What block the development of NFT interaction- NFT’s copyright?

Recently, Tencent sued DD373, a trading platform for Infringement Dispute over Right to Network Dissemination of Information. Because DNF accounts and gold coins or props were traded on the DD373 platform, Tencent requested DD373 an apology and to compensate more than 40 million yuan. During the trial, Tencent’s attorney said: DNF is Tencent’s game. The player’s game currency and equipment and roles are owned by Tencent, and the player has no right to trade personally. This made a huge influence among the game fandom.

There is a slogan showing in the homepage of the blockchain game MyCryptoHeroes “All the time and enthusiasm you put into this game will become your real wealth.’’ It is definitely not flubdub, but the common characteristic of blockchain games.

From CryptoKitties to Axie Infinity (according to Token Terminal data, Axie Infinity protocol revenue was 166.2 million US dollars in the past 30 days), more and more players prefer blockchain games, and behind every blockchain game, NFT Is the foundation.

Players’ time and enthusiasm cannot be realized without NFT liquidity platforms such as Opensea, Kanamit, and Zora. However, the copyright issue of NFT in the development of the industry is becoming more and more obscured today, and the contradiction is becoming more and more prominent as well.

There are three types of NFT assets: one is the native on-chain assets, including game props, game characters, and various standard tokens on-chain; the second is the on-chain reissuance of native online assets, including music, videos, images, etc.; the third is traditional offline assets are reissued on the chain, including land, antique, automobiles, etc. Blockchain game NFTs are easier to handle if they are assets on the original chain. The authenticity can be distinguished from the previous Hash records. However, for the on-chain reissuance of off-chain assets, copyright issues cannot be avoided after all, and endorsements of some centralized organizations may still be necessary. Such as the NBA Top Shot made by Flow, actually signed a copyright agreement with the NBA offline.

At present, the use of agreements of different NFT platforms are slightly different. The agreement of the Opensea platform regarding copyright rights has been adjusted to “Any transfer of title that might occur in any unique digital asset occurs on the decentralized ledger within the Ethereum platform. We do not guarantee that Opensea or any Opensea party can affect the transfer of title or right in any crypto assets. ”

Zora stated its intellectual property rights as “Each creator or artist that mints content using the Site and/or Zora Protocol reserves all intellectual property rights in and to such content, unless specifically granted.” Two-star NFT projects on the IBOX NFT platform under Huobi have both encountered infringement disputes, and the Binance NFT platform clearly established in the user agreement” For NFT Buyers: When you purchase an NFT, you own the NFT that is associated with certain NFT Media, but you do not own any intellectual property rights in such NFT Media except for the license grants expressly set forth herein. ”

We must first distinguish several concepts here, ownership, intellectual property and copyright. Ownership is the state or fact of exclusive rights and control over property, which may be any asset, including an object, land or real estate, intellectual property, or until the nineteenth century, human beings. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties. Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The most well-known types are copyrights, patents, trademarks, and trade secrets. Copyright is a type of intellectual property that gives its owner the exclusive right to make copies of a creative work, usually for a limited time The creative work may be in a literary, artistic, educational, or musical form. Copyright is intended to protect the original expression of an idea in the form of a creative work, but not the idea itself.

Let’s analyze with examples. Kings of Leon, the first band to release an NFT album, which earned about $1.4 million. The terms of the auction clearly state that the buyer obtains the non-exclusive, non-transferable right to display NFT albums, they cannot obtain royalties from it and only for personal use and display it as non-commercial use. In contrast, when selling Crypto Kitties, Dapper Labs allows buyers to use the NFT for commercial purposes, as long as the total annual revenue does not exceed $100,000.

In addition, most sales contracts do not provide buyers the right to modify and make derivatives for their NFT. As far as the general NFT platform is concerned, they don’t protect the rights and interests of creators, nor buyers. Just like they speak in the user agreement, it is hard to protect the overall rights and interests of the traditional offline assets compared to the on-chain assets.

The existing NFT technology cannot reconstruct complex data such as pictures and videos. Computers use groups of 0 and 1 to represent colors, colors make up various pixels, and pixels make up various pictures, and many pictures finally make up a video. Due to the limitation of the storage capacity of the smart contract of the blockchain, the metadata of many NFTs is separated from the storage of the smart contract of the NFT. Instead, the contents such as pictures and videos are stored on a centralized server, but if the centralized server or cloud system that represents the NFT fails or is damaged, it means that the content is lost. Even if you upload the metadata of the NFT to IPFS, there is no guarantee that the data will not be copied. IPFS just tells the user that a certain node stores data at the relevant address, and if other nodes are interested in the relevant data, they can also copy it. As far as current technology is concerned, the development of relatively cutting-edge blockchain game NFT cannot fundamentally protect the rights and interests of buyers and sellers during transactions. The smart contract of the blockchain can ensure the safety and reliability of NFT transactions. But smart contracts have no legal force in most countries and regions. Blockchain smart contracts can guarantee that there will be no breach of contract in the delivery of NFT transactions. However, if the NFT transaction violates the intention of the parties, or the transaction itself violates laws and regulations or public order and good customs, the current laws and regulations cannot guarantee this. Therefore, the NFT generation and circulation process of other original online assets and traditional offline assets cannot protect the rights of owners at any level from the property, copyright, and agreement levels.

In the context of market behavior, a clear copyright agreement is especially important. It can not only make up for technical shortcomings, but also coordinate various regulatory and market deficiencies. In any transaction, the rights acquired by the buyer are determined by the sales contract, and NFT works should be no exception. Different types of NFTs require different copyright agreements. Combining the protocol code into the NFT is one of the important ways to solve the copyright contradiction of NFTs in the current market.

The Internet’s corresponding copyright development is mature enough, and the blockchain does not need to re-innovate a set of noun sets. The CCO protocol is naturally suitable for combination with NFT, and can form a set of NFT license agreements that are suitable for many environments. The Internet CC protocol has now been adapted to the laws of most regions and has been accepted by many countries and regions in the world. The Creative Commons license is a public copyright license agreement that allows the distribution of works protected by copyright. An author can use a creative sharing license to grant others the right to share, use, and even create derivative works. Creative sharing provides authors with the flexibility to protect those who use or redistribute other people’s works, so they only need to comply with the conditions specified by the author without worrying about copyright infringement. There are many different types of license agreements. The license can have different combinations, depending on the distribution terms. It should be noted here that the original CC agreement authorization is applied to all copyrighted works, including: books, plays, movies, music, articles, photos, blogs and websites, whether it is applicable to the original online assets and traditional offline assets of the NFT industry Assets need to be developed and studied.

Mixing and matching these conditions can produce 16 combinations. The four combinations are terms that include both “ND” and “SA” and are mutually exclusive; the other one does not include any terms, so 5 combinations are invalid. Among the 11 valid combinations, because 98% of franchisors require signatures, five clauses lacking “BY” are no longer used.

The NFT platform can follow the user habits of the CC license, and at the same time give creators a more universal choice in the form of smart contracts. Each creator can freely choose one of CC0, BY, BY-SA, BY-NC, BY-NC-SA, BY-ND, BY-NC-ND according to the characteristics of the current NFT. The corresponding license of NFT after Mint will be written into the contract simultaneously to facilitate the second and multiple resales and still follow the original author’s license. Such NFTs are easier to integrate with local laws and are easier to be widely accepted. Seven kinds of license agreements can generate customized license templates for creators to choose and adapt to ensure that the rights acquired by buyers are determined by the sales contract (agreement). Regarding CC0, consideration should be given to the universality of current laws in various regions, such as California regional laws in the United States, age restrictions in different countries, etc.; regarding BY, the agreement should specify whether the original signature should be written into the contract together, or the external form of the objective world; Regarding NC, an appropriate amount limit should be made in accordance with industry practices in accordance with the amount of annual income. For example, if it exceeds 100,000 US dollars, it needs to be renegotiated.

At present, the most popular NFT copyright license is the DLI agreement of FLOW. Dapper Labs Inc. (“DLI”) created this license as an open-source resource for use by a wider group of people to promote the adoption of the ERC-721 standard. DLI’s goal is to uncover the mystery of connecting users’ rights and at the same time authorize creators to license their works on a large scale, thereby becoming a blockchain-based art creator (for the purposes of this license, everyone is referred to as a “creator ”) Actively shape the future creator” DLI intends to use this license in each of its current and future applications, including CryptoKitties, to help guarantee that NFT owners have broad and meaningful rights in the art associated with the NFT they purchase. DLI encourages other creators to also adopt this license. The last revised version 2.0 of the DLI was completed in November 2018. Has fallen far behind the current NFT industry.

To ensure the long-term and stable development of the NFT industry, the most important thing is to solve the copyright issues of painting, music, photography, video and other artistic works behind the NFT. How to balance and protect the rights and interests of NFT creators, sellers and buyers, and how NFT enthusiasts can fully enjoy the convenience from NFT, requires a more complete copyright license. The CC copyright license may become a direction for the development of the NFT copyright license. The universal and widely recognized copyright license in the NFT industry will also be the basis for the long-term stable development of the NFT platform.