A cure for copyright ills? NFTs promise to empower creative economies
April 15, 2021. Summarized by summa-bot.
Compression ratio: 35.2%. 3 min read.
NFTs are not an immediate solution to all IP rights issues, but eventually they can give creators more power than they ever had.
The link between the NFT and content may even just be conceptual, but it can still have value as long as the NFTs are scarce. ”Gunther Sonnenfeld, CEO of digital ownership solutions provider RAIR Technologies, noted to Cointelegraph: “There’s really no intellectual property rights protection without digital rights management. ” On its own, an NFT is merely a serial number, and an additional layer of functionality must be put in place in order to allow people to reshare the underlying asset while making sure that both the creator and the sharer get their cut. There are different aspects of the creative work’s usage that NFTs’ smart contracts can be programmed to control.
If the work is protected against copying and redistribution through the NFT and access is by, for example, a one-use code to view, then it would be protected beyond copyright. ”NFTs can also be used as licenses, whereby those who purchase them acquire the right to use the content for commercial or other purposes, but they do not get the ownership right. Royalties and fractional ownershipIn today’s creative industries, the bulk of value generated from digital art goes to intermediaries such as record labels and distribution platforms.
These could include licensing, preferred subscriptions and data redistribution through proper identity management. Relationship with copyright lawThe legal side of many of the processes described above remains fuzzy, as the introduction of NFT-based mechanisms for IP rights management will have to be reconciled with the protections and enforcements that exist under current copyright law. According to Lokesh Rao, CEO of NFT-based protocol Trace Network, recognition of asset ownership still must be agreed upon in the court of law, and unless NFTs are recognized as equal to a paper or digital certificate, the scope of implementation of this concept will be limited to digitally owned and consumed goods. D'vorah Graeser, CEO of AI patent search tool KISSPlatform, commented to Cointelegraph: “The biggest bottleneck is that nearly all IP rights are registered rights — meaning that the rights holder needs to register with a government entity.
Another concern is that, under current legislation, United States copyright can only be transferred using a written instrument — a standard unlikely to be met with the transfer of a digital token. In sum, it’s apparent that incorporation of NFTs into the business of copyright protection on a large scale will require some years of court precedent, as well as modification of codes and statutes that govern intellectual property law. Technological infrastructureWhile technological solutions related to IP rights protection have existed in the blockchain space for years, most commentators who spoke to Cointelegraph on the matter agree that overall, the NFT sector is in the early days of its journey toward taking over the copyright arm of the creator economy. W. Sean Ford, chief operating officer of blockchain platform Algorand, opined that the technology needed to power these assets and the economies being built around them must cater to a very specific set of needs, listing them for Cointelegraph:“Simple tooling to create and launch NFTs, strong smart contracts to leverage NFTs for more complex applications, immunity to forking to ensure the original creation can not be replicated, low transaction fees for healthy participation, scalability to support billions of creative assets, and a low carbon footprint for sustainability of the communities these assets serve. ”Currently, a major issue is the fragmented landscape of NFT platforms designed to deliver royalty payments to artists.