During the last year, the world has experienced a boom in NFT art, and its enormous impact on young collectors is clear, according to reports and official data. Recently the Galaxy Report claimed that the vast majority of NFTs convey zero intellectual property ownership of their underlying content. 4ARTechnologies has the solution with NFT+, but let’s cover some basics first.
NFTs have IP protections
NFTs empower artists and creators to be able to sell their digital work by safeguarding both collector and creator. NFTs may be affected by IP protections, like copyright, design patent, and trademark rights. NFT collectors should pay attention to what IP rights are included with the NFT that they buy. Most NFTs only grant the buyer the license to use, copy, and display the NFT.
For example, in 4ART App an artist can sell an NFT+ to a collector. The owner of the NFT might not gain intellectual property rights over the work itself. This collector could not print the work on shirts and sell them without permission because the artist still owns the copyright. But this can also be different and all of it is fixed when the minting is done.
Most NFT creators restrict commercial use, but there are certain creators that give more rights to NFT owners. According to the Galaxy Report, members of the Bored Ape Yacht Club (BAYC) have commercial usage rights to their ‘apes,’ but the license has some contradictions:
“license agreements struggle with properly transferring IP to NFT holders. Yuga describes its license as unlimited, exclusive, worldwide, and royalty-free that allows for full commercial use. Under the ownership section of the BAYC license, Yuga Labs states that ‘when you purchase an NFT, you own the underlying Bored Ape, the Art, completely’.”
Copyright protection exists in several countries once the NFT is created. So if the NFT is sold, that does not mean the copyright ownership automatically transfers with the sale. Unless there is an assignment of copyright with the NFT, the copyright generally remains with the owner. Galaxy suggests that what happens with Yuga’s license is that it makes no assignment of intellectual property to holders of the NFT.
“Concretely, the copyright holder has the exclusive power to grant a license to use intellectual property they own. By clearly granting a license in their agreement, Yuga implicitly acknowledges that the NFT holder does not own the art”.
What happens with royalties?
Any royalties that may come from the work later will belong to the owner of the copyright for the underlying work, regardless of who owns the NFT of the original work. This is something that 4ART App users can also determine while minting. Royalty rates and the percentage are defined, so that every time the NFT+ changes hands, creators can receive compensation.
Royalty specifications are added automatically to the smart contract in 4ART App. Artists continue to monetize their work beyond the initial sale with intellectual property rights that are transparent from the beginning.
Can NFTs+ be forged?
While an NFT cannot be duplicated, someone could attempt minting new NFTs for copies of the original asset; this can lead to confusion and reduce profit for the original creator.
4ARTechnologies has also solved this problem with a forensic watermark which provides the same level of safety as our patented digital fingerprint for physical art. When you visit a compilation in the marketplace, each artwork contains the legally binding documents that state the enclosed rights and privileges as part of the NFT+ metadata.
NFTs are forever, however, standard digital artworks are in danger of being lost. With NFT+, the link to the artwork on the 4ART platform is part of the immutable metadata. NFT+ can currently be created on multiple blockchains like Ethereum, PALM, Tezos and BNB. Our customers can trust that any NFT+ or artwork which is minted or registered on the 4ART Platform is proven and authentic. We make sure that our customers do not fall foul of non-trusted sources.
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