Who owns the copyright of NFT? Legal knowledge that creators must know

Owning an NFT doesn't automatically grant copyright; creators must explicitly transfer it via a written agreement to ensure legal ownership of the underlying asset.

May 09, 2025 at 08:43 am

The world of Non-Fungible Tokens (NFTs) has exploded in popularity, bringing with it a host of legal questions, particularly around copyright ownership. Understanding who owns the copyright of an NFT is crucial for creators, buyers, and anyone involved in the NFT ecosystem. This article delves into the intricacies of NFT copyright, providing essential legal knowledge that creators must know.

What is an NFT and How Does it Relate to Copyright?

An NFT, or Non-Fungible Token, is a unique digital asset that represents ownership or proof of authenticity of a specific item or piece of content, typically stored on a blockchain. NFTs can represent digital art, music, videos, and other forms of creative work. However, the ownership of an NFT does not automatically confer copyright ownership of the underlying asset.

The copyright of a creative work is a legal right that grants the creator exclusive control over the use and distribution of their work. This includes the right to reproduce, distribute, perform, display, or create derivative works based on the original. When an NFT is created, the token itself represents ownership of the digital asset, but the copyright remains with the original creator unless explicitly transferred.

The Difference Between Owning an NFT and Owning the Copyright

It's essential to distinguish between owning an NFT and owning the copyright of the underlying asset. Owning an NFT means you have a unique token that represents a specific digital item, and you can prove ownership through the blockchain. However, this does not necessarily mean you own the copyright to the item itself.

For example, if you purchase an NFT of a digital artwork, you own the token that represents that artwork, but the artist retains the copyright unless they have explicitly transferred it to you. This means the artist can still control how the artwork is used, reproduced, or displayed, even though you own the NFT.

How to Transfer Copyright with an NFT

If a creator wishes to transfer the copyright of their work along with the NFT, they must take specific legal steps. A simple sale of an NFT does not automatically transfer copyright. To transfer copyright, the creator must:

• Draft a written agreement that explicitly states the transfer of copyright to the buyer.
• Include the agreement in the NFT's metadata or provide it separately to the buyer.
• Ensure the agreement is signed by both parties to make it legally binding.

Without these steps, the copyright remains with the creator, and the buyer only owns the NFT itself.

Common Misconceptions About NFT Copyright

There are several common misconceptions about NFT copyright that can lead to confusion and legal issues. One prevalent misconception is that buying an NFT automatically grants you the copyright. As explained earlier, this is not the case unless the copyright is explicitly transferred.

Another misconception is that NFTs are a form of copyright protection. While NFTs can provide proof of ownership and authenticity, they do not offer any legal protection against copyright infringement. The copyright of the underlying asset must be protected through traditional legal means, such as registration with a copyright office.

Legal Risks and Responsibilities for NFT Creators

NFT creators must be aware of the legal risks and responsibilities associated with their work. Failing to clarify copyright ownership can lead to disputes and potential legal action. Creators should:

• Clearly state the terms of use for their NFTs, including whether the copyright is included in the sale.
• Use smart contracts to automate the transfer of copyright if desired, ensuring the agreement is legally enforceable.
• Consult with a legal professional to ensure all aspects of copyright law are addressed and to protect their rights.

By taking these steps, creators can mitigate legal risks and ensure their rights are protected.

Best Practices for NFT Buyers

NFT buyers should also be aware of the legal implications of their purchases. To protect their interests, buyers should:

• Read the terms of use carefully before purchasing an NFT to understand what rights they are acquiring.
• Request a written agreement if the copyright is important to them, ensuring it is signed by the creator.
• Verify the authenticity of the NFT and the creator's rights to the underlying asset to avoid purchasing infringing works.

By following these best practices, buyers can make informed decisions and protect their investments.

Frequently Asked Questions

Q: Can I use an NFT I own for commercial purposes?

A: Whether you can use an NFT for commercial purposes depends on the terms of use and whether the copyright was transferred to you. If the copyright was not transferred, you may need permission from the copyright holder to use the work commercially.

Q: What happens if I create an NFT using someone else's copyrighted material?

A: Creating an NFT using someone else's copyrighted material without permission is copyright infringement. The original copyright holder can take legal action against you, potentially leading to financial penalties and the removal of the NFT.

Q: How can I protect my NFT from being copied or used without permission?

A: While NFTs themselves cannot prevent copying, you can protect your work by registering the copyright with a copyright office and using watermarks or other digital protection methods. Additionally, clearly stating the terms of use for your NFT can deter unauthorized use.

Q: Can I sell an NFT I own without the copyright?

A: Yes, you can sell an NFT you own without the copyright. However, the buyer will only receive the NFT itself and not the rights to the underlying asset unless the copyright is transferred separately.