NFT Sales with Copyright Issues

A list of NFT sales where either the platform, buyer or seller failed to address copyright issues.
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Examples of  Copyright Issues Related to NFTs

There are an endless set of copyright issues related to NFTs.  Here are some resources:

  • HitPiece NFT platform accused it of selling music without copyright permission. In yet another example of copyright issues involving NFTs, HitPiece music licensing platform is accused of licensing musicians’ music without any copyright permission to do so.  There is a common misconception about NFTs and copyright.  Platforms don’t have any license agreements integrated into their smart contracts (yet).  Sellers fail to provide a license agreement with their NFT sale. Buyers by NFTs think they obtained more rights than were granted.
  • Cryptobros spent $3 million on Dune book, believing it gave them copyright.  Copyright law is in many ways the backbone of the NFT market, yet largely goes unaddressed by platforms like OpenSea, Rarible, and others.  While it is easy to blame the buyers for making rookie mistakes when they buy NFTs, the reality is that most people in the NFT market do not understand copyright well enough to know they are jumping off a legal cliff.


 

FREQUENTLY ASKED QUESTIONS ABOUT NFTs

What is a non-fungible token? contracts recorded on the etherium blockchain. Bored Ape’s are each unique (or a limited series of) non-fungible tokens. Non-fungible tokens are unique because they add unique contract terms linked to the token.

A fungible token is like a stock certificate. Fungible tokens are all the same. Bitcoin and Etherium are fungible tokens. Each token is identical.

Ethereum is decentralized open-source ledger software that securely executes and verifies application code, the smart contracts referenced above.

An initial coin offering (ICO) is an event where a company sells a new cryptocurrency to raise money. Investors receive cryptocurrency in exchange for their financial contributions.  The primary difference between ICOs and IPOs is that IPOs involve selling highly regulated securities overseen by the Securities and Exchange Commission (SEC).  There are significant disclosure requirements and investors must be qualified, typically having assets worth more than $1,000,000. ICO’s are currently not regulated by the SEC, although regulations are likely coming for coin offerings that are considered securities.  Many crypto companies identify their tokens as ‘utility’ tokens in order to avoid regulatory oversight.  Our attorneys expect a growing number of lawsuits and litigation around ICOs.

A token is an abbreviation for a ‘token contract’ and is the information recorded on the Ethereum blockchain. Smart contracts are applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. The blockchain runs on large numbers of decentralized computers and therefore never shuts down unexpectedly or becomes unavailable. The contracts recorded in the token cannot be changed, hacked, or manipulated.

The Attorneys at Traverse Legal have been globally recognized for their experience and results. We can provide legal expertise for variety of industries and practices areas such as blockchain, cryptocurrency, NFTs, and smart contracts.  Contact our team today!

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