NFTs and commercial rights to the underlying art
What commercial rights are extended to NFT holders?
I came across this thread on Twitter regarding the commercial rights of NFT holders:
I have been skeptical of NFTs in the past but this would make me reconsider my skepticism. If commercial rights were transferred to the NFT owner, that would make NFTs more of an investment rather than a way to support artists.
As a side note, claiming that you will be publicly shamed for using someone elses NFT made me chuckle. I thought the Bitcoin crowd were the overserious, self-important, dickish bunch in crypto space.
But how would commercial ownership even work? Is an NFT a legal document? Would a court recognize your ownership? Does Bored Apes remove your Ape from their commercial marketing material now that you own it?
After looking through the terms, I found that no, you do not own the commercial rights of your ape and Bored Apes will still use the likeness of your NFT in marketing material and wherever the hell they want.
But you do get a license to the commercial rights upon purchasing an NFT. From the terms (emphasis mine):
iii. Commercial Use. Subject to your continued compliance with these Terms, Yuga Labs LLC grants you an unlimited, worldwide license to use, copy, and display the purchased Art for the purpose of creating derivative works based upon the Art (“Commercial Use”). Examples of such Commercial Use would e.g. be the use of the Art to produce and sell merchandise products (T-Shirts etc.) displaying copies of the Art. For the sake of clarity, nothing in this Section will be deemed to restrict you from (i) owning or operating a marketplace that permits the use and sale of Bored Apes generally, provided that the marketplace cryptographically verifies eachBored Ape owner’s rights to display the Art for their Bored Ape to ensure that only the actual owner can display the Art; (ii) owning or operating a third party website or application that permits the inclusion, involvement, or participation of Bored Apes generally, provided that the third party website or application cryptographically verifies each Bored Ape owner’s rights to display the Art for theirBored Ape to ensure that only the actual owner can display the Art, and provided that the Art is no longer visible once the owner of the Purchased Bored Ape leaves the website/application; or (iii) earning revenue from any of the foregoing.
I had never heard about the commercial rights of NFTs discussed before but I guess it’s discussed enough among NFT enthusiasts that its being misinterpreted.
It’s also important to note that this isn’t binding. These are terms which are subject to change at any time.
It’s not enough to make me jump on board the NFT bandwaggon but its not nothing. I could imagine someone buying an NFT and using the art for a t-shirt or sticker they can sell. But I could also imagine someone doing that without buying the NFT. Let’s be honest, I don’t see Bored Apes going after fly-by-night independent Amazon retailers. There’s already Bored Ape t-shirts on Amazon and a dedicated site that don’t appear to be affiliated with the company or NFT holder.
The problem is that protecting commercial rights is expensive and difficult. Billion dollar organizations whose entire valuation is based on exclusivity can’t even prevent their image from being used illegally. And people certainly don’t get publicly shamed for using their likeness on social media. You think an organization that didn’t exist until a few months ago and with no public members will be able to protect their brand? Their entire organizational identity is the apes page, a corporate landing page, and a pending trademark filed one month ago. Who are these people?
Bored Apes don’t even stick out as particularly egregious. The art is pretty good. But come on.
I feel bad for people that invested in this stuff. Sure they’re often toxic but they’re the primary victims when and if this goes sideways. It’s one thing to support artists, but you don’t know who these artists are. This is some image that was created a few months ago that you like. There’s no known person behind it. You have no idea who or what you’re supporting and you certainly don’t own commercial rights to anything.
My guess is that in a year or two, there will be a lot of stories about how many of the successful NFTs were made and pumped by Russian bot farms. Phony non-binding bids gave off a sense liquidity and demand. And social media was used to pump the assets.
I go back to my original post on NFTs and ask, what do you really “own” when you own an NFT? And the answer is still a number on a blockchain that some newly created website says is tied to a jpeg. Plus the ability to legally sell merch of that image. But is that enough?
It's about derivative right and its commercial usage
https://www.universalmusic.com/1022pm-forms-kingship-the-first-ever-group-consisting-of-nft-characters-from-bored-ape-yacht-club/
https://www.forbes.com/sites/cathyhackl/2021/09/25/caa-signs-jenkins-the-valet-is-this-a-sign-that-hollywood-is-embracing-nfts/?sh=41a56f5b3b02