10,000 Legal Issues Surrounding Generative Artworks
I’ve had a fascination with NFTs ever since I discovered Larva Labs’ CryptoPunks collection about a year ago. I was sitting in my college dorm room with sweat dripping down my face after spending hours preparing for the LSAT. I had taken a quick break and logged into Twitter when I came across them: thousands of unique, pixelated images.
I watched video after video that night, learning about NFTs and how they are created. It was a tedious process, no doubt about that. The idea had my full attention and I wanted to get in on the hype.
I spent the next few weeks working on art designs to start my own project. Making art helped me de-stress after spending so much time studying for the exam which would in many ways determine my future in Law.
I started with a base frame of a bulldog and worked from there. I constructed several different features for my subject. I then created multiple attributes of each feature in order to diversify the pool. My goal of producing enough combinations to reach 10,000 images was almost completed.
Later, I learned basic coding commands, and generated images using computer language that I could barely comprehend. I felt like a hacker in a movie, entering the mainframe of the villain. I instructed the computer to assign numerical rarities to the bulldog’s features which created more unique images.
Lastly, I assembled images onto a data storage platform and wrote up a contract in order to mint my collection of images, which I called ‘Bulldawgz: The Dawg House’ onto the blockchain.
Honestly, I had no idea what I was doing. I minted all of my NFTs to the same wallet address. As it stands today, my project has a whopping 3 owners on Opensea: me, my mom, and my dad. Maybe my collection didn’t land me the money I needed to retire at 21, but it did instill in me a newfound love for the blockchain. I became active on Twitter and other social media platforms. I liked the idea of being in a community that seemed like-minded and close-knit.
My desire for learning more about the industry led me to DLT Law, where I was lucky enough to land an internship this summer. DLT’s partners — Samuel Goldfaden and Yitzy Hammer — were extremely accommodating and welcoming to a newbie like myself, giving me great insight into both law and the broader web3 industry.
As I embarked on my legal journey into this space, I began to learn about all things IP. Protecting new facets of technology is not anything new to the tech industry, and I found this aspect of the law to be fascinating.
Technological advancements continue to shape the world in which we live. The creators of these innovative technologies continue to develop their work with the comfort of knowing that modern copyright protections and relevant legal frameworks will provide the necessary tools to protect their coveted intellectual property. As new technologies, such as NFTs, emerge, it is imperative that the legal industry keep pace with the evolution of technology. The trajectory of modern IP law should, in theory, mimic the direction in which technology is developed in order to continue providing adequate legal frameworks. But is it? How do modern IP laws address the ownership of NFTs. This question greatly intrigued me and throughout my summer internship at DLT Law, I continued to explore whether protecting an NFTs IP, at least from a copyright perspective, is even legally feasible.
For the benefit of my newbie readers, NFTs (non-fungible tokens) are blockchain-based tokens that are unique and transferable. These assets could be anything from a physical drawing to an image of a tweet, or the portion of a house and their utility extends to wherever the creator’s imagination wants to take it. For the purpose of this article, I’m going to focus on generative art collections, minted and distributed in the form of NFTs.
My research also greatly contributed to Yitzy Hammer’s lecture on this topic, which he presented at the 5th Ethereum Community Conference (EthCC), in Paris, last week:
NFTs and Copyright
Presently, under U.S. law there is no copyright protection for the creation of generative art collections. What is known from previous litigation, however, is that copyright provisions do extend to projects that are created by humans with the assistance of computers. You cannot simply copy a design from a t-shirt. This is because the unique art displayed on the t-shirt, while made with the assistance of computers, is still, under law, copyrightable.
The U.S. Copyright Office utilizes strict guidelines when it comes to applications for copyright registration. The requirement of human creation has remained a touchstone in this process; although, there is currently no standard to go off of for creations like NFTs.
Is the work produced in an NFT one of human authorship, with a computer simply an assisting instrument in the process, or is the majority of the work performed by a computer? The former, as seen in copyright law today, would protect NFTs under the Compendium of U.S. Copyright Office Practices, while the latter remains to be distinguished beyond the scope of copyright protection.
In the next few paragraphs, I will explore some cases that have sparked controversy around NFTs. This will help those unfamiliar with the topic to understand some of the legal complications surrounding NFTs, from an IP perspective.
Art and Copyright
An NFT has several features that make it unique from other art forms. The first, as mentioned previously, is the actual art itself. This is where the interesting legal IP issues start surfacing around generative art collections, especially when third parties start copying existing works of art.
A prime example of this is Mason Rothschild, an artist currently being sued for his NFT project “MetaBirkins”. The project uses the title and features of Hermès’ famous faux-fur luxury handbags. While Rothschild claims that his NFTs are art and are therefore protected by his first amendment right of free speech, Hermès claims that the sale of MetaBirkins is misleading and dilutive to the company’s famous trademarks as a prospective buyer could potentially conceive that the new work was somehow sanctioned by Hermès. In any event, it’s now up to the courts to decide.
Another example is the recent lawsuit filed by Yuga Labs, the creator of the popular Bored Ape Yacht Club (BAYC) NFT collection, against contemporary artist Ryder Ripps. Several months ago, Ripps began minting identical copies of BAYC NFTs. Although indistinguishable through its visuals, Ripps claims he is “appending a different non-fungible blockchain signature to his project” and that his work is thus a new expression of the original art, constituting ‘fair use’, one of the defenses against a claim of copyright infringement.
Using this argument, Ripps supports the notion that he has a right to produce these works of art because he is using a completely different base URI (uniform resource identifier), meaning that because the digital file is stored on a different string of code it should be able to stand as its own unique piece of work.
Ripps continued to sell his ‘copied’ artwork on Opensea even after a DMCA (Digital Millennium Copyright Act) takedown notice was filed and then removed later that same day. A formal complaint, however, was filed on June 25th, with Yugal Labs calling for a jury trial and seeking both injunctive relief and damages for trademark infringement, false advertising, false designation of origin, cybersquatting, and unfair competition.
Interestingly enough, copyright infringement was not mentioned in the complaint.
Legal theorist Brian Frye believes the answer lies in the project’s terms and conditions, which give NFT owners the exclusive licensees of any copyright it owns. As such, those owning the Apes copied by Ripps may be the only ones in an actual position to collect statutory damages.
Those in support of Ripps’ cause see the holes present in IP law, claiming that holding a token does not give someone a unique claim over an image. Dave Steiner, a prominent IP lawyer, who is, coincidentally, representing Ripps in the Yugal Labs suit, argues on multiple accounts for fair use of all generative artwork images claiming, inter alia, that NFTs lack a minimum amount of creative authorship to qualify for copyright protection and that there are too few ways to express the same idea in a generative collection.
In other words, the majority of NFTs in a collection are not independently created, that is, they are almost certainly based on the distinctive traits of an earlier work from within the collection. The 10,000 Bored Apes in circulation are almost identical and only vary by single traits he says; therefore, the law would likely only grant copyrights to owners of the first few Apes which were minted and sold. This can be applied to a lot of NFT collections that utilize similar rarity patterns. In addition, the premise, Steiner argues, that generative artworks are not created by a human author, but assembled by code, makes them, at their core, unable to infringe on another work, given that they aren’t even artworks themselves.
Those on the opposition, however, call Ripps a plagiarist and see his acts as prima facie infringing. They point to his work as just another publicity stunt, as the artist previously copied Cryptopunk #3100 and attempted to resell it on the open marketplace Foundation (which resulted in Ripp’s work being removed altogether). Legal perspectives criticize the sale of exact copies of the BAYC and their misleading logos and collection names, especially when they are being introduced in the same marketplace as the authentic ones.
The case is a frenzy and will be super exciting to watch. I, for one, am curious if copyright will even be addressed at all here. It seems at the current moment that if this case goes to trial Yuga Labs will have to convince a jury that RR/BAYC has misled buyers in some capacity in order to collect damages.
Cariou v. Prince is a landmark ruling that Ripps has cited many times on Twitter in support of his mission. This case has to do with ‘appropriation art’ — the act of an artist reusing pre-existing objects or images in their works.
In this case, Richard Prince incorporated photographs originally taken by Patrick Cariou. Cariou claims that the photos Prince used were very similar and were thus infringing on his intellectual property, while Prince argued that his use of Cariou’s image fell under the scope of ‘fair use’ (one of the exceptions, where a work would not be considered infringing).
The courts agreed with Prince citing that his new work presented a “new aesthetic ‘’ by increasing the size, blurring and sharpening, adding new colors, and joining multiple photographs together.
Ripps sees this case as a decision that has helped set a precedence within the copyright community and further, should help establish his own works as re-contextualized images. He believes his works fall under the established prongs of “fair use” because they are on their own string of code and have their own unique blockchain signature attached to them.
However, some argue Ripps’ constant mentioning of Prince’s case might dig him into an even deeper hole than he’s already in. Prince has recently found himself the subject of another lawsuit, as he is currently being sued by photographers Donald Graham and Eric McNatt who found their artwork blown up to life size and featured in two of Prince’s portraits. The works are almost exact reproductions of Graham and McNatt’s originals. Prince claims he is “reimagining traditional portraiture and bringing the virtual world and social media to a canvas” to prove that they are transformative pieces and thus should be protected under the fair-use provisions of copyright law.
Does this sound familiar? It should because this is almost exactly what Ryder Ripps claims he has done to Yuga Labs’ work.
The Federal District Courts in the Graham and McNatt case disagreed with Prince’s position, arguing his work did not bring any new expression or meaning to the original pieces. Prince’s arguments relied almost entirely upon the outcome of the Cariou case as sufficient from a fair use standpoint.
While Ripps likes to analogize himself to the Cariou case, his works may be more closely related to the Graham and McNatt affair given the identical nature of RR/BAYC and Ripps own arguments to support them. If this is the case, it might be wise for Ryder Ripps to just stop mentioning Prince’s name altogether.
Code and Copyright
After the art is completed in an NFT project, code has to be written or manipulated from a prewritten script. Code can be copyrightable just like any other form of writing (Google LLC v. Oracle America, Inc., 593 U.S. (2021)), however, source code containing small snippets of script that provide only functional capabilities, do not fall under this protection.
The most controversial aspect of NFT projects, as relating to copyright law, is associated with the production of the generative artwork after the code writing is completed. Once developers run the code, the instructions sent to the computer are completed quickly, oftentimes with NFT projects creating thousands of images in a matter of seconds. Whether this part of the process falls under the “human authorship” classification remains the largest piece of the legal puzzle.
One landmark case, Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 58 (1884), deemed photographs to be original works of art, the product of intellectual invention, and ultimately copyrightable. In this case, it was determined that when a photographer takes a photo, he is using his camera as both a medium for the creation of art and as an assisting instrument.
Similarly, one can make the argument that computers are both the medium for the creation of NFTs, as well as the assisting instrument. Furthermore, an NFT artist could also technically create the same works of art that the computer assists in the process of by himself, by hand, just in a much longer amount of time. In this example, all 10,000 images the artist would create individually by hand would be copyrightable, so why in the former might this not be the case?
Debate stemming from the case of Feist Publications, Inc., v. Rural Telephone Service might be another piece of precedent courts will look to in the near future. Here, the U.S Copyright Office refused to register a work generated by non-humans because such work did not meet the creativity threshold . This prerequisite includes a “modicum of creativity” which is fulfilled with a low bar of inventiveness.
I wonder whether there is enough creativity (on the human side) combined in both the art and code of an NFT project to be able to copyright the work as a whole. This will be up to speculation until the courts can make their own interpretations.
One Solution
A remedy that some NFT creators are using to avoid stipulation and copyright issues around their products is distributing their creations under a Creative Commons Zero license (CC0) — no copyright reserved by the creator. This essentially grants the intellectual property as open source for a project and allows anyone to use the IP associated with it. These works come with their benefits and drawbacks.
One of these drawbacks is that it’s hard for creators to capture revenue from derivatives of their works. Works distributed under a CC0 license are not required to give attribution to the original artist and don’t allow others to build a brand or monetize a project as commercial rights guarantee. This is one reason why CC0’s don’t have widespread approval from the web3 space.
Some may be quick to point out the obvious: when no single individual owns the IP of a project, no one is around to discourage plagiarism or punish bad actors. When creators develop their work, they typically want to protect it at all costs for their own benefit and for the benefit of their holders — CC0 makes this impossible.
Supporters of the movement argue that owning an NFT still is the only way to access the perks and benefits the community has to offer and granting the public access to the IP is just a better way to commercialize the product because virtually everyone is able to. Furthermore, IP can be developed by an entire community and can allow projects to be seen as a collective effort. Further, CC0’s grant anyone permission to utilize artwork which ultimately solves the copyright issues occurring in the NFT space.
In Closing
Whether this is a long-term solution to the copyright issue of generative artworks is yet to be seen. Those on Twitter and Discord will continue to have front-row seats for the legal battles ongoing throughout the web3 space. It is without question that copyright for generative artworks needs to be addressed by the courts or by the legislature in the near future.
As I close out the last few days of my internship, I recognize that this is just the beginning. In crypto, there is a mantra “we’re still early”. Well, we most certainly are.
I started my journey learning about NFTs as a hobby, something fun to do on the side. I wanted something that would be both relaxing and educational after a long day of LSAT prep. Little did I know that what started as a hobby would turn out to be the catalyst for my entry into the legal industry.
