A conversation about the NFT from Curry’s Avatar and its copyrights

A conversation about the NFT from Curry’s Avatar and its copyrights

Recently, a piece of news titled “Curry Paid $180,000 for a Profile Photo” spread like wildfire and quietly climbed into the top search. While some onlookers exclaimed that Curry is rich and willful, quite a few fans changed their profile photos to the same, saying that they have used the $180,000 profile picture without paying anything.

(According to the report on the block crypto website, Warriors’ star player Stephen Curry’s recent Twitter profile picture was replaced by an image of an ape. The avatar is a virtual asset purchased by Curry with 55 ether, worth $180,000. Image source: @ Sina Sports)

As an intellectual property practitioner, apart from being an onlooker, I paid more attention to the avatar that Curry purchased, which is an increasingly popular NFT. Here I’d like to take this opportunity to talk about NFT.

NFT stands for “Non-Fungible Token”, whose opposite concept is the fungible token, namely the Bitcoin that we are familiar with. Fungible tokens represented by Bitcoin are characterized by being interchangeable and splittable, while non-fungible tokens are just the opposite, being neither interchangeable nor splittable. Each NFT is unique in the blockchain.

At the same time, it is because of this attribute that the presence of NFTs has increased in multiple fields such as securing intellectual property rights, financial instruments, digital art, and collections. With the help of blockchain technology, every NFTized content has a unique identity and attribute, and can only be enjoyed by one collector. The ape image purchased by Curry comes from the famous Bored Ape Yacht Club in the NTF market, which has 10,000 global limited ape image NFTs. These apes are different in clothing, headwear, fur, facial expressions, etc., and each one is unique. The ape image purchased by Curry is expensive because of the rareness of its eyes and clothing. Therefore, in the eyes of the masses, Curry just bought a picture of an ordinary ape as his profile photo, but in fact, Curry bought a unique art collection. Even though the masses have duplicated tens of thousands of these ape images, the ape picture owned by Curry is the only “authentic” one.

So, when Curry purchased the ape image, did he also purchase the copyright of the image at the same time? Does it mean that Curry has obtained the copyright of the ape image so that he can exercise a copyright claim on it? The answer is negative.

Generally, NFT transactions do not involve copyright. Considering its nature being transactions of artworks and collections, NFT transactions are more similar to the traditional transactions of artworks and collections, the essence of which is the transfer of ownership rather than the transfer of copyright. In the traditional transactions of artworks and collections, the transfer of ownership is accompanied by the transfer of tangible carriers, while the transfer of ownership of NFT artworks is reflected in the transfer of virtual property attached to information data because NFT artworks exist in the blockchain and do not have tangible carriers.

In the field of traditional copyright research, copyright and property rights are separated from each other, and this is also applicable in the context of the Internet. Unless the copyright owner agrees otherwise, the transfer of the original or copy of the work is only the transfer of ownership and cannot be equated to the transfer of copyright. For example, the purchase of the book The Old Man and the Sea only represents the acquisition of the ownership of the book, but the copyright category covered by the content of the book still belongs to the author. The corresponding behaviors are still subject to the exclusive rights of the copyright owner, and the owner of the book cannot implement behaviors such as copying, disseminating information online, etc. The same goes for the ape image purchased by Curry. Curry only enjoys the ownership of the ape image, not the copyright of the ape image. Of course, as the owner of the “original” of the ape image, Curry still has the right to exhibit it.

Although NFT appears as a new concept, it does not deviate from the original legal framework and still, we can apply the original copyright law system. For example, when casting NFT on the blockchain, the originality requirements in the copyright law must still be met for it to be protected. Due to the network nature of NFT, it is also difficult to apply the “first sale doctrine” in copyright law in the process of NFT transactions.

It should be noted that the “first sale doctrine” serves as a supplement and interpretation of “distribution right” and “reproduction right”. In this way, instead of being used to interfere with the legitimate obtainer of the copy disposing of it based on “ownership” after it is put on the market with the permission of the copyright owner, “distribution right” is mainly used to prevent others from placing copies of works on the market without permission and ensure that the copyright owner can obtain the corresponding economic return from the publication and distribution of his work. [1]

However, in the web environment, since there are no fixed tangible carriers for the works, it is difficult to apply “distribution” to dispose of the “ownership” of the works carriers. However, it is interesting that although NFT is a product of the Internet, which does not have a tangible carrier, it has certain characteristics of a tangible carrier, like the concept of a specific object in the sense of civil law due to its uniqueness and indivisibility.

However, considering that it is difficult to apply the right of distribution in the context of the Internet, the author believes that it is still difficult to apply the “first sale doctrine” of the Copyright Law in NFT transactions.

Undoubtedly, for the Z generation who has grown up with the Internet, compared with traditional collections like antiques, stamps, etc., new trendy things such as NFT are more likely to be sought after. Burgeoning things will always bring a different landscape to the old world, and the NFT boom will also bring more legal challenges and collisions of thinking.

Reference: Wang Qian, On the “First Sale Principle” in the Network Environment, published in Journal of Law, Issue 2, 2006

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+ Translation by Olivia Ma