In our last blog, we outlined various rights used in connection with NFTs.
In terms of other rights, copyright is an IP right that protects the expression of ideas, but not the ideas themselves. This means that you will have copyright in a photo you take or a video you make.
This also enables you to license these rights to others, allowing them to copy your artistic work.
However, it is important to note that copyright does not really impact the sale of a physical item (e.g. a canvass painting). This point sometimes leads to confusion as to how copyright applies to the actual sale of artistic works apart from issues surrounding the further sale of copies of those works rendered in digital form.
In practical terms, the cryptocurrency and blockchain space allows you to create a unique, digital token that you cannot counterfeit. As the digital art cannot be counterfeited, it may generate a value proposition based on the idea of scarcity. However, the physical artwork or the digital artistic work each exist separately from the NFT, so the buyer is fundamentally getting the remaining token portion of the digital asset.
More to the point, NFTs don’t give you any rights over the digital art but it is just a unique digital connector “right” to the NFT which is tantamount to “bragging rights” that you “own” a cool digital piece (e.g. unique packaging of a sports video highlight) rather than the actual copyright. In fact, the copyright remains with the copyright holder who may control distributing the artistic work.
Looking ahead, it may be that NFTs are currently riding a perfect storm of the rise of cryptocurrency and digital transformation arising from the global pandemic; however, it is important to note that all artists, buyers and sellers should always keep in mind what NFTs actually mean in terms of ownership, and what they mean for copyright in Canada.
Should you require any assistance, please contact us to schedule an initial telephone call.