NFTs and Copyrighting Issues

With the emergence of blockchain technology as well as its capacity to store anything digitally, it is now more important than ever for those who have precious assets on file to ensure that they are not only secure but also easily accessible at all times. NFTs have been playing a significant part in this since 2014. These kinds of digital assets may be used for marketing campaigns, customer loyalty programs and item collection.

NFTs have acquired public attention at a rapid pace in the last year. Everyone is either purchasing, selling, or promoting a non-fungible token. This includes prominent Olympic athletes such as Usain Bolt, Hollywood stars such as Reese Witherspoon, as well as the world of K-Pop. BTS, the global music sensation, has announced a collaboration with Upbit, a cryptocurrency exchange, to introduce their own NFTs.

The fact that each token represents an item or an idea removes the need to worry about hackers. These assets can’t be modified once produced by the person with the vault’s secret key. But there is one thing that people should still be concerned about: copyright issues.

Let us go further into the subject to have a better understanding of the problems at hand.

NFT Basics

An NFT is just a cryptographic instrument located on a compatible blockchain. This blockchain, most often Ethereum, is able to develop a specific, non-fungible digital token that cannot be duplicated or resold. The blockchain maintains an immutable record of who owns what portion of the NFT. Each NFT that is minted, that is, generated, is driven by a smart contract, which is generally based on Ethereum’s ERC-721 standard to function properly. Each NFT is built of information that distinguishes it from the others and prevents it from being interchangeable.

Types of NFTs:

The top five categories of NFT in 2022 are:

  • NFT art
  • NFT memes
  • NFT fashion
  • NFT music
  • NFT games

Are Artworks and NFTs the Same Thing?

No, artworks (even digital art) are not NFTs. Non-fungible tokens (NFTs) are digital assets kept on the blockchain with a certificate of authenticity. Swapping is impossible with NFTs, therefore even if they have the same value, they cannot be swapped. In contrast, a fungible asset is an item or commodity whose elements are interchangeable and indistinguishable. Money is fungible because it may be exchanged for other assets. Overall, NFTs are ownership tokens, not fundamental artwork.

Ownership of the Asset/NFT:

An NFT may only be owned by one person at a time. Ownership is handled by the use of a unique ID and information that can’t be replicated by any other token. Non-fungible tokens are created by smart contracts that allocate ownership and govern the transferability of the NFTs in circulation. But ownership of an asset is completely different from copyright of an asset.

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Minting of NFTs and Copyright Issues:

The holder of a copyright has exclusive rights to use, reproduce, distribute, publicly display, and perform the creative asset. Producing and selling NFTs modeled on artwork to which you do not own the rights is almost clearly a form of intellectual property violation, particularly when you consider that auction sites who sell NFTs utilize the original artwork as part of their auction listings.

Most non-fungible tokens are metadata files encoded with a work that might or might not be protected by copyright (you could theoretically make an NFT of the trademark). Anything that could be digitized can be made into an NFT. The original effort is only required once to establish the tokenID and contract address. In theory, NFTs are unrelated to copyright (because the creator has just the legal right to the asset).

That’s why NFT auctions have scrambled to implement DMCA procedures for removing unlicensed NFTs off their platforms. However, it is questionable if this would be sufficient given the fact that many websites deliberately encourage individuals to tokenize information that they do not own. Other marketplaces only accept works that have been vetted, making them less concerning in this regard.

Moreover, NFTs allow producers to claim royalties on successive resales of their work, which is not common in conventional markets. Due to the unique nature of NFTs, artists can safeguard their collections against copycats via copyrights. However, the absence of legislative certainty for digital assets, particularly bitcoin, limits this protection.

Also, marginalized producers like meme-makers may profit from their popular memes using NFTs. NFTs have helped meme producers like Zoe Roth, noted for her ‘Disaster Girl’ meme. In May 2021, the NFT sold for $500,000. Meme NFTs do not restrict the meme’s usage or dissemination. Meme makers sell the ‘original meme’.

Some Recent Cases:

Recently under US copyright regulations, only the copyright holder may convert an original work into an NFT. Larva Labs’ CryptoPunk NFT project filed a copyright suit against Foundation, an NFT platform.

According to CryptoPunk, Foundation is showing off its collection of NFTs. Ryder Ripple, who claims to be their originator, submitted the NFTs to Foundation. Although the lawsuit is still pending, it highlights the absence of clear copyright standards in the NFT arena. The issue extends to reproductions and derivative works, greatly expanding the possibility for infringement.

The artist WeirdUndead claimed that someone had been minting their paintings and putting them onto OpenSea, while another artist named CorbinRainbolt complained that several of his dinosaur-themed works had been tokenized without his consent, both of which were confirmed.

Is it possible for an artist to transfer/sell their copyright to another person?

An artist can transfer or assign their copyright to another party. Transfers and assignments must be made in writing and signed by both parties involved in the transfer. It is important to note that you should get legal counsel before proceeding with the copyright transference/assignment. According to the above paragraph, when you sell an NFT, if you are not transferring or assigning any copyright to the buyer, they will not be legally entitled to make any modifications to the NFT after you have sold it. The possibility of doing so would exist, however, if it was specifically agreed upon by both sides into a written contract.


NFTs are forming a new market for artists and collectors to sell their “signature” digital goods in a way that makes unsigned versions of the materials accessible to the general public. The parties involved in the sale or acquisition of NFTs should make certain that they know the implications of transactions for copyright purposes. Unless the contract clearly states the contrary, a buyer who acquires an NFT does not get any rights to an original work from which the NFT was minted when the NFT was purchased.

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