NFT IP Rights and its Failed Promise

When I first encountered the AI Moonbirds collection and saw the AI version of my bird, I was left with many questions.

Didn’t I own the rights to this image?
How is someone else able to sell a derivative of my bird and earn royalties?

Since then, many Moonbird derivative collections hit the market. The original “IP” was leveraged for these derivative collections and the OG Moonbird NFT holders never saw a dime. In the wake of Moonbirds moving to CC0 there is a renewed discussion around the fundamental premise of NFTs and IP ownership.

Let me explain:

Since the Bored Apes launched early in 2021, IP ownership was paraded as one of the value propositions of NFT ownership. The saying goes, “If you own the Ape, you own the IP.” Many opted to leverage their expensive JPEGs for business endeavors. Some launched restaurants like the Bored and Hungry burger joint. Others like Seth Green had plans to use his Bored Ape in a future TV series.

Future NFT collections followed the Bored Ape model and extended IP ownership to the people who bought in. However, over the course of this year, we saw many collections begin to backtrack on the IP ownership claims and go the CC0 route with Moonbirds being the most notable collection to go in that direction.

CC0 enables creators and owners of copyright-protected content to waive those rights and thereby place the creations in the public domain. This would allow anyone to freely use the works for any purpose without restriction under copyright law.

While the move to CC0 is often framed as an altruistic move to better align with the decentralized ideals of Web 3, I suspect there is more at play here. I would argue that we may have all been sold on a false promise, to begin with. This was not malicious in nature, after all the notion that if you can own the IP rights to a verifiable digital asset seems like a rational deduction. However, enforcing said IP rights around NFT JPEGs is a different story entirely and potentially very difficult from a legal standpoint, especially on a global scale.

The story of the RR BAYC story is relevant here. Ryder Ripps launched an NFT collection of exact BAYC replicas as satire and a form of protest against the evidently racist Bored Ape collection. While Yuga Labs was able to take the collection down claiming copyright protection, there is an ongoing legal battle at play that has the potential to set precedent here.

What happens when NFTs are repurposed and reused?
Can NFTs be replicated for the purpose of satire and protest?
Does fair use apply here?

The reality is that derivative collections like AI and 3D Moonbirds were circulating well before the move to CC0. It is likely that organizations don’t want to deal with the headache of enforcing IP rights and putting these collections in the public domain is simply a more elegant solution.

Time will tell.

Thank you for reading.

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