Document Type
Article
Publication Date
2024
Abstract
With cryptocurrency Bitcoin’s prices continuing to hit record highs, overall public interest in NFTs will likely increase significantly as it ordinarily has in the past. But before purchasing an NFT, it is important that consumers understand exactly what they are buying. Many assume their purchase will include the associated art that is shown in the individual NFT marketplace listing, whether it be a CryptoKitty, a Bored Ape, or a single video clip from an NBA game. However, in reality, most buyers are getting little more than a few lines of code on the blockchain. What explains these misconceptions, especially when some NFTs are being sold for over a million dollars? More often than not, it is due to a combination of misunderstandings relating to technology, copyright law, and contracts. Complicating matters is that an NFT does not fit within a single existing legal framework, whether it be property law, copyright law, or contract law. Additionally, there are significant differences between NFT marketplaces, each one with its own set of contractual terms and conditions. Furthermore, individual artists and sellers on these sites invariably have their own agreements that often define how, if at all, the NFT buyer may utilize the artwork linked to the NFT. Lastly, but especially problematic, is how difficult it is to locate these contractual provisions, often requiring a consumer to essentially go on a virtual scavenger hunt to try to find the terms and conditions that purportedly control. Accordingly, in this article, I advocate for increased transparency to ensure consumers have an adequate opportunity to identify what rights they may or may not have in the underlying artwork. This is necessary not just to avoid disappointment but to prevent purchasers from opening themselves up to potential legal liability, including copyright infringement. A possible NFT buyer should be able to discern whether reproducing, distributing, or otherwise commercially exploiting a work is permitted to calculate the true cost of an NFT purchase. This Article begins in Section II by discussing the technical aspects of NFTs. Next, Section III studies the fundamental copyright rights, doctrines, and limitations pertinent to NFTs. Additionally, the Section provides a real-life example of how confusion over copyright rights can lead to very costly mistakes. Section IV explores how methods of contract formation have evolved in response to technological advancements, including the increased use of “clickwrap” and “browsewrap” agreements in the digital age. Section V examines the problematic ways NFT contractual terms are presented to consumers by studying the actual listings of several NFTs currently offered for sale and detailing the copious number of steps a user must take to locate the agreement that supposedly controls the parties’ transaction. These provisions are then analyzed and compared to illustrate the extent to which an NFT seller may or may not choose to provide the purchaser with rights to any digital artwork associated with the non-fungible token. Lastly, Section VI provides recommendations for improving transparency in the NFT marketplace.
Publication Title
Georgia Law Review
Volume
59
Issue
1
Article Number
1167
First Page
207
Last Page
264
Suggested Bluebook Citation
Davik, Christine S. The Art of NFTs: Copyright, Contracts, and the Fallacy of Ownership, 59 GA.L. Rev. 207 (2024)
