificate of authenticity that provides proof of ownership of an original copy of a digital item. In legal terms, it may take the form of property law – a right that can be the subject of economic transactions. The legal aspects of NFTs, especially in the context of copyright, are being dynamically developed, which is due to the constant changes in blockchain technology and the specifics of digital objects.
- Legal status
The law provides that NFTs do not transfer full copyrights to a given digital work to the buyer. You gain the right to own a unique copy, but you do not automatically have the right to copy, distribute, or use it commercially. News portals often emphasize that the owner of the NFT should be aware of the restrictions that come from the scope of copyright law, and the contract of sale should clearly define the scope of the rights transferred.
- Regulations in Europe
In Europe, regulations on non-fungible tokens (NFTs) and digital art continue to evolve to meet technological challenges. Laws regarding NFTs, taking into account their uniqueness and relationship to copyright, are the subject of debate and interpretation.
Directives and regulations
The European Union is taking legislative action to regulate the NFT market, however, the specific nature of these assets requires frequent updates and adjustments to the regulations. EU directives provide a legal framework that must be implemented by the Member States, and regulations are directly applicable throughout the Union. At the moment, NFTs can be treated as both a form of digital art and a trademark, which requires the application of appropriate copyright and intellectual property protection laws.
Due to the cross-border nature of the NFT marketplace, the application of the law and legal protections may vary from jurisdiction to jurisdiction. Issues such as the content of license agreements, the scope of copyright transfers, and national protection are interpreted according to local legislation. Graphic portals, as places where NFTs are listed and sold, must comply with the legal regulations of the country in which they are registered, taking into account consumer protection and antitrust laws.
There are significant differences in NFT regulations around the world, reflecting the different approaches of individual jurisdictions. Currently, there is no unified international law that regulates non-fungible tokens (NFTs). Individual countries set their own laws, taking into account copyright and intellectual property issues.
The U.S. is taking a relatively liberal approach to NFTs, allowing them to be created and traded through copyright regulation. In the U.S., NFTs created and sold are considered proof of ownership of digital collectibles, however, they do not automatically transfer copyright to the digital work. For example, the news portal Art Lounge Plus may offer NFTs as a means of authenticity and exclusive rights to the work, but it does not transfer the full rights of the creator to the buyer. Feedback from Art Lounge Plus users is often about clarity of information about the scope of rights obtained when purchasing NFTs.
NFTs and copyright
NFTs, being a digital certificate of ownership, introduce new challenges for copyright law. Understanding the relationship between NFTs and intellectual property is crucial to properly protecting the rights of the creator and use of digital collectibles.
Intellectual Property and Licensing
When you acquire an NFT, you primarily acquire a token that is proof of ownership or authenticity of a digital collectible, but not necessarily the copyright to the work to which the token is associated. Copyright may be challenged if the creator of the work has not licensed its tokenization or if the license does not cover certain forms of exploitation.
- They allow you to use the work in accordance with certain conditions.
- They can be exclusive or non-exclusive.
The owner of the NFT should pay attention to the scope of the license received to avoid cases of copyright infringement.
Protecting Creator Rights
Creators must protect their creations in the context of NFTs, especially considering that these tokens can be copied or distributed without their knowledge or consent. To secure the creator's right to compensation for the use of the work, it is important to follow the rules of copyright law and apply agreements that provide an adequate level of protection.
Examples of protecting creator's rights:
- Registering your work as a trademark.
- Use of fair use license agreements.
Creators should take appropriate legal measures to control the distribution of their works and prevent their illegal use in NFTs.
The NFT industry is booming, and the law often lags behind technological innovation. In the case of NFTs, it is important to understand that although they are not considered a "thing" within the meaning of the Civil Code, it is possible to conclude a contract on terms similar to a sales contract. Copyright plays a significant role in the context of NFTs. Token owners should be aware that they are primarily acquiring proof of ownership of the underlying deed, not full intellectual property rights. This means that they have a limited scope of entitlement to a particular digital work.