The NFT industry is booming right now, and it seems like it will only keep on growing. If you haven’t bought one yet, you might be wondering why people buy NFTs in the first place.
Some people buy them to add them to their memorabilia collection, to sell them for a profit, or for the sentimental value of owning something special from their favorite artist or brand.
However, buying an NFT is for you only if the value you associate with the asset is more important than owning the actual asset itself. The reason being is that you don’t automatically receive rights when you purchase an NFT, unless it’s included in your agreement. Before purchasing an NFT, it’s important to understand what you’re getting.
What is an NFT?
NFTs, or non-fungible tokens, are digital assets based on blockchain. It’s the same technology behind Bitcoin and Ethereum crypto coins. Unlike cryptocurrencies, though, NFTs are not fungible, which means they can’t be traded with one another.
To put it another way, one Bitcoin is equal to one Bitcoin. They are fundamentally the same, while non-fungible tokens are entirely unique.
NFTs can represent different types of digital assets or digital collectibles such as music, media content, trading cards, art, and videos. Each NFT has its own set of rules associated with it, known as a smart contract. They’re also assigned an identification code that facilitates the transfer of their ownership and authenticity.
What You Own When You Own an NFT
Being that an NFT is a token that represents a unique asset, when you purchase one, you’re essentially paying for proof of that unique asset that you have bought. Basically, you’re buying a tiny digital record, similar to a certificate of authenticity, on the blockchain that proves your ownership and its authenticity. It’s impossible to duplicate NFT cryptocurrency, so its value lies in this rarity.
With this token, you can prove that the NFT belongs to you, keep others from altering it, and sell it when you are ready. For many people, that’s all they want. But, if, for example, you want to make merchandise with a design you bought, you’ll need to discuss and negotiate copyright with the seller or original creator.
NFTs and Copyright
Owning a copyright on something gives you a number of rights, such as making copies or modifications to the work. Not only that, but you also have the right to take legal action if someone violates your copyright.
Again, an NFT is not the actual asset you’ve bought. It’s more like a record of ownership stored on the blockchain with the actual file of the asset stored separately. No matter how much you’ve paid, you don’t automatically get legal ownership of its copyright.
The ownership of an NFT is different from the ownership of a project’s copyright or intellectual property. When you purchase an NFT, unless it’s included in the terms or written agreements, copyright ownership is not necessarily included. Typically, the original creator will keep those rights.
That means it’s possible for an owner of an NFT to innocently violate copyright thinking that they can use the asset however they want. NFTs come with guidelines that detail what you can and cannot do with them. For this reason, it’s vital that you understand the conditions of the ones you buy, as they are all different.
If You Need a Consulting Regarding NFT Copyright and Ownership, Sanchelima & Associates Can Help
Sanchelima & Associates, P.A. is one of the leading intellectual property law firms in South Florida. With over 40 years of experience, we have represented the IP interests of a wide array of businesses in the US and abroad, including Fortune 500 companies. Whether you need a consultation or prosecution of a patent, trademark, or copyright, we can protect your business’s interests.
Contact us to book your consultation!