Copyright & NFTs - How to avoid the worst pitfalls

Copyright is an important topic in all kinds of art, and NFT art is no exception. In this article, we cover some of the do’s and don’ts, so you can get a clearer picture of how to navigate copyright law.

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@enter.artPUBLISHED 12TH JANUARY 2022

NOTE: This article is for entertainment purposes only and is not to be considered legal advice. Please use your own judgement and avoid any area where you are unsure when minting.

Because they’re so new to the world of media, NFTs are still gaining their footing when it comes to legality and copyright law. It’s easy for people who are new to NFTs to get excited and mint new projects without considering potential consequences. However, copyright law still applies to NFTs, so if you want to be a creator, you need to know how to avoid legal troubles. Let’s explore some of the most common problems creators face and examine how to avoid them.

You need permission to use copyrighted work in your NFT

Let’s begin with the most basic warning. If you choose to use copyrighted work in your NFT, you probably need permission. It doesn’t matter if the NFT you’re creating is an original work and the only one of its kind on the blockchain. Think of it like a music producer wanting to craft a remix of or use a sample from an existing song. Yes, it is an original creation, but that won’t hold up in a court of law. A violation of exclusive rights is copyright infringement.

A potential exception exists in the concept of “fair use,” which has a long legal precedent. “Fair use” applies when a work is considered transformative, or is used for purposes like criticism, education, research, or reporting. In the case of NFTs, fair use is a legal grey area. It is still unclear whether putting something onto the blockchain is considered transformative, but we do not recommend it. When in doubt, refer to the content policy of the NFT marketplace you’re using. You might be totally fine, but any copyright owner is free to take legal action against what they view as infringement. Tread lightly and get permission when possible. It is much safer to use completely original work.

The other exception is for works that are in the public domain. The most common way works enter the public domain is through copyright expiration. In the USA and the European Union, copyright expires 70 years after an artist’s death. In Canada, it happens after 50 years. Some artists donate works to the public domain. Feel free to incorporate public domain works into your NFTs, but be careful to not use images of public domain pieces that others have taken. A photo of a public domain painting might be owned by the photographer, putting you at risk of copyright infringement.

Copyrighting your NFTs

If you’re creating totally original NFTs based on nobody else’s intellectual property, you still need to know how to protect yourself from copyright infringement by others. Though still in the early-stage grey area, it is highly unlikely that NFTs themselves have copyright protection. This may change, but don’t count on it. NFTs represent blockchain data, which doesn’t hold up as original authorship under intellectual property law. However, the artwork that you’re minting can be protected. To ensure your protection, you’ll need to “fix” your idea on a medium before minting it as an NFT. Always copyright your work before minting it to avoid intellectual property theft.

Make some considerations before minting

Sometimes the line between totally original art and someone else’s copyrighted intellectual property isn’t very clear. Before you copyright anything or hit the mint button, ask yourself if any of these situations might complicate the process:

  • Did you create this artwork by yourself, or was it collaborative? Make sure you get permission from anyone else involved.
  • Do you own the rights? Sometimes creators mint NFTs as commissions or on behalf of employers. Others have already licensed the work to others. Review any contracts related to the work.
  • Do you have plans to transfer the rights to anyone else? If so, this transfer requires a written, signed contract by both parties. Remember, selling an NFT does not mean you are transferring rights to the buyer because NFTs are not protected by copyright law. If you want to sell the copyright, that is an entirely different process.

When in doubt, be vague

In some cases, copyright status can be muddied. For example, fan art for existing intellectual property is a grey area. You can create the art yourself from scratch, but if it features copyrighted characters, you put yourself at risk. For best results, avoid using the names of characters, settings, or series being depicted.

Sports NFTs are also extremely popular, and similar rules apply. It’s generally best to avoid using the names of players, teams, jerseys, etc. For more information on our personal policies related to these issues, check out our content policies page.

Cautionary Tales

The legal shenanigans of NFTs may be brand new, but some creators have already gotten caught in controversial crossfires. Several of these cases demonstrate potential pitfalls for others.

In November 2021, film director Quentin Tarantino announced he would be auctioning off excerpts from his original screenplay for Pulp Fiction as NFTs. Miramax Films sued Tarantino, claiming that they as a company own the screenplay, not him as the writer. This highlights the importance of ensuring you personally own the rights to any intellectual property you mint as an NFT. Sometimes employers or clients own aspects of your creative vision, so always double check your contracts.

In July 2021, a young programmer posted a twitter thread in which he described how he launched an NFT project called Weird Whales. These computer-generated images of pixel whales sold out quickly. Later, buyers resold them for far more than they paid, making these images a hot new NFT commodity. One user, however, took the time to research these whales. They found out that all of the images were taken directly from another project. While it wasn’t immediately clear if a copyright was violated, many users quickly sold their NFTs at a loss. This acts as a cautionary tale for both creators and buyers. Always do your research on an image’s origins before buying, minting, or selling an NFT. Even those who sold at a profit are at risk of being sued.

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