An IP lawyer explains what counts as NFT theft when ‘stealing’ is as easy as right-click and save
Amid the booming blockchain space, digital artists have raked in millions of dollars by selling images as NFTs—unique digital tokens that trade on a blockchain and are often bought and sold in the industry’s native currency, Ethereum.
Last year, total NFT sales totaled $25 billion worldwide, according to market tracker DappRadar. The most expensive was a digital artwork produced by Beeple that sold at Christie’s for $69 million in March. But the surge in sales has also sparked a surge in “thefts.”
Detractors of the NFT marketplace often brag about “stealing” NFTs worth millions of dollars by simply right-clicking on the image and saving it. At best, NFT owners call the “right-click savers” annoying. At worst, they call them thieves.
But the legality of copy-and-pasting an NFT is more complicated than that.
Is ‘right-click and saving’ an NFT illegal?
Most NFTs today have low functionality, because there are few platforms where you can really utilize them. The most popular use case for the digital images now is to make them profile pictures on social media, like Twitter. But Twitter has also become a hotbed for NFT “theft,” as users right-click and save NFT profile pictures to use as their own.
“Right-clicking and making a copy without a license to do so is a copyright infringement,” says Adrian Lawrence, head of law firm Baker McKenzie’s Asia Pacific technology, media, and telecommunications group. “Let’s call it a theft.”
In fairness, this “copyright infringement” isn’t theft in the truest sense. An NFT thief is making a copy of an image, but the NFT buyer still owns and has access to the original. In fact, some crypto enthusiasts argue that to right-click and save an NFT is no more theft than taking a photograph of the Mona Lisa would be.
However, if you start using that photo of the Mona Lisa or that copy of an NFT—by setting it as your profile picture, for example—then you enter a legal gray zone.
“Certain uses, particularly noncommercial and not-for-profit uses, won’t necessarily be an infringement…Whereas monetizing [a copied NFT] to put on T-shirts, for example, probably would be,” Lawrence says. But even then, in a legal sense, the victim of the crime often isn’t the owner of the NFT.
Who owns the copyright of an NFT?
What you buy when you purchase an NFT depends entirely on the fine print of the smart contract etched into the digital token. In some cases, an NFT acts as a voucher that can be exchanged for a physical product but usually—in the case of artists producing NFTs of their work—the NFT is simply a receipt linked to a digital image.
“In a standard NFT sale, what you’re really buying is that singular instance of the image, with a certification of the purchase,” Lawrence says. “In most cases, you’re not buying the underlying rights to exploit that work. That copyright will belong to the artist.”
In the real world, ownership of physical art functions much the same way. Last year, some crypto enthusiasts learned that lesson the hard way after spending $3 million on what they thought were the rights to a rare illustrated version of Dune. But, in fact, they had just bought the book. Owning the very expensive book didn’t permit the collective to make and sell derivative products as NFTs, which had been their plan. The book’s author retained those rights.
In much the same way, a person who right-clicks and saves an NFT might be committing copyright infringement, but it is the artist, not the owner of the NFT, who will have to take legal action to stop them.
Who’s responsible for protecting NFT rights?
Sometimes, an artist might be violating a copyright or trademark claim by creating an NFT in the first place. On Thursday, Nike sued secondhand sneaker retailer StockX for trademark violation after the marketplace minted and sold NFTs of Nike footwear without the brand’s permission.
Nike, which plans to launch its own range of NFT footwear, said the StockX sale had “inflated prices” and that the “murky terms of purchase and ownership” had harmed Nike’s business reputation. The Nike suit is just the latest case of legal wrangling over the ownership and fair use of NFTs.
Last November, Miramax sued film director Quentin Tarantino for producing NFTs tied to his 1994 film Pulp Fiction, which Miramax produced. And, last month, luxury brand Hermès sued the artist Mason Rothschild for creating NFTs of the French company’s Birkin bags.
So far, lawsuits over NFTs have targeted individuals who create, or mint, NFTs rather than marketplaces such as OpenSea, where users can create, buy, and sell the digital assets. But as NFTs grow in popularity, those marketplaces will likely need to take responsibility, too.
“There are still some significant legal questions about what responsibility a platform should have for the transactions that it facilitates,” Lawrence says, noting that debate has been raging for 25 years; it started when music labels sued Napster for letting users trade music for free.
Ultimately, courts decided Napster was responsible for policing the content on its platform. NFT marketplaces like OpenSea might soon face that outcome, too.
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