Hello, hello.
Hello, hi everyone. Welcome to the second live session of the NFTs and the Metaverse
course offered by the University of Nicosia in partnership with Punk 6529 and the OM.
I'm George Giaglis and before introducing our topic and our lecturers for today, I'd like
to take a couple of minutes to remind everyone of a few things related to the course logistics.
First of all, as you all know, we are building the OM's Metacampus, so we should soon be
able to migrate most of our future educational activities there. You should be able to see
the Metacampus building site on your right as you look at this screen, so hopefully that
direction. After we finish today's session, I encourage everyone to make the short journey
to the portal to the Metacampus and visit it. You will just be able to see our first construction
there, which is an open amphitheater, where we will probably be meeting for next week's
live session, but over the coming weeks we will be rolling out other places in the campus
as well. So that's number one. Number two, please remember that this is an on-chain course,
so we will be trying to touch upon centralized systems as little as possible. To this end,
most of the educational material for the course will be made accessible to you in the form
of NFTs. Those of you who had minted the course access token by last Friday should have already
received in your course wallet another NFT, this time an ERC 1155 token. Remember the
the discussion we had last week about standards. This token contains all the slides from last
week's presentation. You should be able to view this NFT on marketplaces like OpenSea
or LuxRare, although you may need to try different browsers and settings to get it to work properly
for you. For me, the best experience has been to view it in OpenSea using Firefox as a browser,
as Chrome seems to be blocking its content by default, at least on my Mac. We're working
to make future drops easier to interact with, so if you have any ideas or comments about
that, as always, please drop us a note on Discord or Twitter or in the chat here. Number
three, please note that all material regarding the course will be made available on our GitHub
account, including our live sessions. The live sessions will also be available on YouTube
for those of you that cannot make the live session. Always monitor our Twitter account,
this is the UNIC Metaverse account, for details on how to access this material on more
centralized, let's say, service providers. Number four, don't forget that you can use
the OM chat here to ask any questions you want to the lecturers that relate to today's session.
Starting today, we will also be taking questions from Twitter. Just make sure that you either use
the NFTQnA hashtag when posting your question and or mention the UNIC Metaverse account so
that we can pick the question and feed it to the lecturers. The final thing, please note that in order
to manage the load on OM, we are splitting the class into rooms. Each room will have a maximum
capacity of 500 people. So please note that if you leave and reenter the OM during the live
session, you might find yourself in a different room with different classmates, different chat
history, etc. There's nothing to do on your side. I'm just noting this so that you're not confused
if you find yourself in another classroom suddenly. Also, please note that if you remain inactive for a
period of time, your avatar doesn't move, you don't do anything in the chat or anything, OM will
automatically lock you out of multiplayer mode and you will find yourself alone in the Metaverse
world. So in that case, simply reload the page and re-enter in multiplayer to find your classmates
again. Okay, now on to today's lecture. Today's session is about a very important, I would dare
say fundamental aspect of NFTs and this is copyright, trademarks and licensing. Punk 6529
hinted at the importance of this last week, but today we're going to do a deep dive in the subject
and explore its different dimensions. As the topic is highly specialized, this week I'm going to be
taking a backstage role and I'm going to leave the floor to experts. So today's session will be a
presentation and a live discussion between 6529 and our first guest in this course. So it is a
pleasure and an honor to present to you Ms. Eliana Torres. Let me read this so that I don't make
any mistake. Eliana is an attorney in the intellectual property group at Nixon Peabody LLP,
where she's part of Nixon's blockchain Metaverse and IP teams. She focuses her practice on
technology transactions, copyrights and trademarks, but she's also an avid collector of NFTs,
where she has witnessed the many issues involving IP around them. Prior to joining Nixon,
Eliana practiced as a trademark attorney for the United States Patent and Trademark Office,
so I cannot think of a better person to discuss issues related to copyright in NFTs with 6529
than Eliana. Before giving the floor to her, I would like to give the floor very briefly to
6529 to introduce today's session and then I'm going to leave him and Eliana to drive the discussion.
So the floor is yours. Thank you George and thank you everyone and great to be back here. I just
wanted to note the following. I think copyright and trademark issues are among the most misunderstood
issues in NFTs, so I think this session is very important from a fundamental basis. I also think
it is important to understand that Eliana is a lawyer, but at the end of the session you will
not be a lawyer, so this one session will not substitute for many years of law school and
practicing as a lawyer, so if you are someone who is active in the space, perhaps as a creator or
a licensee or you're planning something significant to do with IP in the space, regardless of what
we cover today, you should hire a relevant lawyer with relevant expertise to help you with whatever
you're going to do. I am not a lawyer, I am a civilian on this topic. I think I know much more
than most civilians and yet if I had a complicated issue of this type, I would also hire a lawyer.
So what I hope we can accomplish today is Eliana will cover some of the basics in the first half
of the session, and then she and I will have a discussion on some of the more juicy spicy issues
that exist right now in NFTs, and then we'll do the normal Q&A at then, so with that I'll hand it
over to Eliana. First of all I want to say thank you for allowing me to be here to 6529 for George,
everyone else that has helped made this happen, it's a historical moment for all of us, and with that
said I think we could get started with our lecture for today, and I think it's important for us to
start with some basics, so if we could get our agenda for today on the next slide please? So this
is where we are, this is our session two, and we'll have an agenda in the next slide. So we'll go
over intellectual property, trademarks, copyrights, the transfer of copyrights, NFT licenses, and then
we'll have the Q&A and conclusions with some further reading and some assignments for you guys.
So starting with intellectual property, which is the next slide, well we already gave this
claimer, so let's make sure that we all remember that, and there we go. So intellectual property,
so I thought it would be useful for us to start with just the basics of what intellectual property
is, and what it encompasses, and the major areas of law that touches on NFTs. So if we have the
next slide we'll have a breakdown of the major, the trifecta of intellectual property laws and
intellectual property in the U.S., so we have the intellectual property definition, which is
basically you have creations of the mind, such as inventions, literary, artistic works, designs,
symbols, names, and images using commerce, and they break down into three major areas. Patent for
the most part is not going to be as relevant today, so I'll leave it aside for the moment, but
basically it's inventions, and you'll have an exclusive right granted for an invention once
you go to the U.S. Patent and Trademark Office, and you'll have to go through this artist's process
to actually get patent rights. At that point you'll be the inventor of that specific patent, but
you will have to go through that process in order for you to secure that right. That one won't be
as relevant today, so we'll focus mostly on copyright and trademarks. So copyrights protect
the original work, and it subsists, so it is basically curated for the time that you put that
in paper or in any kind of medium that is tangible, and you are the author who become the, basically
the owner of this copyright from that moment on. Trademark is an indicator of source, basically,
so you have words, phrases, symbols, signs, or a combination, and they basically distinguish the
source of goods or services, so basically like the Nike switch that you see, you associate that
with the source of being Nike for anything that has that specific symbol. So in the next slide,
we'll start with trademarks. I think the most contentious issues revolve around copyright,
so that trademarks, we could go briefly over what a trademark is and how to acquire this right,
and then we'll go into the more substantive issues of copyright. So starting with trademarks,
in the next slide, we have the definition of a trademark, so you have basically get an exclusive
right to use a mark in connection with some goods or services, and you get to protect that from
infringement on dilution, so from anyone using this mark in association with similar goods or
services. You basically have this right in perpetuity, so as long as you continue to renew it
and continue to use this right in commerce, so in whatever it is that you decide to use in association
with your goods or services, as long as you continue using that in commerce, and you continuously
renew it with the trademark office, if you do have a registration, then that continues to exist.
So basically, you have goods and services that you use, whatever it is you're using,
whether a symbol, marker, or a wording, or a combination in commerce, and that is associated
with specific classes that are considered basically just the categories in which you are using that
mark in association with. That's how the USPTO classifies them in NFTs, and we'll see this later,
the specific guidance as to where you should place these classes or how you should describe
these goods and services according to the USPTO, but I'll go into that in a little bit later. So
the next slide, please. So we have a lot of NFTs projects that have trademarked their names or
their brands or in association to anything that they've created. In 2021, actually, there were
about just a handful of trademarks, maybe 100 or so, and this year, there's been an influx of
trademarks just related to a metaverse NFTs. So we've seen a huge rise in trademark applications
that have been filed for specific classes related to NFTs. These classes, as I mentioned, categories
tend to be class 9 and 42 and some 35. So again, not to confuse you guys, these are just numbers
that kind of indicate some categories basically, and the majority of those are in class 9 because
they are considered by the USPTO as downloadable goods that are associated with an underlying
asset. So you still have to define what that asset is. So similarly, how we have what was
mentioned in the previous class, which you have the token and you purchase a token, not necessarily
one that you buy the token and the asset together, but the token relates or points or links back to
the underlying asset. Similarly, USPTO is using that same kind of definition to categorize this
trademark registrations. So most of them will be in class 9, all of them for the most part. If you
have a known downloadable asset or token that links back to something else, you further define
what that something else is basically, but it will remain in class 9 as a downloadable asset
basically. So Fedenza actually has a trademark for Fidenza. Then you have cryptopunks and a lot
of these are still in the stages of examination. So they'll go through a process of examination
before getting to the registration from right now. There's a backload since we have so many
trademarks for this specific classes of goods, and they are taking about 9 to 10 months to
examine this. So we'll see what happens with this trademark applications. There are not
registrations yet, some of them. Next slide please. So you actually don't need to register your
trademark, but it is highly encouraged. So what that means is once you start using something in
commerce, you basically have a trademark by Commonwealth. So you start using that in commerce,
whatever that is that you use, it is highly recommended for you to have a registration,
and you have to show that you're using that in commerce. And that is to show that consumers
are identifying your product or service with that specific trademark. So the reason why we
normally advise to have a registration is because you get the ability to enforce your trademark
rights, and it is highly advisable just because your rights are limited under common law if you
don't have that registration. And in order for you to bring that lawsuit, you have that registration
and it's kind of proof that you actually have been using that in commerce across the United
States. So having said that, there are some protections that the trademark does not extend to
basically, or they're commonly known as fair use, and they relate to two specific ones. So we have
classic and nominative fair use, and these are basically just acceptance. I don't want to call
it exceptions, but they just, trademark rights would not extend to this basically. So classic fair
use is when someone uses a trademark and is used to describe goods or services. So basically
you're not using it to indicate source for whatever you are selling, but you're only using that other
trademark, someone else's rights to describe your specific goods. So for example, you're using it to
describe a service. So you're using a trademark for, I don't know, Apple to describe that you offer
technical services. And you say, you know, we service computers from Apple to Samsung, you're
not using that to indicate the source of your services and being Apple and Samsung, you're
basically using that to reference to your own services. Similarly, we have nominative use,
and you are using it, there's been some case law around nominative use and how much of it you're
allowed to use someone else's mark in order to describe something else basically. And it could
be really complex, which is why I kind of just want to breeze over it. This is going to come up
mostly in some of the case law that we have right now, or not even precedent yet, but some of the
cases that have been brought in NFT related cases against some infringement that has gone
on in the space. So common situations where you would use how fair use will be news reporting,
commentary, product review, parity, and some comparative advertising. So when you are using
it basically to make fun of or not make fun of it, create some sort of common relief around a
specific issue and you use somebody else's trademark. That's basically what that would
entail, but there's some very specific guidelines as to how you go through the definition of fair
use and where that actually is fair use in relation to all these situations. And hopefully
as not too complex. But next slide, please. So again, this is why I wanted to kind of
leave the fair use arguments for this, and this is because we have some trademark infringement
cases right now. Most of them are surrounding the creation of NFTs that represents some physical
items. So like that's basically Hermes and Mason Rothschild. So in Metaberkin's case,
that we'll come to know. In that case, and I think the majority of us have heard of it,
there was an NFT that was created that resembled the Metaberkin's bags, which are
quite famous and very expensive. And this designation or this NFT basically was quote
unquote commentary on the use of specific, it was a political commentary according to the creator.
However, if he made a significant amount of money, so they had Hermes International soon,
this creator, and we are still waiting for a decision. The last thing we heard was that
an injunction was that a motion to dismiss actually was failed. So it was rejected. So
the loss is going to continue. And I think this case is going to be very important because it's
going to define whether you have, if you have a trademark for a specific good that is physical.
So like the Medaverkin's trade dress and the actual trademark of the Birkin's bags,
whether those are too, you can conflate those basically. So whether you could have an infringement
because someone else is creating that in a digital form in an NFT. So this is going to determine
the extent or the scope of the protection of the current registrations for existing brands.
And then we have the Nike StockX. And this is a little bit different in that,
and I find this one particularly interesting because Nike in StockX are, again,
StockX is a reseller of goods and they are using NFTs in association with the shoes that
they resell. So most of the arguments are kind of surrounding the argument or the analogy that
is a receipt. So you're basically authenticating actual goods that you can then later on redeem
as the shoe themselves or they're associated to the shoes. The shoes are Nike's shoes,
essentially, in StockX because they're reseller. So this one's particularly interesting because
it brings a lot of kind of doctrines that we have not determined whether they're applicable
to the NFT space, such as the first sale doctrine and this first sale doctrine basically,
and I don't want to go into a rabbit hole, but you basically have the ability to sell
something once you purchase it. So once I buy a painting, I have the right to sell that.
And that would be like basically what some of the arguments that they're making in this case,
but these are all trademark related cases that we have yet to resolve. So we'll have the next
slide before I go in the rabbit hole and know the descriptions of the cases. So now we enter
into copyright, and this is particularly applicable to the NFT space. We'll go into the next slide,
please. Copyright creation is basically once you put something in a tangible medium. So if I write
something in a piece of paper and that's already a tangible and there's enough originality,
that's enough for me to have a copyright. And that's differentiated from a copyright,
from a copyright registration. They're separate. So when I say copyright, it's just basically you
own that copyright, that creation that you made. If you go through a registration process, we'll
talk about that later, but it's separate. So you own your copyright, that does not mean you
have a copyright registration. So right now, the laws recently changed from the Copyright Act in
1976. And you have the life of the author plus 70 years is the extent of your copyright. That's
how long it will be protected for. And you get with a copyright, you get a bundle of sticks or a
bundle of rights that we commonly recognize as this six basic rights that you have the right to
reproduce, prepare derivative work, distribute, perform, display, transmit. So with a copyright,
you get the right to kind of control this, this the ability to any of those things and exclude
anyone from doing any of those things. Next slide, please. So now in the reason why I'm going so
fast is because we're going to enter into a really kind of interesting points about all of these
issues. One of the issues in copyright is the originality and the fixation. So these are requirements
for you to have a copyright. The originality is basically a minimum degree of creativity. And
that's argued in not to get very, I guess, into a new nuances of the entity space. But generative
works are arguably all of them have the end of creativity, but someone may argue they do not.
So then we go into the authorship, which is partly the same argument I just made earlier about the
minimum degree of creativity, because if you use an AI system, for example, AI like Dali or any AI
platform or coding or anything else that kind of creates the work for you, you still would need that
level of creativity. And it's a although it's a low standard, you still will be questioned by the
copyright office about how you use the system and whether that is enough to have a, I guess,
personhood or human creativity by the human. Because otherwise, you will not be entitled to
that registration. But the originality comes up often in the infringement cases and that
registration process. So those are the two times that you'll see this coming to question.
And then the last thing we need is the fixation. So you'll have the tangible medium of expression
and whether that's sufficient. And you just need the minimal degree of creativity. Again,
that's kind of reemphasized there. We'll go into the next slide, please. And this is where it gets
fun. You have the human authorship requirement and the definition of author is not in the copyright
act. But they have clearly distinguished and established that you need a human creation
component. And this was established mostly by Supreme Court in this case, where they determined
that human authorship was essential to copyright protection. And then it was reemphasized by the
copyright office in the compendium, where they mentioned that a work must be created by a human
being. And then it was reemphasized in this really fun case where a monkey basically grabbed
someone else's camera and took some selfies. And then the copyright office did not grant
the registration because they said the animal basically was not a human and could not get this
copyright registration. And that is the actual selfie of the monkey. Next one, please.
So by default, the creator owns the copyright at the moment of fixation. Again, this is different
from the registration. And the physical work is not the same thing as ownership in that copyright.
So if I buy a painting by Botero, this Colombian artist, I could get the physical copy, but that
does not mean that I could start then using that same painting to distribute in advertising
or putting in a movie or use it for other purposes that are commercial or even non-commercial. So
unless they're following the fair use. But you purchase this painting, you do not get the copyright
and we'll see how that's similar to NFT space coming up. We'll go into the next slide, please.
Again, this is a kind of expanded definition of the human authorship requirements. Recently,
the copyright board dealt with a case by Dr. Thaler, where he tried to copyright a painting
or a work of art rather, I'm sorry, and he was called the entrance to paradise. And this work of
art was created by a machine that he coded called creative machine. And the problem here was that
he named the author the creative machine. So the author was the AI system itself.
He didn't name himself as the author, he named himself as the owner. So the output of this machine
and the author was the creative machine. So that is when it became an issue for the copyright
office and they decided not to grant this registration. And this was later on appealed and
he still lost it against the board and then he filed lawsuits in DC. And we'll see how that
turns out. But I think for the last we have heard of this is that they're not going to grant
him this registration because you have to have the level of authorship that human being as a creator.
This is different and I want to emphasize this because I have seen this in the space lately
where we read from some articles that there was a copyright registration issued for a comic strip,
I think was a comic strip where the AI machine was used. And that was different because the
author was not named as the AI machine and they copyright office did question the level of
creativity or the level of work from the human. Yeah, you could go to the next one. I think I'm
taking a little long so we'll go really quick on that over the next slide. These are the not
protected things under copyright. Basically you have also fair use similar to to what we mentioned
for trademarks. And if you want to go to the next slide we'll go into this a little bit faster so
we can get to the fun stuff. Ideas, procedures, processes and systems. So basically anything
that's factual it would not be protected on the copyright just doesn't have enough level of creativity
for the most part that there will be one of the questions that you have when determining whether
that is fair use. And then both the main works so disclaiming any kind of works under CCO which
will also will co-relator are also not protected on the copyright once you kind of disclaim those
rights. So basically you give up or you waive all your rights to the creation that you made.
We could go on to the next slide so we'll move a little faster. Again this is a copyright
doctrine of fair use. And it's an affirmative defense and you have this four-part test that
I alluded to earlier. And these are four of the queries that the courts will look at when
determining whether a work was fair use and that should not be protected on the copyright,
therefore potentially no infringement. So they would use this and a case by case determination.
These are not exclusive to or not the spotters that you don't have to have. You could have a
little bit more on one of these factors than the others and the courts are kind of there's no
no bright area. There's no black and white. It's kind of a gray area where they lean on this
four-part test. And normally this is used as an affirmative defense and we could go on to the next
slide. So this part I and I included this slide because I think it's important for us in this
space to understand a little bit of what works for hire are in the copyright context because
a lot of the projects right now that I've seen they contract out the creation of the work. So
they'll have a third party create the art or the music or the video for the NFT projects. So these
are commonly known as works for hire and they come into specific situations. So one would be
as an employee. So you create this work of whatever it is that you created for your employer,
then essentially your employer is the owner and the creator legally the creator of the of the work
and you give up basically your rights to that owner to that employer. And then the second
situation in which this comes about will be in this nine categories and unwriting agreement. So
you have a work for hire agreement basically and you would basically give up their rights
to that creation to the person who hired you. And these are usually commission works. So
one of those works will have to fall into this nine categories. And then if none of these takes
place you would basically enter into an agreement with whoever hired you or whoever you hired and
you will have an assignment. And we'll have a little bit more expanded definitions of what an
assignment is in the next few slides. But for the most part they serve work for hire situations
and they're very two specific situations in which this comes about. We'll have the next slide please.
This is also important in the space because creators often do this the works or do the
creations as joint authors. So as a team and this is basically works that are prepared by
two or more people. So authors, but they have to have that intention that the contributions be
one. So merge into inseparable parts or independent parts. So by unitary whole and the act is very
specific about what a joint work is. They would both have an undivided interest in the entirety
of the copyright and they can exploit the work on a non-exclusive basis without the permission
of the other. So basically they could have that non-exclusive use as long as they take
account of the other person and they give them their fair share of profits if they are exploiting
that. And as long as they don't harm the actual work. This is also important for any creators out
there in the entity space that are creating works with more than one person making sure that you
guys have an agreement in place where this is kind of clear as to what you're allowed and not
allowed to do as a joint author and there's an understanding of what that means. We'll go to
the next slide please. So we'll go into the registration process which I mentioned earlier.
The registration does not affect the nature of your copyright but it does affect your ability
to enforce these rights. Your rights will be limited. You will not be able to bring the federal
court lawsuits unless you have this registration or a registration rejection. So there's also
this is not often mentioned but if you did not get a registration from the copyright office you
could still bring lawsuits and you have to argue that you should have gotten the registration so
as part of there will be part of your argument but for the most part and just to for simplicity
you do need a registration to bring a lawsuit in the federal court system and get to enforce your
rights and that's to stop someone from infringing on your copyright and this is also an example of
what the copyright registration would look like. Fidenza which I mentioned earlier has a trademark
registration but they also have a copyright registration which is really interesting to me.
They have copyright registration on individual fidenzas and I've looked at how many they have.
I don't remember the exact number but they this one's fidenza number 56 they actually number them
and they have individual they didn't copyright them as a collection of works but they copyright
each one of these individually which is very interesting. We'll go into the next slide.
So we'll get into it more of a guess debated discussion of what the transfers
in copyrights entail since they apply pretty heavily to the NFT space. We'll go into the next
slide please. So this is according to section one of the act it transfers an assignment mortgage
exclusive license or any other conveyance of a copyright or any exclusive rights comprised
in a copyright but not including non-exclusive license and I know it sounds like a mouthful
but just to make it into an analogy that's understandable is basically as if I sell you
my house if I sell you my house you have full rights and you have all the rights to that house
and that is different from me giving you a non-exclusive license which is the analogy is I
let you stay at my house and you could use my house for as long as I tell you that you could use
my house and you maybe I could tell you that you can only go in the kitchen or I could you
can only go in the room so I determine what kind of rights I give you with that not non-exclusivity
and by the non-exclusivity part I mean that I could also let my brother come into the house or
someone else come into the house so that's the difference between the full transfer so it does
an assignment and a non-exclusive license. The next slide please. This is more for visual I think
this is pretty kind of a simple way to kind of understand this transfers so you have the copyright
and you transfer all the rights so this is again kind of similar to selling the whole house so I
give you title to all and rights to the entire house I can't just come back to you later and say
you know give me back my house that's basically what this means I have to give you this right in
writing and I have to sign it um then you get all the same rights that you that I would get as if you
were the owner from conception and you then we go into the next one so that's the license and then
oh the previous one sorry yeah we'll go into the next bucket for a previous slide please yeah
so license then we have um the exclusive or the non-exclusive for the exclusive part
it's very similar to an assignment right except you also need it in writing you I will also have
to give these rights to you by signature and I have to sign them away to you and you only get this
rights uh it's an exclusive user so I can't give these rights to anyone else that is different from
a non-exclusive so you wouldn't be special in other words to get these rights to uh in the analogy
to borrow my house or to go into my house and this could be oral or implied also and we'll go into
the definitions of those uh in the next slide now the next slide please thank you um so there's a lot
of issues with the license in the entity space uh because I don't think we have a pretty clear
understanding of what the law is surrounding or surrounding these licenses so exclusive licenses
actually terminate at the earlier of one of those two years so 35 years from a date of publication
or 40 years from the time that you grant these rights um and the time of publication it again this
this may seem like uh it doesn't make it makes no sense but you could have a copyright registration
in unpublished works so um you may be able to have rights that you granted prior to publication
so that's how that would make sense so we also have the non-exclusive licenses so these are also
but you could have it in writing or verbally give these licenses for the most part they're
writing and they have a variety of termination procedures and that will be explained in the
actual licensing and license agreement that you grant and then you have an implied non-exclusive
license that could be terminable at will so whenever the person that granted them decides
and that is there's an exception to this and if you have an implied non-exclusive license
and this comes about in projects where there was no grant or so no mention of what kind of license
you got and you got an implied quote unquote license and um then it could be argued that
you paid consideration that was enough for the license to not be revocable otherwise it would
be revocable so like if you see the terms of use where it says you know this could be revoked
at any time basically that's what that means but for the implied one where there is no writing no
mention of what you actually received when it was just implied based on conduct or you using the
license and them allowing it if you had enough consideration the court will look at this consideration
as enough uh sort of like detrimental reliance so you relied on the what you've been using this
license for and then it becomes irrevocable, so there are some exceptions that I think will be
important to note and and I know it's just kind of a very dense area of law so and I'm probably going
really fast but just important to for us to note that there are exceptions to determination and those
are transfers by will so by uh testament one someone passes away by works for hire the works
made for hire because essentially your the creator is the the creator is not the owner anymore
but the employer or whoever hired at that point he has those right now and then the grants by
other federal laws so for example like you have at a batman that had that was granted a license
to someone else in that batman use so like the actual character also had some trademarks in it
so if there were trademarks embedded into the use of that copyright then you can't terminate
that because then you know what will happen to those trademarks that were also granted under
that specific license so that's when that really often happens and then also under foreign laws
which we will not go into but that's also another exception worth noting and then we'll go into
derivative works and you have the authority to continue using the whatever you created so it
basically works like a layer so anything that you prepare under the grant or so under whatever
license you receive before the termination you continue to utilize that so like the layer so
like once you have that whatever you built upon it you can continue to use after the termination
but it doesn't extend to any rights after the termination so you cannot continue to continue
to create more works based on the first layer that you initially received once it is terminated
we'll go into the next slide please then we get to the uh the fund part and this is the
NFT licenses and i think for this part point 65 tonight it's going to join me because i think
we'll get into more of the very uh dicey discussions in this area
so we could go into the next slide all right hello hello hello could you hear me
okay loud and clear well first of all thank you so much for that i know for everyone this was
probably a lot to absorb if this is not something that you've thought about in detail before in
fact even for me when i was looking at the materials and i think i know a decent amount
about this topic there were things i had to ask clarifying questions uh i had to read the slides
a few times the good thing is the slides are going to be available uh we will be available
in the chat we'll be available on Twitter and so we'll be able to follow up on these things
i would also say i think we're just going to have to run over of the one hour i mean i don't
think we'll be done in the next 15 minutes we're just getting to the juicy parts i hope all of
you can stay if you can't it's okay it'll be recorded you can watch the rest of it later
but i don't want to cut it short because i think we have a lot of fun things to discuss
let me put some things in my words from a more NFT perspective
and only if i get anything wrong you should interrupt me and then we'll see where the
really pressure points are i think this is a good slide here this slide 29 and on the slide
that we're on let's go back the base model when you buy an nft is exactly the same as if you buy
a traditional piece of art and i see this being an area of endless confusion particularly by
non-NFT people right like they say oh well what rights do you have or your rights are unclear
or here are all these like extremely nuanced topics about what rights you might have to the IP
but of course off-chain pre-NFTs your default expectation if you bought a painting if you
bought a book if you bought a cd if you bought a movie if you bought any piece of art or medium
the default expectation is that you get no rights whatsoever you have a right to personal use
the copyright stays with the owner so if you know i famously bought an Andy Warhol tomato soup can
does not mean i am now the copyright owner of Andy Warhol soup cans and i'm going to make
t-shirts and pillows and posters the Andy Warhol estate owns the copyrights there you know if
you bought a Harry Potter book it does not mean you now own the Harry Potter franchise right you
have a license you can read it yourself and most NFTs in the generative art world in the one of one
world are sold under this model right your default expectation is if you have not heard otherwise
if there's not been something communicated otherwise if there's not terms and conditions
otherwise what you should expect you have is the right to that particular instance for your personal
use but no the IP of the creator has not been transferred to you so your default is exactly
the same and all of the interesting topics all of the ones where i think people are confused and
we're leaving seeing some challenging legal issues as the law is not yet adapted to an on-chain world
is where nft creators have tried to give more rights right things that you wouldn't actually
typically see off-chain and let's take a look at some of those let's go to the next page
oh yeah i guess i should address this before we get to that you know i think related to this
and i've spent a lot of time with this oddly i've spent time on this topic even with people
who are crypto native and they say well i mean sure you have the token but the jpeg as we saw
last week might be on ipfs or our Arwave on a server and i can download it all by myself
and of course the correct answer this is so what you can download i can go download the google logo
all by myself i can right click save as the google logo and then the google logo is on my desktop
and that means quite literally absolutely nothing right it does not make me the owner of the google
logo it does not make me the owner of google uh Larry and Sergi are not trembling in their seats
that i've right click saved their logo it means absolutely nothing right and this is the correct
the actual practical correct analysis so i could say why does it doesn't mean anything i mean
strictly speaking if i started using the google logo i'm probably violating someone's copy right
so strictly speaking i might be breaking the law right but even that practically speaking it just
doesn't matter and in an on-chain world where you know this was very common last year people would
download punk 6529 and tweet at me and say i have punk 6529 now okay that's great i mean the tokens
in my wallet you have a jpeg um it's clear who owns punk 6529 and if there's any doubt about this
try and sell the jpeg right the market value for the right click saved as jpeg is zero so
i want to address and i'm guessing half the audience three quarters of the audience
has already passed us but we might have some new people in the audience new people to nfts
it's a common stumbling block to people new in the space but it truly genuinely in my opinion
and ellie if you have a different view we share it i just think it means literally absolutely
nothing it's a non-issue agreed yeah okay let me skip this because it's
actually fairly technical and we can come back and discuss this if we need to keep going
okay let me let's talk about the punks because i think this is super super interesting and
let's think about the two main frameworks that are might be different than the traditional
framework are where people are trying to grant commercial rights along with the token
or where people are saying we're putting the work in the public domain quote unquote cc0
we'll come to that in the next section let's talk about commercial rights because in some ways
this is the one that's most legally complicated you know the traditional model is not legally
complicated the public domain model is actually not legally complicated it's well understood
it's the licensing model that is legally complicated and the reason we have the
crypto punks license here is that over the commercial licensing licenses i think it's
the most well thought out it's the most complete uh you go clearly put a lot of work into it is
certainly much more thought out than the board apes license and the mutant apes license which
you know board apes license a couple paragraphs long and it's not totally clear what it's trying
to say whereas the crypto punks license is clear what it says is if you have a crypto punks token
you can commercially exploit your punk not of course anyone else's punk not any of the
underlying elements in your punk right my punk has a hoodie i can't take a punk-style hoodie
and exploit that individually i have to exploit punk 6529 specifically you can create derivative
works you can have sub licensees you can even apply for a trademark for your punk not of course
you can't use the general Yuga trademarks for crypto punks so it is as permissive as you can get
for the actual owner of the token let's say that's bucket one bucket two there's been some thought
into what happens if you sell the token further and what they say is if you've sub licensed
or you've made derivatives and then you sell the token to the next person everything that you have
done today holds but you can't do new things right so let's say i've made 10 000 little 6529 punks
and then i sell my punk to Ellie i can still like sell off my inventory of little 6529 punks but i
can't make a new derivative there's also some uh well let me stop there this is all this is to
me all of the good news right now there's a couple of bad news from the perspective of
you're fully crypto native you want to live on a blockchain right you know what's what's the bad
news well the bad news here and i understand why it's there is since it's a license since you have
an ongoing relationship with Yuga you see yuga like any kind of normal big American company
then puts things in there like but we can terminate the license or you're not allowed to do certain
things hate speech or trading with sanctioned entities or what have you say well why would you
want to do anyway noone's going to do that deliberately right and into some level i believe
it's Yuga covering their butts because you know they they don't want to indirectly be in business
with a sanctioned entity but it's also moving a variety of obligations on a token holder
but they don't have in if you own a bitcoin or an ether right it's not your bitcoin or ether can't
be taken away if you use bitcoin to engage in speech that is not permissible in your country
right but theoretically your license to your punk could be uh theoretically and it's different than
you know certain applications that use bitcoin or ether have been sanctioned like tornado cash
right but the protocol itself is not really sanctioned here if the protocol is the token it is
is through the license there is a counterparty risk a centralization risk right that's i would say
that's bucket one bucket two which i get i understand why it's there the license has a
general term there says it can be changed i know why it's there because it's a brand new space
and the laws might change and they might need to adapt the license to new laws so it's a sensible
and logical thing to do and i have every view that Yuga has good faith here and their general
model is to assign the commercial rights to the users but strictly speaking the license
doesn't can change to mark change and say something different than what it says there and then the
third thing that this was something i learned through the preparation of this of this session
and this i want to ask Ellie if i understood it right i might have gotten it wrong in which case
it'll be good to be corrected i had previously known to transferring a copyright
required a written agreement and there's a whole bunch of consternation of if a
you know on-chain transaction is a written agreement right of course as an intestine it's
probably not um but then what i saw is that an exclusive license also requires a written agreement
to be transferred and i think this license is primarily an exclusive license as it relates
to 6529 it's not no it's it's non-exclusive it it will be a non-exclusive license
why would that be so do you want to go back to the i think they do mention that at some point
in the terms that it's a non-exclusive worldwide license it's not exclusive um otherwise it would
literally say it this is an exclusive license so basically just one part you as a person would
get it and if i'm not mistaken i know we had one side where you had like the full terms
but it says it's a non-exclusive um license but that one yeah it would have to be in writing as well
and i guess going back to your point i this has not been tested in court yet but there are some
arguments that you can make that some licenses maybe when you guys intentionally say that you
know i give you all rights i give you a commercial rights but then it gives you all this other kind
of like as long as you buy to this and kind of alludes to a it is a license instead of just an
assignment on rights um and it hasn't been tested in court whether you just transferring the token
itself in connection to this license it's it's enough to have a cryptographic signature that
is in writing enough for you to have agreed upon this but again none of this has been tested in
this kind of it's it's a second issue that will deal with the subsequent buyer with that
even that license the initial license is even enforceable against the the next buyer the
so person a and person b so whether you could enforce that gets the person b but going back
to your point yeah i think that um it is a non-exclusive license and so i i pulled it up it's
actually very funny so they say it's exclusive and they also say this is the funny part is
universe wide i don't know how that jurisdiction works universe wide so it says yeah an exclusive
universe wide royalty free something some license of a license to reproduce a shipment
prepared derivative works publicly display publicly perform transmit and otherwise exploit
your cryptopunk art is that the most reason one the previous one may have uh i know that they have
for example like not you got that state non-exclusive in this one i don't know if you
i'll pull it up too i know we have the link there but if it's exclusive it has to be writing so um
that would imply that you had that this will be sufficient enough and normally you have like to
ascend something so like you have to click that you do agree to this right um that was sufficient
writing um but that would imply that during the minting process you would have had to agree
and then this goes back to many issues that have not been tested because this this was uh again this
was amended so we don't even know if this could be enforceable or there could be an argument that
it's not enforceable against it the people who bought in post amendments so this has not been
tested yet in court there's no precedent for this one yet right so and i think this goes to a very
interesting point like regardless of what it specifically says right and the Bored Apes
license for sure was trying to transfer the copy copyright right and here are things as far as i
can tell have not been tested or it's unclear. Number one) if you are a secondary buyer which could be on
a normal marketplace or an exchange or in some type of smart contract or even peer to peer
are you bound by the license and how right and you've never actually accepted that license
that's number one. Number two) if someone is trying to transfer copyright or an exclusive license
even if you have a terms and conditions at the bottom does this qualify as a written agreement
Number three) the marketplace terms the support i wanted to skip over before because i think it's very
complicated the marketplace terms tend to be generic right so most of the volume happens in
open sea right on open not for punks but for everything else open sea has fairly generic
terms it does not pass through the terms of every single collection and so to the degree you're
click accepting something an open sea you're accepting the generic open sea terms not the
collection specific terms and so arguably all of this stuff is open to interpretation challenge
or it applies in the first place right and i think some of the people who are negative on this are
like well it's it's bad but i'll give you my counter argument here and this is again i'd love
your view on this and one is a practical one one another one is a future one a practical one
let's say it doesn't apply right but Yuga intends genuinely i'm a hundred percent
certain of this it wants its community to do projects with their IP that's the whole point
of things right they're trying to get 10 000 people working to promote the collection as
opposed to just a centralized team so to the degree that the buyer more or less acts like its
applies and the seller or the issuer acts like it supplies doesn't matter i mean like if who's going to
who if generally your concern would be as a buyer of one of these things that the issuer
will enforce against you so i don't want you using your punk this way right i don't want you
making pillows pillowcases with your punk but yuga very clearly does want you to make pillowcases
with your punk or beer with your punk or coffee brands with your punk that's exactly what they
want you to do right and so since they want you to do it where would the practical risks come
that's that's question one and then question two is maybe what will happen is in time and
i don't think it's imminent but maybe in the next three to five years we will have legislation
to cover topics like this and the analogy that comes to mind for me is there used to be this
debate in the 90s about electronic transactions and how can electronic transactions ever be valid
because you have to sign with a pen and you can't sign with a pen on the internet right there's a
lot of things that used to say you have to sign with a pen and then i think it was in 1996 the
united states passed the e-signature act and the e-signature act in one stroke said well all those
electronic transactions are fine they count exactly as much as if they were signed with a pen
and this enabled a whole swath of e-commerce to come to life and you know this has been absolutely
fine that's why we have e-commerce today and then i so i wondered even if there are issues
now in this kind of teething period if eventually you know the legislation will change it was
interesting that copyright office decision on the ai art you could tell they were uncomfortable
with the decision they were making right they were just saying look we don't have the right
to assign copyright to an ai this is congress's job to fix right like if like if congress wants
to do this they should fix it and then we're happy to do it you could tell them they didn't feel
comfortable saying all this work's not copyrightable we have to follow the letter of the law and the
letter of the law says there needs to be human and if they want to cover you know human slash machine
partnerships they should change the law and so what are your views on this like what's the practical
risk today that even if this license is not a hundred percent correct enforceable etc what
practical risk might a punk holder a board abe holder have and you know can you imagine the
law changing in the future so i think that these are all unaddressed questions that i don't know
that i don't know anyone that have the answers to i think the most important thing to know is that
because this is so new I think that legally we need some changes but i also think
technologically we need some changes and i say that because if you were able to transfer the token
with a license that was available and that required someone to accept the license upon
each transfer and this was abided by all platforms we would solve a lot of issues with that because
then people would have the privity of contract with each one each transaction so i think that
is not just legal but also technologically we need to mature and as far as risk goes i i think
until we see some more kind of issues with this space we we don't know i would say this is a
litigious question as far as who would want to bring any sort of issues regarding this licenses
and their enforceability that would be the risk is is why would anyone want to contest this and
again i think most of the issues that i have in this space is not just legal questions
but that technological feature and then some of the misunderstandings as far as the amendment
goes so like what how do we know which license applies if this is amendable at any point so
like let's say that they're amended multiple times they say let's say Yuga lab decides to amend it
three four five times upon this and in the next five years so then at what point do we know which
license apply to whom and was there any privity of contract to say okay this license number three
apply to buyer five or buyer six or buyer six hundred um so yeah i would say um that technologically
we could fix this and then uh the law would definitely have to evolve with that technology
amazing i i guess well they'll have to update the license on-chain so then you can see
which license applies to which to which to which user right yeah i mean yeah and and i think that
technologically we could solve a lot of things and if we if we if only the platforms would kind of
like uh accept some of the smart contracts i know some some companies that are like trying to or
some platforms that are trying to kind of have this where like you upon each transfer you're
gonna have to click yes and be able to like read it so kind of like when we go on websites right now
and accept the terms of use um so each buyer will have an actual understanding what they're
purchasing and whether there's any encumbrances or liens or any sub-licensed um rights that have
been passed to a different person i think that technologically we could solve the legal
issues too. Oh I love what you were just describing i mean this would let me put it back in my
words that technologically we could bring the terms and conditions and the sub-licenses and
changes of these and things that were created under the sub-licenses and so on-chain and at
that point you can contract around the number one but it only gets me excited and you can
programmatically access them right and because right now i do feel this all the commercial
rights type projects do have a foot in both worlds right you have this global instant
digitally native permissionless token flying around everywhere and then for it to work this contract
that literally on the cryptopunks site is a pdf right and so you're saying maybe we can develop
better technology to bring the pdf side into the programmatic side i think so because right now we
have three three kind of different layers and it's kind of like a sandwich where like you have like
and it should not be it should not be for the legal perspective so like you're basically saying
i sell you this house but someone else is hosting whatever rights i have and and that that's some
that's somewhere else is normally like an aws or at the best an ipfs that holds those rights
which is the terms of use that i'm mentioning so that should not live separate from the token
and and if those were hand in hand together just like even we had just two layers where like the
token itself has the rights but also the metadata was i think again i think the technology is to
mature so that people could really readily like read that and be able to understand it because
right now who's going to go into the ether scan and go through the metadata and and click on links
or be able to know where to go in the metadata to click on the link that kind of takes you to the
to the terms of use like it's a lot of steps that i don't think people are going to if a judge saw it
they may see you know there was no actual understanding or knowledge or a sense um through
the terms of use because nobody's going to go through this metadata process
that makes perfect sense okay let's go to cc0 and public domain let's skip forward a few slides
and go to the next slide actually okay my sense of where we have ended up today in
so-called cc0 so creative commons zero which is a form of license that tries as much as possible
to put the copyrights in the public domain and the reason i say as much as possible in some
countries there are certain rights that you cannot put in the public domain if you want to but
for an american person i think you can generally you can put all your rights in the public domain
i believe it's an alternative way to solve some of the issues we just spoke about i think that's
how people are thinking of them let me give you my sense so because i've spoken to a lot of the
folks who have done this right and their assessment of the solution is not, okay we have to agree on
a standardized format for legal contracts in terms and conditions and we'll bring them on
chains to coordinate all the exchanges and do all these things their view is all different they say
okay well that sounds like an awful lot of work let's take a completely different approach first
of all let's take the approach that encourages maximum virality right the attention drives
everything online and if it is the case that having 10 000 people working on your further
developing your ip is better than having the 10 people in your marketing team working on your ip
well it's even better to let the 2.3 billion people online further develop your ip and your ip
will become more famous and important to get more attention if anyone can work on it so
that's one theory i think the second theory is even if someone let's say you 6529 have the
rights to punk 6529 and let's say you had a kind of strict view of how only you wanted to
to develop it and if someone else started doing things with your punk you should chase them around
and legally i think part of saying like look this is chasing people around legally online
in 99.999 of cases it's not worth the effort anyway right like i mean it's people copy things all the
time online and mostly you don't bother chasing them around and say like look it's it's effectively
it might be legally enforceable but it might be practically not hugely enforceable so i
don't want to have to even think about that let's say point number two point number three of
this this was x copies point that any version of trying to do it through a licensing agreement
is going to lead to centralization there is always going to be a counterparty the counterparty is
always going to want things like oh i need the right to change this agreement for logical reasons
the laws might change and they might be required to change the agreement but nonetheless it's never
the content the art is never really free because there's always a counterparty and a counterparty
that in some ways has more power than you do right like that they can change the contract you can't
right and so and then the biggest all these issues on is it enforceable is it not enforceable is it
written transfer did it happen through an exchange did not happen through an exchange was it on mint
which version applies take all away right you don't have to think about it's a huge simplification
you don't have to worry about them at all right there's who can i own some public domain pfp some
mfers for example and i don't have to think about these issues at all because it's clear who can
use that art anyone right absolutely anyone the product of user i can also use it but so can anyone
else so it simplifies and then i think what underlies all this all of this is the idea
that i'm stealing now from punk 4156 and i think in a few days we'll have him on here on the
course and so we'll really dig into this then he said something a long time ago that i found very
interesting was the right mental model here is provenance not copyright and how i understood it
is the following pre nfts let's say you had a really nice image and then it starts getting
copied which happens all the time right you see an example here with cats some art happens all the
time someone posts a beautiful photo on Instagram and then like 5 000 people copyright they posted
themselves they don't attribute it and now you don't know which one's the original because
everyone's supposed to get everywhere this doesn't really apply in NFTs right like the
provenance of who actually minted it who owns it who the artist said owns it what who the artist
recognizes as the owner it's super clear it's the person with the token to the degree that there's
a person with a token then everyone else that's running around with the art is in a way some
form of right click saving us right now or to think of it a more positive light is driving value back
to the token holder right they're creating attention but they're still only one original yes
they can use it but there's only one original now here we're in completely simultaneously
completely untested waters and extremely tested waters why do i say extremely tested waters
the vast you open an art history book the vast majority of art in an art history book anything
before 1924 is that the right state is in the public domain so it's not like this is something
brand new to the world you know any Van Gogh is in the public domain right uh books from the 18th
century in the public domain all these things are in the public domain right Romeo and Juliet are in
the public domain right they've been in the public domain for a long time now and so what an artist
or creator is doing is accelerating that process and we're not going to wait until my death plus
x years we're going to put in the public domain now this is what i'm going to respect as the
originals and then the global culture can remix this uh together and so it strikes me and i'm going to
ask a narrow question that will go to the economic question from a legal perspective this one seems
straightforward right like there's not a ton of outstanding issues if let's say i'm an American
i create a piece of art i put it in the public domain are there any ambiguities can we just go
ahead and treat it as such i wouldn't say there's ambiguities i would just say there's lack of
control for the creators so like let's say that um there's you have that cco like copyright uh or
lack of copyright rather image and then someone starts using it with the regulatory political
campaigns then there will be no control over you kind of having any say to prevent any of those
associations from happening um that will be the only kind of negative that i would say um but i do
i do understand the moombas kind of uh did this and i think that they have other issues other than
they just issuing this i think they should have done this for the beginning without the intent
but um i think the that would be um it's easier to manage you they wouldn't have to kind of legally
enforce any rights uh for on behalf of any holders either so financially and legally it would make
sense for them to do that but they only again they only get negative to it is the lack of control
or associations that you may not want with your art so that would be the negative thing i would say
about that sure right but legally it's clear right it might operationally have the outside
it's clear all right let's let's see the next few slides
yeah so this is this is where i think we are today in pfp projects my sense is in pfp projects
the whole quote unquote game now is being played between commercial licenses and cco licenses
is releasing a pfp project today and saying you just have a personal use license only
is probably now market uncompetitive right and for pfp projects which are different than
art oriented NFTs i think what we'll play out here and i don't know the answer to this right
and we're going to just have to wait and see which of the following two factors is going to
end up being more powerful the case for commercial licenses is if i know i have the exclusive license
for that board eight that's one of my Bored Apes i might be willing to invest in it because i know
i can monetize it if i invest it and if i knew that even if i invested it you could just take it
and use it yourself they may be less willing to invest it right that's the case for commercial
rights the again the economic human behavior case let's say and on the public domain side the flip
side will be like well sure that everything you said is true but in practice most people won't
manage to do very much with these things themselves and when you enable the whole world
to help you you'll actually get further i another way of saying it is
is i think the public domain folks will say yes you'll get a smaller percentage of a much bigger
pie right the value that's going to somehow accrue to you the token holder in sort of ambiguous
ways today right it's not totally clear that like let's say you le take my cryptotodes and make a
super successful clothing line with it you don't owe me anything right you could make lots of money
with it and i'll be like oh yes but i'm gaining influence and attention on the original but
i mean it's unclear if that actually ever converts back to money to me that's the question but
conceptually i think it's this they're saying the pie is going to be bigger
your take rate of the pie is going to be smaller but somehow it's going to be more
than on the other one that most people on most days are not actually going to
successfully manage to monetize a PFPs anyway so my sense it's an economic sense not a legal sense
is this is where we are in PFPs and now a collection comes out you can't do anything
you have to wait for the centralized company to do all the work of promoting it driving
attention etc i think is going to be uncompetitive for a new pfp collection now if marvel comes and
sells you PFPs right and spider-man and four and what have you that might be different right because
those are while established brands are ready but for a new brand that needs to be established my
guess is is when we're in the latter two categories now any thoughts there are we on yeah can i add
something yeah just I see one of the issues that i would see in that in that model is that
let's say you have something on the public domain like uh you know i don't know maybe a member and
someone else starts using it who's not the token holder and then they end up making it into a really
large brand to a point that it becomes a using in commerce that could be trademarked and then they
later on trademark that specific Moonbird as their trademark and then you still have that token so
like and again this is on the waters but wouldn't what would be your opinion as to someone else kind
of monetizing that potentially for in perpetuity until they choose not to and there's really no
what will be the value for the holder at that point if any at all when someone else is kind
of claiming cop trademark not copyright but trademark rights or that Moonbird that was initially
in this in the public domain that that would be a concern of mine but what would you do in that
case now i think that's a very interesting topic i think these topics you know you've seen this with
some open source projects where the project itself is released under an MIT license or something
but the trademark is still centrally held right where and there's some type of process for
applying to use the trademark i think is a complicated one and it's a very good point
i don't think there's a straightforward answer. yeah those are one of the issues i see. yeah
all right let's see two more examples and i think then we can go to questions and i'm seeing a ton
of questions coming through the chat we need to give people a chance to get their questions answered
so in the one of one world this photo here from Gatsomart was i think the most seminal part of
thinking about cc0 in the one of one world it's a great story she was an established
photographer pre-nfts and this was one of her most famous images and it was constantly stolen
right she'd see it on travel blogs and Instagram accounts and people used them on their advertisements
never credited her never paid her and this is nothing new than fts right in the off-chain world
and then she said well let me take a different approach and said well i'm going to auction it
off and i think she had a reserve price of a hundred or something and as soon as it's bought
it's going to convert to a public domain license now not strictly speaking of cc0 in her case
she kept some provisions on hate speech i think and acceptable use in her license but effectively
a public domain license and G-money was a big collector bought it and this was a very um interesting
event because i suspect she monetized this piece more without underneath and her whole prior off-chain
history of that piece and now it is of course continued to be used by many other people and
but now she feels okay about it because she might not and i think she money feels okay about it
because it becomes a very it's become a very well-known piece of photography because a lot of
people now make derivatives of it and it was interesting because somehow and i'm not saying
this applies to most people in most photography right doesn't mean that if you put your image in
the public domain you're going to get a hundred each that supply and demand doesn't work that way
but if you're a famous photographer and have a famous image it didn't work out this way and i
thought this was a very interesting and creative approach indifferent than the type of dynamics
that exist in pfps right nothing about this was G-money paid a hundred each because he wants to
make t-shirts with this picture he wants this picture from an art perspective in the same way
that he would buy any other one of one piece but believes that the whole overall system around
this photograph is going to drive attention over time and therefore value so i thought this was
very interesting a semi-controversial last fall 2021 and i think now it's been established
that like you know some photographers release some pieces of the public domain and i'm not saying
it's right or wrong it's just a tool right most release them not under a cc0 license and that's
fine but i think it is a tool that artists have that they can think about and use creatively right
and not just in a PFP context and let's see one more slide on this which is x copy. The x copy is
very interesting because he is not just a leading crypto artist he's on most metrics among the very
very top right and when he started and how many pieces of work he's made and what the prices of
his art he's on a quantitative basis at the very very top i think he's amazing but that's just a
personal view i say quantitative he's at the very very top and he has a large collection of work
and then one day the summer he put all of it in the public domain and what's very interesting and
this has to do with how crypto native he is and therefore also how crypto native his collectors
are nobody complained and it's very interesting because this is different than the moon bird's
discussion right moon bird said i'm going to give you commercial rights and then change
which they're mine and said i actually want to put in the public domain and some people got
annoyed but i understand that right because if you bought it because i want to have commercial
rights and now i don't have commercial rights with x copy you never had any rights right you had a
purse it was just normal art so you just had a personal license to use it you know i own summer
dot jpeg but i couldn't do anything with summer dot jpeg i just could look at it really nice to
look at and then the rights were still an x copy and he said okay well i don't want to hold them
anymore i'm going to give them to the world at large interestingly i think the vast majority
of his collectors you're just positive not a negative right now i see derivatives of summer
dot jpeg everywhere and i think it's great and i appreciate the point that you say well what
if people use it i mean what people say online is well what if Nazis' start using your art right
like it's very common thing and i appreciate that in the fullness of time this will happen to some
person and some collector and some artist but on the whole the kind of my first reaction to it you
know most of human art histories in the public domain and nazis aren't going around using like
Renoir's and Van Gogh's and Jane Austen i mean i don't think of nazis as being that art oriented
to be totally honest they seem to be more busy doing more obnoxious things than like making
derivatives of important art right so it's an issue but historically when we have data on what
happens when art is in the public domain and how many times it's used for evil and you know generally
the answer is it's not right it has not typically happened with historical art and so i thought these
were interesting in that it's a very different discussion than the pfp licensing discussion
where the PFP license of discussion is realistically mostly not about the art right nobody's buying
most PFP collections because they think oh it's grail art they're buying the collections because
they believe or hope a community can emerge around them and drive value and so in that context the
licensing discussion is very tactically driven to what's going to encourage people to invest in
the pieces whereas what we saw with kath and what we're seeing here with x copy is yes also cc0 but
i think cc0 with a different mental model and framework any thoughts on this no I mean i like
his art too so okay well with that we ran i think i don't i don't want to say we ran over we did an
hour and a half and i think that that's what we needed to do this presentation if we had tried
to do it an hour i don't think we could have done it so my suggestion is to be i have on my screen
open the questions so i'm going to read the questions and i'm going to let you answer them
because we have an expert from the uspto here i mean we need to take advantage of this
i love this one this is great how can fedenza be trademarked when there is a town in a really
called Fidenza how does the law work in that case um yeah so that's a great question so it would have
to be geographically descriptive and because there's likely no connection or nexus for the
actual trademark person or Tyler Hobss in this case um with the actual Fidenza in Italy it would
not be descriptive of that specific place so there will have to be a nexus and evidence that
the trademark is being used geographically descriptive in a geographically descriptive
manner that the standard used so Fedenza so it's basically it's similar to kind of
uh trademarking like a town that's very rural and remote for um computers what would be the nexus
there so similarly that's that the way the trademark office would kind of read that um and
they will have to find evidence that is geographically descriptive in that sense so this comes down
to the issue of classes right you don't just get a trademark for everything you have to get a
trademark for something specific and Fidenza the town is probably not making an if generative art
NFTs and so there's no overlap there right is that yeah what do you think about it I think they
yeah but they're also the easiest way to kind of understand trademarks is the likelihood of
confusion and that's kind of what trademark says is to prevent consumer confusion in the
marketplace in the in commerce so um someone basically the easiest way to understand is
if you see Fidenza an NFT are you going to associate Fidenza the town in italy or are you
going to just refer okay if somebody tells you hey did you buy that Fidenza you're not gonna
associate it with that italy town you're gonna associate it with the NFT art right so that's
that's the indicator kind of purpose of of trademarks and that wouldn't be geographically
descriptive in that sense so it just is intended to prevent the consumer confusion and I don't know
that Fedenza as the town will create any kind of like confusion and the consumers find that it's
related to the actual town in Italy yep makes perfect sense okay next question how just would
like to confirm that AI works at the moment are not protected under copyright law so no it's not
tough it's just there's it's linguistic it's so basically creating a work of art with AI
and you name the author the AI system so the author is not you as a human
inputting some code some kind of basic layers into the system or a blender and then the output
is you the owner but you're naming the author the actual machine that created this work so
that's different than saying I used photoshop or I used blender or dally to create this specific
work of art so during the examination process to get a registration and we've seen this being
posted on Twitter lately they are they ask you questions they're going to ask you how did you
use the system what did you input into the system and that's how you're going to determine this was
mostly in again there's no clear line as to what they're using to determine what enough
input for my human being is as opposed to just machine made um so that that's the difference
is I'm naming the author the machine as opposed to naming me as the author in the creation output
and it's me owning that output um ownership that that was created with the machine does that make
sense I hope that that's clear it's it could be confusing. Right my takeaway is how you presented
might also make a difference right if you go like that case that you mentioned say hey the AI did it
registered on the AI you're gonna get a no right if you're gonna say yeah I did this but I used some
tools to help me you might get a yes is that accurate yes yeah it does but it'll in in that
process they're going to ask you how much of you how much input from the human being was there
basically in using that that that machine but yes essentially that's how you present it it's going
to make a difference and that there was an article recently on the uh I think it was a comic
strip or a comic book that received a registration using a specific AI system they named themselves
the human being as the author but they also specified they use midnight uh journey as the
system that they utilize and during the process of dissemination they probably were asked how
much input they put into into midnight in order to receive that output so that's how
they receive that cover registration. Got it okay. Next question are all these topics considered
similar across all jurisdictions do we need to register a trademark across all jurisdictions
so when you have a for trademarks you will get a federal registration so that federal
registration is basically saying you you have users in commerce across the state
and um that gives you like a federal kind of protection and you don't have to register in a
specific jurisdiction so like a state if that I'm not sure if they're asking international or
national so within the US but within the US you could register it you know with each state but
that's only going to protect you geographically in that area that that geographic area that you're
kind of uh trademarking it so if I were to register in Florida for example you know that
will give me protection in Florida and that would be with a trademark office in the floor
like they each state has its own trademark process but if you file with the USPTO then
you're getting a federal registration and that will give you a nationwide protection
and if you wanted international protection though you'd have to file in other countries too right
you yeah and there's also a system called the Madrid system that allows you to apply it's to
have one one specific application that allows you to have protection different jurisdictions
it's a little bit of a complex system so I won't get into details but you would basically it would
be more financially easier to go through that process than having to go through each country
because then you'll have to have an attorney in most countries and the USPTO requires that um
you know if you're applying from abroad that you have representation in the US.
okay this is the part I think you're saying this is where you get a lawyer
I have to explain all these things to you yeah it could be it could be complex it could be complex
okay the question says the last week 65 tonight mentioned that most NFTs are not unblocked chains
they're simple pointers what I what I think this question is most of the art is not on chain it's
on ipfs or our wave our server does this create any fragility from a legal point of view um I think
two things uh first I think we have AWS holds the terms of use I think there's more fragility
in that sense because you're basically letting a third party host whatever rights you get in that
token in a third party website in the best case scenario they'll have that also in ipfs but um
fragility from a legal standpoint no I think more from a technical standpoint I think that you
the blockchain is always going to dictate you know who's has ownership but the pointers whether
that pointer works or not I think it's just more creates more of a centralization because someone's
going to have to pay for that ipfs so if we're kind of to if we want to emphasize or kind of push
towards that decentralization you're kind of going against the grain if you have someone
having to pay for that ipfs to continue hosting that so I think that's why some NFT projects
are moving towards having on chain art and moving the arts on chain so that there's no actual
fragility in that sense and our way was a little bit better you pay upfront rather than
continuously having to pay that's a simple way to describe it but from a copyright perspective
it shouldn't make a difference right like where it's hosted no not really it no
it's kind of like when you buy a painting and you keep it in a museum you know it just depends
on which museum you choose and just if you still own the copyright regardless of where
that that's sitting okay that makes sense this one I'm going to take it says have I deemed
my cryptopunk 6529 is cc0 and the answer is of course no because the further answer is
I'm not allowed to that's not my decision to make that's a decision that Yuga Labs was to have to make
if they were ever to make that decision I don't think they will but like in any case
they would be the ones to make that decision I am in effect a licensee of Yuga Labs as it relates
to 6529 there's a license agreement that I have to follow what we mentioned earlier
and that license agreement wouldn't allow me to on behalf of you to declare that my
punk is now in the public domain right that's a you get a decision not a me decision this is
correct is this correct yeah and the way the easiest way to understand is you can give what you
didn't get yourself so you can give more than you received so you receive an exclusive license you
can give an assignment at that point so you can it's kind of like a funnel you can give more than
you received okay here is a semi-technical question I think I don't think it's hard but let me see
is there ever only one copy of artwork associated with NFT an example they use is IPFS that multiple
copies may exist on each computer that's pinning it which one's the true version and does that even
matter in any way no it doesn't matter and the way I see it is when the creator and I'm going to
give an example so let's say you hire someone to make a piece of art for you the moment they created
that piece of art and put it in tangible form that's the that's the original basically so anything
else and again this is untested water so this is just an opinion it will be in maybe some different
practitioners thing differently but once you put an IPFS that's a copy of that so you know you have
ownership over the copyright but that's just basically a display of it or maybe a copy or a
display of the actual copyright that you have ownership over but the moment that was put into
tangible form that would be the original and doesn't really kind of make any difference
because it's just the way that it is displayed so you could display it on IPFS or aws or Arwave
it is the way that it's being displayed in multiple nodes host those things so that's
what you're referring to um it would just your copyright would not be affected by that
yep that makes perfect sense another Fidenza question if I sell a Fidenza my Fidenza I wish
I don't know if it's a person means they wish they have a Fidenza or they wish they could sell
a Fidenza uh what happens to the physical printed artwork that I also bought of my piece
does the new owner have the right to also print the same piece are they open editions or one of
ones and I'll just add here I think Tyler does I think just print for the first person who asks
regardless of the token but how do we think about this from a copyright perspective um I think the
copyright holder dictates those rights so we will have to go to Tyler Hobbs and those terms he
and he he does he prints it for I think the first few um the first I think the first holder
and if you go to his website it says like which ones are available and which ones are not um but I
would I would say that that's depending on him and I know he's mentioned in the past he's he's
written articles I don't know if any if you've seen this but he wrote an article about why he
didn't want to have cc0 as in his work of art he actually wore what he wanted to keep a
non-exclusive license and why that the reason why he kind of leaned towards that but I would lean
towards this read the terms of Tyler Hobbs and each one of the Fidenzas in each one of his works
um before we determined that right and so this is a good example of Fidenzas are
released under a traditional license right they're not a commercial or cc0 and the copyright
is owned by Tyler and that copyright can be expressed in um the nft art that's on Shane
in the case of Fidenzas but also a print and because Tyler is in charge whatever the rules
are on printing fidenzas Tyler gets to decide and Tyler could also decide to change the rules
right tomorrow he could say that everyone that has a Fidenza could ask for a print if they want
I mean he might not want to do that but if you wanted to he could right yeah those are copies
those would be considered copies of the copyright and he would continue to be the owner and
he does not mention anything against cc0 he said just not every project is intended to be
nz zero and I agree I think they're you know each model is applicable to each project differently
okay we have a question here about virtual clothing that says of trademark of
clothing is a complicated matter one cannot trademark a plain blue shirt but the logo on it
can we expect that virtual clothing given that the underlying code is unique will be applicable
to trademark e.g. will we be able to trademark a plain blue shirt so it would have to indicate
source so the plain blue shirt is not indicating source that would not function as a trademark
but what you're asking is that it's hard to trade and I don't know if they're confusing
copyrights and trademarks I think you might be a little bit of a confusion there but if it's just
the blue shirt that's indicating source as this source of the remaining goods that you have then
I would apply for a class nine which is a non-domotable digital asset that points to the blue shirts
that you're selling that would be what you basically have to trademark and that's that that
blue shirt you could actually have a trade dress which is like kind of the pack could be potentially
even packaging so like the coca-cola bottle has a trademark on the trade dress so like the way
the coca-cola bottle looks so that's what you're referring to and you could have multiple ways of
kind of protecting that blue shirt that you're referring to. okay and I think you're right it
might be unclear if this is a trademark or a copyright question okay with regards to the
can't-be-evil license what's the licenses development and acceptance trajectory and how are high
potential stakeholders responding to it I think for the benefit of the audience the can't-be-evil
license is a sample NFT commercial license that Andreessen Horowitz developed on their own
I had they had asked me for some feedback that I gave it was an Andreessen Horowitz project that
then they released to the world and said we think this is a good commercial license and feel free
to use it what are your views on the license have you seen people adopting it you have any
perspective on this um I'll say this I think everyone it's going to I don't like templates
personally just because I think templates kind of uh you're adopting someone else's thought
process basically on what they intended to give um but I think it's a good framework for you to
think about okay like do I want this and you could slice and dice however you want so like you
as a copyright holder you get to have all the bundle of rights that we mentioned earlier at the
beginning and you could slice them and dice them however you want so you could give anyone the right
to for going back to the analogy of the house you could get someone the right to enter your kitchen
or only enter your bathroom so it's you you have the say on how much you want to give and what the
scope of that is um so for those I think this is a good starting point I really think they did a
great job of kind of like addressing some of the issues in this space but I think you need to read
those through Lindsay how applicable they are to what you're intending to grant and what you're
intending to keep a control over yeah this makes sense it's how I think about it too I mean you have
it's a very interesting template to look at there's no creative common templates look like I mean
honestly I think the cryptopunks license is quite good in that dimension that's another area to look
at and I don't know that any major projects are taking these directly copy pasting and not making
any changes but in a way it doesn't matter right like if there are good ideas and people put them out
there um it'll help the space move forward yeah yeah oh good let's take maybe a couple more questions
and then I mean I thank you we've taken up a lot of your time now we're heading towards two hours so
I do want to bring it to an end at some point so let's do a couple more questions and then wrap
this up this is blockchain is borderless which it is or is crypto assets public watch answer borderless
how do you think about I'm going to rephrase the question a little bit but how do you think about
copyright and licensing across a variety of foreign countries
um so that's an interesting question because as far as copyright goes um there's no such thing
as international copyright so each country has its own regime that protects authors and they're not
extraterritorial so um that does so that our US copyright does not protect against copying outside
of the US works by American authors but we do have some treaties so in specific jurisdictions that
have signed on so treaties like the burn convention um and that basically you and this is a very
complicated area so I don't want to get too deep into it but if an American author for example is
in French in France they will have a member of the treaty party like they will have the same
rights as a French author would have um but again there's there's more to it than that so it just
might take on it is um we've been fighting over and international rights and some kind of a
kind of across the board kind of standardization for a long time I doubt we're going to get to
a place where everyone's of the same regime um but there are some treaties that allow us to
have some rights that are similar to or that will have the same treatment if you were in that
jurisdiction and a specific person from that jurisdiction so short answer is it's complicated
possibly more complicated the internet might be even more complicated than international
trademarks less standardized than trademarks are maybe yeah I would say so um it does like
there's section 104 which potentially protects like unpolished works so like there's there's a
different like a kind of nuances to international space that could be very complex but for
the most part just know that if you are part of a treaty which the US is of such as the burn
convention you likely have some rights in that jurisdiction that's also part of that same treaty
and they could be very similar and I don't want to speak in generalizations but yeah they tend
to be very similar not to generalize okay last question this is a funny one uh
crypto punks versus crypto funks they look exactly like the exact same pfp just mirror image
which any copyright issues there until someone brings the lawsuit then I'll refrain from that
conversation because I know he tried to be mca but um I think it's just depends on who wants to
litigate that okay right so that would be a specific that have to be a specific lawsuit
on a specific topic and then we'd discover I assume the crypto funks would make some type of
fair use commentary type argument and if you go wanted to pursue them they would say it's
not that you're commercially using my copyright but so far this in the broad crypto punks versus
crypto funk sense has not gone to court and so the reality is we don't know until it happens
with a specific set of facts and specific set of arguments how a court would decide right yeah and
I say that also because they could bring into question the copyrightability of the crypto
punks so that's why it's it's more than just hey are they similar it's a little bit more complex
because someone could bring into question like is that even a copyrightable um subject matter
because they're so they were created by AI or and I know Professor Brian Fry has an
article on the copyrightability of crypto punks so that's why I think there's a lot of things that
could come into question if that also comes about in a litigation right so because in a way that
we're not in a way I mean the crypto punks like a lot of general projects a lot of PFP projects
are generative right you didn't know what streets we're going to get and so what you're saying is
is for there to be a lawsuit here you go would have to bring it right and if you're
brought the copyright holder would have to bring it right yes um and that's because they gave exclusive
rights to so like when you give exclusive rights normally and then this is how it's enforced normally
when you give exclusive rights you give that person who gets that exclusivity the right to sue as well
because it's exclusive to you you're basically taking my place as the creator in a way legally speaking
so um the holder would have to bring that so if you're somebody's in front of your
punk you could potentially bring that but then they might come back in the defense and say well
you don't have something that is not even uh copyrightable because it was created by AI so
therefore there's no there's no actual creation of that's allowed to be copyrighted in the first
place wow and you have a registration and you have to have a registration in order for you to
bring that into law so even in the in the first place you also have to have the registration
which you could potentially have and I think they do mention that in the terms of use you could bring
that you could actually register your asset and I think they they mentioned
that briefly in the terms of use amazing but you have yeah they explain how you want they want they
want to keep some kind of control over it over the registration as I think they want to be named as
the the owner and you could be uh or the author I can't recall but it's in the terms of use that
whether you could register wow this is where this stuff is super interesting super complicated but
I mean just utterly fascinating we are here on the frontier I think of IP and technology and networks
I think we need to say an utterly gigantic thank-you to Ellie for today she a presentation was
hers she put it together I just put in the pretty pictures that was my contribution was like I copy
pasted some pictures in there all of this was Ellie it's obvious she knows everything inside out
and backwards I very much appreciate the time she gave us so everyone please give her a virtual
round of applause and thank you so much thank you I think you did a lot more than that so thank you