What’s Happening with IP Ownership in Web3?
Waves of litigations may impact NFT creators and communities in the next few years. There’s a lot going on with IP in Web3. Let’s explore.
It’s wild out there. If you’re confused about the state of Intellectual Property (IP) rights in Web3, you’re not alone. Frankly, it’s a mess. Everything from cyber criminality to corporate infringement claims has put the regulations (or lack thereof) of IP in question.
With the surge of popularity and intense growth of Web3, it’s easy to forget that things like non-fungible tokens (NFTs) only really gained popularity in 2021. It’s early days in a largely unknown economy. Like many concepts and inventions before, the functionalities and legalities around Web3 and the Metaverse are still mainly in their experimental phase.
Basically, we’re all still figuring it out. Great. Like Web3 couldn’t be any more complicated. So what does this all mean for IP in Web3? Here’s what we know so far.
NFTs and Intellectual property (IP)
Firstly, what’s Intellectual Property? How does it work? IP law is the protection of things people create or invent and includes patents, trademarks, and copyrights. These all form various functions under IP.
For example, patents provide rights to a specific invention. Trademarks are words, phrases, or logos associated with a product or service. And copyrights provide legal rights to tangible creative works like novels or songs.
Can these apply to NFTs? Yes. But that doesn’t mean they will. Here’s where things get interesting. Owning an NFT won’t necessarily give you ownership of its IP but it also possibly… could. You may gain some commercial rights… or not. It depends on the project.
IP in Web2
Brands in Web2 have been pretty strict with their IP. A good example of this in action includes the IP dispute between Wham-O — a toy company that’s manufactured frisbees since 1957 — and the 1982 animation “The Secret of NIMH”.
What happened?
The animation is based on the 1971 children’s book by Robert C. O’Brien called “Mrs. Frisby and the Rats of NIMH”. However, to avoid a lawsuit with the toy company over copyright and trademark issues, “Mrs. Frisby”, which is pronounced like the discs they make “frisbee”, was renamed “Mrs. Brisby” and the title for the film was changed to “The Secret of NIMH”.
Unlike this scenario and the way that IP has been typically applied across Web2, we’re seeing different ways of working with IP in Web3 with some creators sharing ownership with holders.
IP in Web3
Bored Ape Yacht Club (#BAYC) gives its NFT owners full commercial rights to their tokens. Snoop Dogg, for example, is set to launch a dessert restaurant based on a Bored Ape he owns called “Dr. Bombay’s Sweet Exploration”.
It’s worth noting that BAYC maintains copyright and trademark protections over its actual brand.
Other projects like Moonbirds have moved to a CC0 (Creative Commons — no rights reserved) license which ultimately makes their #NFTs public domain.
Controversially, holders originally had full commercial rights to their Moonbirds. The sudden changeover has raised important questions about the legalities and ethics of IP in Web3.
It’s also started a debate around CC0.
To CC0 or not to CC0?
We looked up some of the most common pros and cons of using CC0. Here they are.
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Pros
CC0 empowers the community to collectively develop the project’s IP by utilising #tokens in various ways like for film, music, or #branding — without needing to credit the original creator.
It also raises potential brand recognition around the original artwork or project itself through its many spinoffs.
A project successfully using the #CC0 license includes Noun via NounsDAO.
Cons
A project’s intended meaning could change. Without any IP regulations in place, people could build conflicting property or narratives than what the creators intended.
Something like this happened to comic artist Matt Furie whose meme #Pepe the Frog was unfortunately turned into a hate symbol used on a notorious neo-nazi website. Furie had to essentially use copyright claims to get it back.
We recently held a Spaces on IP in the #Metaverse which raised some interesting points on this,?give it a listen.
What can we learn from IP litigations and scams?
There’s a lot of ambiguity around IP right now in Web3. As a result of the blatant confusion, we’re seeing a stack of lawsuits popping up. And while scams in this space are sadly common, recent developments are emphasising the importance of defining clear use cases for #IP in this space.
One such incident includes the ongoing litigation between Quinton Tarantino and film studio Miramax who’s suing him for launching NFTs based on the 1994 film Pulp Fiction.
Another involves Seth Green, which raises important questions about theft and IP. Seth Green is an American actor who holds rights to a Bored Ape NFT he named “Fred Simian”.
Unfortunately, for a moment, his Bored Ape — who also happens to be a star character in a developing NFT show he was creating — was stolen and sold to another collector. This meant that he lost his IP rights to his NFT and therefore the lead character of his show.
Right now, there are a lot of questions on IP. It’s clear that it’s important. But we need to better understand and define the legalities around ownership in Web3 and how this is applied across NFT projects.
A project we think is getting it right
Huxley is a decade-in-the-making, graphic novel series created by Ben Mauro . His work spans leading games and films like Call of Duty and J.R.R. Tolkien’s The Hobbit. Plus concept designs for NASA.
Launching the project in #Web3 with NFTs autonomously, without going through any major studios, allowed Huxley’s creator to retain the IP he created.
At the same time, the project provides #PFP #NFT holders with ownership of certain elements of their characters like their armour for example.
Keen to know more? Listen to our?OMQ podcast episode?where we got to chat with Ben Mauro about Huxley. And check out the link in our?Linktree.