NFT promises to improve creative economies - ¿A cure for copyright?

NFTs are not an immediate solution to all intellectual property rights problems, but in the long run they may give creators more power than they've ever had before.

If you've had anything to do with digital arts, digital activities or both, in the last few months, it was virtually impossible to escape the breeding of news like unknown tokens or NFTs, they are game changers in the creative industries.

Since the Kings of Leon released their new album as NFT until the digital artist has closed the Christie auction with an incredible price on a piece of his work, the trend has developed in an incredible pace.

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Many people believe that NFT is not only a compelling new art medium, but also a tool that can generate new efficiencies and redefine the relationship between creators, their audiences and traditions and executives in the music and art industries.

Better management of intellectual property rights and simplified assignment of royalties are some of the most commonly used use cases.

Recognized copyright management entities, such as the Italian Writers and Publishers Association, are joining this movement and moving towards IP registrations on the blockchain, while musicians sell part of their work so that investors can subsequently profit from the commercial use of the CD.

To what extent are these solutions viable and what obstacles might their advocates encounter?

The quest for authenticity

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One of the main challenges facing digital content creators is how to easily make perfect digital copies of their creations at low cost. Since digital images or soundtracks can be copied and distributed immediately and in unlimited time, it is a challenge for creators to track how and by whom their work is used, so they should benefit from such use.

The main value proposition of NFT is that by creating a unique record of each unit of creative work backed by the blockchain, they can not only encode its authenticity and scarcity, but also enable artists to establish and execute related copyright transfers, usage and currency.

In particular, a significant improvement over the traditional world of intellectual property protection provided by NFTs is automatic execution.

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By using the core of smart contracts, NFT can enable artists to distribute copyrights and protect intellectual property rights without recourse to the courts or law enforcement.

However, in many cases, the relationship between smart contract-based technology and the existing legal framework may not be so straightforward.

¿What do NFT owners actually own?

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In most cases, by default, ownership of the NFT does not grant anyone ownership of the underlying work. Instead, it can be viewed as a digital certificate that proves you have a unique, collectible version.

There really is no protection of intellectual property rights without digital rights management.

By itself, NFT is just a serial number, and an additional layer of functionality is needed to allow people to re-share the underlying assets, while ensuring that both the creator and the sharer can get their share.

NFT smart contracts can be programmed to control different aspects of creative work. Perhaps the most restrictive option is the ability to block access to encrypted content.

NFTs can also be used as licenses, and those who purchase them can obtain the right to use the content for commercial or other purposes, but without ownership.

Copyright and fractional ownership

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In today's creative industry, most of the value generated by digital art flows to intermediary agencies such as record companies and distribution platforms. Thanks to blockchain technology, the balance of economic power in this field may soon shift to a direction that is more conducive to creators.

In addition to unchanging evidence around the ownership and provenance of assets, NFT also makes it possible for buyers to own part of the asset. This mechanism allows unprecedented flexibility that can use copyright.

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As the market matures, in addition to licensing, several NFT-based monetization models have emerged. These may include licensing, priority subscriptions, and redistribution of data through appropriate identity management.

Relation to copyright law

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The legal aspects of many of the above processes are still unclear, because the introduction of an NFT-based intellectual property management mechanism must be coordinated with existing protection and enforcement measures under current law.

Confirmation of asset ownership has not yet reached a judicial consensus. Unless NFT is considered equivalent to a paper or digital certificate, the scope of the concept will be limited to digital property and consumer goods.

The biggest bottleneck is that almost all intellectual property rights are registration rights, which means that the owner of the rights must be included in a governmental unit. This creates a public database with subsequent questions or disputes. It would be difficult to create a similar situation with CLS where all parties, in particular the rights owners and the judicial system, agree.

One relates to the first sale doctrine, which generally prevents copyright owners from limiting (and thus benefiting) subsequent sales of physical copies of their works, something that NFF may allow creators to do.

Another reason for concern is that, under current law, U.S. copyrights can only be transferred through a written instrument, a rule that likely does not comply with the transfer of a digital token.

Technological infrastructure

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While technology solutions related to IPR protection existed in the Blockchain space for years, overall, the NFT sector is in the early days of its journey to rights clearance. Creator Economy Author.

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The technology needed to promote them in your environment and you have created savings must be applied to a very specific set of needs.

Simple tools to create and launch NFTs, strong smart contracts to benefit from NFTs for more complex applications, immunity to removal to ensure that the original creation cannot be replicated, low transaction fees for healthy participation, scalable to support thousands of a million . Creative assets, and low carbon footprint for sustainability of the communities, which these activities serve.

Currently, a major problem is the fragmented landscape of NFT platforms designed to provide royalty payments to artists.

Correct payments, in many cases, are only applicable to purchases on each separate platform. However, he noted that protocols offering scalable solutions are already emerging.

EIP-2981 could enable content devices to integrate smart contracts that automate the royalty payment process directly into NFT. The result would be that artists could receive royalties regardless of where the customer acquires the NFT.

There is little room to doubt that non-fungus signs have the opportunity to put an end to the current models of intellectual property rights in the creative industries.

However, it is also true that integration is not seamless, nor is it currently because multiple voltages between legacy systems and NFTs need to be resolved.