It's no big secret. When NFTs broke out as a coherent asset class in 2021, their value proposition was largely rampant speculation. Since then, NFT projects have incurred the following costs: countless They are reorienting their brand towards a more serious-sounding sustainable future. Most people have chosen to go all-in on the ephemeral and provocative concept of intellectual property or IP.
However, what exactly IP means in such a context and how much IP rights an NFT project can bestow on its owners remains to be resolved. Those unanswered questions resurfaced this week at Yuga Labs. billions of dollars The company behind Bored Ape Yacht Club—announced The company plans to grant exclusive commercial rights to the owners of Moonbirds, the Ethereum NFT collection it acquired. During February.
There was just one problem with this plan. In 2022, the original creators of Moonbirds submitted their collection to Creative Commons 0 (CC0), a very robust legal tool to waive copyright claims to Moonbirds NFT artwork, and created a pixelated owl character. Public domain.
The public statement posted by Moonbirds on Monday on this matter was perceived as an attempt to avoid this reality. “If you’ve ever built something in the CC0 era, that’s great,” the company says. I have written. “But now I need to own a Moonbird to keep it going.”
Twitter users were quick to push back. Several people, including copyright lawyer Alfred Steiner, argued that the company's position was legally invalid. Because Moonbird is now in the public domain and no one can put the toothpaste back in the tube.
It didn't take long for Yuga to adjust his position. Within hours of the initial announcement, Greg “Garga” Solano, the company’s co-founder and CEO, said: I have written Commercial rights related to Moonbirds are granted only to new 3D versions of Moonbirds artwork and only to current NFT holders.
Solano said these commercial rights will be similar to those enjoyed by Bored Ape Yacht Club NFT holders. For years, Yuga has allowed her BAYC holders to create and sell her Bored Ape-themed endeavors, including: hamburger restaurant and canned water companies. This means Moonbirds-themed chocolate bars and stuffed animals may be coming soon, but only his current NFT holders will be able to create them.
So what is the truth? Will everyone be free to riff on the Moonbirds copyright until the end? Or does Yuga have the power to control the creators of Moonbirds-themed merchandise?
According to Brian Frye, a law professor at the University of Kentucky who specializes in NFTs and intellectual property, both statements can be true at the same time, and this fact has implications for how IP is currently understood within cryptocurrencies. It highlights important issues regarding what is being discussed.
For Frye, it all comes down to the crucial difference between copyright and trademark. When Yuga says that Bored Ape or Moonbirds NFT owners have special commercial rights, the company is implying that those are from the individual NFT copyrights.
Copyright protects the content of a work, such as the synopsis of a book or the unique features of a painting. Therefore, Mr. Yuga would argue that Bored Ape and Moonbird each have their own copyrights, and that their owners can enforce those copyrights for their own benefit.
However, Frye and other legal scholars Alfred Steiner—Bored Ape Don't believe that commercial experiments like the burger joint actually rely on copyright. Instead, Frye argues, they are using the generalized Bored Ape brand, which falls under trademark law.Simply put, people line up to eat a Bored Ape burger because it's affiliated with the Bored Ape Yacht Club brand, not because it happens to depict Bored Ape. #6184 in particular.
That distinction is a double-edged sword.In the case of the Moonbirds controversy, it is likely that Yuga can Police exploit Moonbirds brand commercially. But it also means that the whole concept of separate copyright-based commercial rights controlled by NFT owners is somewhat fanciful.
In reality, Yuga is just saying selectively choose do not have Sue current NFT holders for trademark infringement. But if a company changes its mind, there is little to protect its holders.
Meanwhile, the original Moonbirds submitted under CC0 will remain in the public domain. However, the CC0 distinction does not confer any rights in the Moonbirds trademarks. Any average person who wants to open a Moonbirds ice cream shop in the near future will likely be at risk. legal ridewhen receiving a harsh message from Yuga's lawyer.
Decryption We reached out to Yuga Labs multiple times regarding this matter, but received no response.
For Frye, the Moonbirds episode highlights how IP is considered a buzzword and value-add for NFT brands, despite the lack of legal clarity surrounding the topic. I'm doing it.
“There are certain subsets [Yuga’s] These are customers who are really adamant about the idea that intellectual property is important,” Fry said. Decryption. “They don't even know what it means, but it's a talisman: 'IP! Whatever it is, we want to own the IP.'
In fact, in the hours following this week's announcement about Yuga's Moonbirds, the collection increased by almost 30% in cost to its lowest price, the cheapest listed NFT on the market. NFT price floor.
But that short-term victory could be disastrous. Ever since NFT prices collapsed during the crypto winter of 2022, Yuga has struggled to find a way to regain the cultural dominance it once enjoyed. Once he was at the peak of the project, he joined BAYC in April 2022, costing him nearly $430,000.I just need it now $42,000.
Last week, on the other hand, announcement CEO Greg Solano said the company had “lost its way” after learning that Yuga had just been hit with a wave of layoffs.
More aggressive enforcement of the Moonbirds trademark, as this week's announcement appears to be all about, could temporarily increase owners' awareness of Yuga's value. This may already be the case. But in the long run, Fry says, such self-imposed restrictions on who can participate in the Moonbirds brand could backfire in cryptocurrencies, where cool is everything.
“One of the things they want is some form of goodwill with their customers,” Frye said. “And it seems like an incredible 'L' for them to come back now and say, 'Hey, we're going to try to take back intellectual property rights that are mostly just illusions.' is.”
Edited by Andrew Hayward
