Hello, hello.

Hello, hi everyone. Welcome to the second live session of the NFTs and the Metaverse

course offered by the University of Nicosia in partnership with Punk 6529 and the OM.

I'm George Giaglis and before introducing our topic and our lecturers for today, I'd like

to take a couple of minutes to remind everyone of a few things related to the course logistics.

First of all, as you all know, we are building the OM's Metacampus, so we should soon be

able to migrate most of our future educational activities there. You should be able to see

the Metacampus building site on your right as you look at this screen, so hopefully that

direction. After we finish today's session, I encourage everyone to make the short journey

to the portal to the Metacampus and visit it. You will just be able to see our first construction

there, which is an open amphitheater, where we will probably be meeting for next week's

live session, but over the coming weeks we will be rolling out other places in the campus

as well. So that's number one. Number two, please remember that this is an on-chain course,

so we will be trying to touch upon centralized systems as little as possible. To this end,

most of the educational material for the course will be made accessible to you in the form

of NFTs. Those of you who had minted the course access token by last Friday should have already

received in your course wallet another NFT, this time an ERC 1155 token. Remember the

the discussion we had last week about standards. This token contains all the slides from last

week's presentation. You should be able to view this NFT on marketplaces like OpenSea

or LuxRare, although you may need to try different browsers and settings to get it to work properly

for you. For me, the best experience has been to view it in OpenSea using Firefox as a browser,

as Chrome seems to be blocking its content by default, at least on my Mac. We're working

to make future drops easier to interact with, so if you have any ideas or comments about

that, as always, please drop us a note on Discord or Twitter or in the chat here. Number

three, please note that all material regarding the course will be made available on our GitHub

account, including our live sessions. The live sessions will also be available on YouTube

for those of you that cannot make the live session. Always monitor our Twitter account,

this is the UNIC Metaverse account, for details on how to access this material on more

centralized, let's say, service providers. Number four, don't forget that you can use

the OM chat here to ask any questions you want to the lecturers that relate to today's session.

Starting today, we will also be taking questions from Twitter. Just make sure that you either use

the NFTQnA hashtag when posting your question and or mention the UNIC Metaverse account so

that we can pick the question and feed it to the lecturers. The final thing, please note that in order

to manage the load on OM, we are splitting the class into rooms. Each room will have a maximum

capacity of 500 people. So please note that if you leave and reenter the OM during the live

session, you might find yourself in a different room with different classmates, different chat

history, etc. There's nothing to do on your side. I'm just noting this so that you're not confused

if you find yourself in another classroom suddenly. Also, please note that if you remain inactive for a

period of time, your avatar doesn't move, you don't do anything in the chat or anything, OM will

automatically lock you out of multiplayer mode and you will find yourself alone in the Metaverse

world. So in that case, simply reload the page and re-enter in multiplayer to find your classmates

again. Okay, now on to today's lecture. Today's session is about a very important, I would dare

say fundamental aspect of NFTs and this is copyright, trademarks and licensing. Punk 6529

hinted at the importance of this last week, but today we're going to do a deep dive in the subject

and explore its different dimensions. As the topic is highly specialized, this week I'm going to be

taking a backstage role and I'm going to leave the floor to experts. So today's session will be a

presentation and a live discussion between 6529 and our first guest in this course. So it is a

pleasure and an honor to present to you Ms. Eliana Torres. Let me read this so that I don't make

any mistake. Eliana is an attorney in the intellectual property group at Nixon Peabody LLP,

where she's part of Nixon's blockchain Metaverse and IP teams. She focuses her practice on

technology transactions, copyrights and trademarks, but she's also an avid collector of NFTs,

where she has witnessed the many issues involving IP around them. Prior to joining Nixon,

Eliana practiced as a trademark attorney for the United States Patent and Trademark Office,

so I cannot think of a better person to discuss issues related to copyright in NFTs with 6529

than Eliana. Before giving the floor to her, I would like to give the floor very briefly to

6529 to introduce today's session and then I'm going to leave him and Eliana to drive the discussion.

So the floor is yours. Thank you George and thank you everyone and great to be back here. I just

wanted to note the following. I think copyright and trademark issues are among the most misunderstood

issues in NFTs, so I think this session is very important from a fundamental basis. I also think

it is important to understand that Eliana is a lawyer, but at the end of the session you will

not be a lawyer, so this one session will not substitute for many years of law school and

practicing as a lawyer, so if you are someone who is active in the space, perhaps as a creator or

a licensee or you're planning something significant to do with IP in the space, regardless of what

we cover today, you should hire a relevant lawyer with relevant expertise to help you with whatever

you're going to do. I am not a lawyer, I am a civilian on this topic. I think I know much more

than most civilians and yet if I had a complicated issue of this type, I would also hire a lawyer.

So what I hope we can accomplish today is Eliana will cover some of the basics in the first half

of the session, and then she and I will have a discussion on some of the more juicy spicy issues

that exist right now in NFTs, and then we'll do the normal Q&A at then, so with that I'll hand it

over to Eliana. First of all I want to say thank you for allowing me to be here to 6529 for George,

everyone else that has helped made this happen, it's a historical moment for all of us, and with that

said I think we could get started with our lecture for today, and I think it's important for us to

start with some basics, so if we could get our agenda for today on the next slide please? So this

is where we are, this is our session two, and we'll have an agenda in the next slide. So we'll go

over intellectual property, trademarks, copyrights, the transfer of copyrights, NFT licenses, and then

we'll have the Q&A and conclusions with some further reading and some assignments for you guys.

So starting with intellectual property, which is the next slide, well we already gave this

claimer, so let's make sure that we all remember that, and there we go. So intellectual property,

so I thought it would be useful for us to start with just the basics of what intellectual property

is, and what it encompasses, and the major areas of law that touches on NFTs. So if we have the

next slide we'll have a breakdown of the major, the trifecta of intellectual property laws and

intellectual property in the U.S., so we have the intellectual property definition, which is

basically you have creations of the mind, such as inventions, literary, artistic works, designs,

symbols, names, and images using commerce, and they break down into three major areas. Patent for

the most part is not going to be as relevant today, so I'll leave it aside for the moment, but

basically it's inventions, and you'll have an exclusive right granted for an invention once

you go to the U.S. Patent and Trademark Office, and you'll have to go through this artist's process

to actually get patent rights. At that point you'll be the inventor of that specific patent, but

you will have to go through that process in order for you to secure that right. That one won't be

as relevant today, so we'll focus mostly on copyright and trademarks. So copyrights protect

the original work, and it subsists, so it is basically curated for the time that you put that

in paper or in any kind of medium that is tangible, and you are the author who become the, basically

the owner of this copyright from that moment on. Trademark is an indicator of source, basically,

so you have words, phrases, symbols, signs, or a combination, and they basically distinguish the

source of goods or services, so basically like the Nike switch that you see, you associate that

with the source of being Nike for anything that has that specific symbol. So in the next slide,

we'll start with trademarks. I think the most contentious issues revolve around copyright,

so that trademarks, we could go briefly over what a trademark is and how to acquire this right,

and then we'll go into the more substantive issues of copyright. So starting with trademarks,

in the next slide, we have the definition of a trademark, so you have basically get an exclusive

right to use a mark in connection with some goods or services, and you get to protect that from

infringement on dilution, so from anyone using this mark in association with similar goods or

services. You basically have this right in perpetuity, so as long as you continue to renew it

and continue to use this right in commerce, so in whatever it is that you decide to use in association

with your goods or services, as long as you continue using that in commerce, and you continuously

renew it with the trademark office, if you do have a registration, then that continues to exist.

So basically, you have goods and services that you use, whatever it is you're using,

whether a symbol, marker, or a wording, or a combination in commerce, and that is associated

with specific classes that are considered basically just the categories in which you are using that

mark in association with. That's how the USPTO classifies them in NFTs, and we'll see this later,

the specific guidance as to where you should place these classes or how you should describe

these goods and services according to the USPTO, but I'll go into that in a little bit later. So

the next slide, please. So we have a lot of NFTs projects that have trademarked their names or

their brands or in association to anything that they've created. In 2021, actually, there were

about just a handful of trademarks, maybe 100 or so, and this year, there's been an influx of

trademarks just related to a metaverse NFTs. So we've seen a huge rise in trademark applications

that have been filed for specific classes related to NFTs. These classes, as I mentioned, categories

tend to be class 9 and 42 and some 35. So again, not to confuse you guys, these are just numbers

that kind of indicate some categories basically, and the majority of those are in class 9 because

they are considered by the USPTO as downloadable goods that are associated with an underlying

asset. So you still have to define what that asset is. So similarly, how we have what was

mentioned in the previous class, which you have the token and you purchase a token, not necessarily

one that you buy the token and the asset together, but the token relates or points or links back to

the underlying asset. Similarly, USPTO is using that same kind of definition to categorize this

trademark registrations. So most of them will be in class 9, all of them for the most part. If you

have a known downloadable asset or token that links back to something else, you further define

what that something else is basically, but it will remain in class 9 as a downloadable asset

basically. So Fedenza actually has a trademark for Fidenza. Then you have cryptopunks and a lot

of these are still in the stages of examination. So they'll go through a process of examination

before getting to the registration from right now. There's a backload since we have so many

trademarks for this specific classes of goods, and they are taking about 9 to 10 months to

examine this. So we'll see what happens with this trademark applications. There are not

registrations yet, some of them. Next slide please. So you actually don't need to register your

trademark, but it is highly encouraged. So what that means is once you start using something in

commerce, you basically have a trademark by Commonwealth. So you start using that in commerce,

whatever that is that you use, it is highly recommended for you to have a registration,

and you have to show that you're using that in commerce. And that is to show that consumers

are identifying your product or service with that specific trademark. So the reason why we

normally advise to have a registration is because you get the ability to enforce your trademark

rights, and it is highly advisable just because your rights are limited under common law if you

don't have that registration. And in order for you to bring that lawsuit, you have that registration

and it's kind of proof that you actually have been using that in commerce across the United

States. So having said that, there are some protections that the trademark does not extend to

basically, or they're commonly known as fair use, and they relate to two specific ones. So we have

classic and nominative fair use, and these are basically just acceptance. I don't want to call

it exceptions, but they just, trademark rights would not extend to this basically. So classic fair

use is when someone uses a trademark and is used to describe goods or services. So basically

you're not using it to indicate source for whatever you are selling, but you're only using that other

trademark, someone else's rights to describe your specific goods. So for example, you're using it to

describe a service. So you're using a trademark for, I don't know, Apple to describe that you offer

technical services. And you say, you know, we service computers from Apple to Samsung, you're

not using that to indicate the source of your services and being Apple and Samsung, you're

basically using that to reference to your own services. Similarly, we have nominative use,

and you are using it, there's been some case law around nominative use and how much of it you're

allowed to use someone else's mark in order to describe something else basically. And it could

be really complex, which is why I kind of just want to breeze over it. This is going to come up

mostly in some of the case law that we have right now, or not even precedent yet, but some of the

cases that have been brought in NFT related cases against some infringement that has gone

on in the space. So common situations where you would use how fair use will be news reporting,

commentary, product review, parity, and some comparative advertising. So when you are using

it basically to make fun of or not make fun of it, create some sort of common relief around a

specific issue and you use somebody else's trademark. That's basically what that would

entail, but there's some very specific guidelines as to how you go through the definition of fair

use and where that actually is fair use in relation to all these situations. And hopefully

as not too complex. But next slide, please. So again, this is why I wanted to kind of

leave the fair use arguments for this, and this is because we have some trademark infringement

cases right now. Most of them are surrounding the creation of NFTs that represents some physical

items. So like that's basically Hermes and Mason Rothschild. So in Metaberkin's case,

that we'll come to know. In that case, and I think the majority of us have heard of it,

there was an NFT that was created that resembled the Metaberkin's bags, which are

quite famous and very expensive. And this designation or this NFT basically was quote

unquote commentary on the use of specific, it was a political commentary according to the creator.

However, if he made a significant amount of money, so they had Hermes International soon,

this creator, and we are still waiting for a decision. The last thing we heard was that

an injunction was that a motion to dismiss actually was failed. So it was rejected. So

the loss is going to continue. And I think this case is going to be very important because it's

going to define whether you have, if you have a trademark for a specific good that is physical.

So like the Medaverkin's trade dress and the actual trademark of the Birkin's bags,

whether those are too, you can conflate those basically. So whether you could have an infringement

because someone else is creating that in a digital form in an NFT. So this is going to determine

the extent or the scope of the protection of the current registrations for existing brands.

And then we have the Nike StockX. And this is a little bit different in that,

and I find this one particularly interesting because Nike in StockX are, again,

StockX is a reseller of goods and they are using NFTs in association with the shoes that

they resell. So most of the arguments are kind of surrounding the argument or the analogy that

is a receipt. So you're basically authenticating actual goods that you can then later on redeem

as the shoe themselves or they're associated to the shoes. The shoes are Nike's shoes,

essentially, in StockX because they're reseller. So this one's particularly interesting because

it brings a lot of kind of doctrines that we have not determined whether they're applicable

to the NFT space, such as the first sale doctrine and this first sale doctrine basically,

and I don't want to go into a rabbit hole, but you basically have the ability to sell

something once you purchase it. So once I buy a painting, I have the right to sell that.

And that would be like basically what some of the arguments that they're making in this case,

but these are all trademark related cases that we have yet to resolve. So we'll have the next

slide before I go in the rabbit hole and know the descriptions of the cases. So now we enter

into copyright, and this is particularly applicable to the NFT space. We'll go into the next slide,

please. Copyright creation is basically once you put something in a tangible medium. So if I write

something in a piece of paper and that's already a tangible and there's enough originality,

that's enough for me to have a copyright. And that's differentiated from a copyright,

from a copyright registration. They're separate. So when I say copyright, it's just basically you

own that copyright, that creation that you made. If you go through a registration process, we'll

talk about that later, but it's separate. So you own your copyright, that does not mean you

have a copyright registration. So right now, the laws recently changed from the Copyright Act in

1976. And you have the life of the author plus 70 years is the extent of your copyright. That's

how long it will be protected for. And you get with a copyright, you get a bundle of sticks or a

bundle of rights that we commonly recognize as this six basic rights that you have the right to

reproduce, prepare derivative work, distribute, perform, display, transmit. So with a copyright,

you get the right to kind of control this, this the ability to any of those things and exclude

anyone from doing any of those things. Next slide, please. So now in the reason why I'm going so

fast is because we're going to enter into a really kind of interesting points about all of these

issues. One of the issues in copyright is the originality and the fixation. So these are requirements

for you to have a copyright. The originality is basically a minimum degree of creativity. And

that's argued in not to get very, I guess, into a new nuances of the entity space. But generative

works are arguably all of them have the end of creativity, but someone may argue they do not.

So then we go into the authorship, which is partly the same argument I just made earlier about the

minimum degree of creativity, because if you use an AI system, for example, AI like Dali or any AI

platform or coding or anything else that kind of creates the work for you, you still would need that

level of creativity. And it's a although it's a low standard, you still will be questioned by the

copyright office about how you use the system and whether that is enough to have a, I guess,

personhood or human creativity by the human. Because otherwise, you will not be entitled to

that registration. But the originality comes up often in the infringement cases and that

registration process. So those are the two times that you'll see this coming to question.

And then the last thing we need is the fixation. So you'll have the tangible medium of expression

and whether that's sufficient. And you just need the minimal degree of creativity. Again,

that's kind of reemphasized there. We'll go into the next slide, please. And this is where it gets

fun. You have the human authorship requirement and the definition of author is not in the copyright

act. But they have clearly distinguished and established that you need a human creation

component. And this was established mostly by Supreme Court in this case, where they determined

that human authorship was essential to copyright protection. And then it was reemphasized by the

copyright office in the compendium, where they mentioned that a work must be created by a human

being. And then it was reemphasized in this really fun case where a monkey basically grabbed

someone else's camera and took some selfies. And then the copyright office did not grant

the registration because they said the animal basically was not a human and could not get this

copyright registration. And that is the actual selfie of the monkey. Next one, please.

So by default, the creator owns the copyright at the moment of fixation. Again, this is different

from the registration. And the physical work is not the same thing as ownership in that copyright.

So if I buy a painting by Botero, this Colombian artist, I could get the physical copy, but that

does not mean that I could start then using that same painting to distribute in advertising

or putting in a movie or use it for other purposes that are commercial or even non-commercial. So

unless they're following the fair use. But you purchase this painting, you do not get the copyright

and we'll see how that's similar to NFT space coming up. We'll go into the next slide, please.

Again, this is a kind of expanded definition of the human authorship requirements. Recently,

the copyright board dealt with a case by Dr. Thaler, where he tried to copyright a painting

or a work of art rather, I'm sorry, and he was called the entrance to paradise. And this work of

art was created by a machine that he coded called creative machine. And the problem here was that

he named the author the creative machine. So the author was the AI system itself.

He didn't name himself as the author, he named himself as the owner. So the output of this machine

and the author was the creative machine. So that is when it became an issue for the copyright

office and they decided not to grant this registration. And this was later on appealed and

he still lost it against the board and then he filed lawsuits in DC. And we'll see how that

turns out. But I think for the last we have heard of this is that they're not going to grant

him this registration because you have to have the level of authorship that human being as a creator.

This is different and I want to emphasize this because I have seen this in the space lately

where we read from some articles that there was a copyright registration issued for a comic strip,

I think was a comic strip where the AI machine was used. And that was different because the

author was not named as the AI machine and they copyright office did question the level of

creativity or the level of work from the human. Yeah, you could go to the next one. I think I'm

taking a little long so we'll go really quick on that over the next slide. These are the not

protected things under copyright. Basically you have also fair use similar to to what we mentioned

for trademarks. And if you want to go to the next slide we'll go into this a little bit faster so

we can get to the fun stuff. Ideas, procedures, processes and systems. So basically anything

that's factual it would not be protected on the copyright just doesn't have enough level of creativity

for the most part that there will be one of the questions that you have when determining whether

that is fair use. And then both the main works so disclaiming any kind of works under CCO which

will also will co-relator are also not protected on the copyright once you kind of disclaim those

rights. So basically you give up or you waive all your rights to the creation that you made.

We could go on to the next slide so we'll move a little faster. Again this is a copyright

doctrine of fair use. And it's an affirmative defense and you have this four-part test that

I alluded to earlier. And these are four of the queries that the courts will look at when

determining whether a work was fair use and that should not be protected on the copyright,

therefore potentially no infringement. So they would use this and a case by case determination.

These are not exclusive to or not the spotters that you don't have to have. You could have a

little bit more on one of these factors than the others and the courts are kind of there's no

no bright area. There's no black and white. It's kind of a gray area where they lean on this

four-part test. And normally this is used as an affirmative defense and we could go on to the next

slide. So this part I and I included this slide because I think it's important for us in this

space to understand a little bit of what works for hire are in the copyright context because

a lot of the projects right now that I've seen they contract out the creation of the work. So

they'll have a third party create the art or the music or the video for the NFT projects. So these

are commonly known as works for hire and they come into specific situations. So one would be

as an employee. So you create this work of whatever it is that you created for your employer,

then essentially your employer is the owner and the creator legally the creator of the of the work

and you give up basically your rights to that owner to that employer. And then the second

situation in which this comes about will be in this nine categories and unwriting agreement. So

you have a work for hire agreement basically and you would basically give up their rights

to that creation to the person who hired you. And these are usually commission works. So

one of those works will have to fall into this nine categories. And then if none of these takes

place you would basically enter into an agreement with whoever hired you or whoever you hired and

you will have an assignment. And we'll have a little bit more expanded definitions of what an

assignment is in the next few slides. But for the most part they serve work for hire situations

and they're very two specific situations in which this comes about. We'll have the next slide please.

This is also important in the space because creators often do this the works or do the

creations as joint authors. So as a team and this is basically works that are prepared by

two or more people. So authors, but they have to have that intention that the contributions be

one. So merge into inseparable parts or independent parts. So by unitary whole and the act is very

specific about what a joint work is. They would both have an undivided interest in the entirety

of the copyright and they can exploit the work on a non-exclusive basis without the permission

of the other. So basically they could have that non-exclusive use as long as they take

account of the other person and they give them their fair share of profits if they are exploiting

that. And as long as they don't harm the actual work. This is also important for any creators out

there in the entity space that are creating works with more than one person making sure that you

guys have an agreement in place where this is kind of clear as to what you're allowed and not

allowed to do as a joint author and there's an understanding of what that means. We'll go to

the next slide please. So we'll go into the registration process which I mentioned earlier.

The registration does not affect the nature of your copyright but it does affect your ability

to enforce these rights. Your rights will be limited. You will not be able to bring the federal

court lawsuits unless you have this registration or a registration rejection. So there's also

this is not often mentioned but if you did not get a registration from the copyright office you

could still bring lawsuits and you have to argue that you should have gotten the registration so

as part of there will be part of your argument but for the most part and just to for simplicity

you do need a registration to bring a lawsuit in the federal court system and get to enforce your

rights and that's to stop someone from infringing on your copyright and this is also an example of

what the copyright registration would look like. Fidenza which I mentioned earlier has a trademark

registration but they also have a copyright registration which is really interesting to me.

They have copyright registration on individual fidenzas and I've looked at how many they have.

I don't remember the exact number but they this one's fidenza number 56 they actually number them

and they have individual they didn't copyright them as a collection of works but they copyright

each one of these individually which is very interesting. We'll go into the next slide.

So we'll get into it more of a guess debated discussion of what the transfers

in copyrights entail since they apply pretty heavily to the NFT space. We'll go into the next

slide please. So this is according to section one of the act it transfers an assignment mortgage

exclusive license or any other conveyance of a copyright or any exclusive rights comprised

in a copyright but not including non-exclusive license and I know it sounds like a mouthful

but just to make it into an analogy that's understandable is basically as if I sell you

my house if I sell you my house you have full rights and you have all the rights to that house

and that is different from me giving you a non-exclusive license which is the analogy is I

let you stay at my house and you could use my house for as long as I tell you that you could use

my house and you maybe I could tell you that you can only go in the kitchen or I could you

can only go in the room so I determine what kind of rights I give you with that not non-exclusivity

and by the non-exclusivity part I mean that I could also let my brother come into the house or

someone else come into the house so that's the difference between the full transfer so it does

an assignment and a non-exclusive license. The next slide please. This is more for visual I think

this is pretty kind of a simple way to kind of understand this transfers so you have the copyright

and you transfer all the rights so this is again kind of similar to selling the whole house so I

give you title to all and rights to the entire house I can't just come back to you later and say

you know give me back my house that's basically what this means I have to give you this right in

writing and I have to sign it um then you get all the same rights that you that I would get as if you

were the owner from conception and you then we go into the next one so that's the license and then

oh the previous one sorry yeah we'll go into the next bucket for a previous slide please yeah

so license then we have um the exclusive or the non-exclusive for the exclusive part

it's very similar to an assignment right except you also need it in writing you I will also have

to give these rights to you by signature and I have to sign them away to you and you only get this

rights uh it's an exclusive user so I can't give these rights to anyone else that is different from

a non-exclusive so you wouldn't be special in other words to get these rights to uh in the analogy

to borrow my house or to go into my house and this could be oral or implied also and we'll go into

the definitions of those uh in the next slide now the next slide please thank you um so there's a lot

of issues with the license in the entity space uh because I don't think we have a pretty clear

understanding of what the law is surrounding or surrounding these licenses so exclusive licenses

actually terminate at the earlier of one of those two years so 35 years from a date of publication

or 40 years from the time that you grant these rights um and the time of publication it again this

this may seem like uh it doesn't make it makes no sense but you could have a copyright registration

in unpublished works so um you may be able to have rights that you granted prior to publication

so that's how that would make sense so we also have the non-exclusive licenses so these are also

but you could have it in writing or verbally give these licenses for the most part they're

writing and they have a variety of termination procedures and that will be explained in the

actual licensing and license agreement that you grant and then you have an implied non-exclusive

license that could be terminable at will so whenever the person that granted them decides

and that is there's an exception to this and if you have an implied non-exclusive license

and this comes about in projects where there was no grant or so no mention of what kind of license

you got and you got an implied quote unquote license and um then it could be argued that

you paid consideration that was enough for the license to not be revocable otherwise it would

be revocable so like if you see the terms of use where it says you know this could be revoked

at any time basically that's what that means but for the implied one where there is no writing no

mention of what you actually received when it was just implied based on conduct or you using the

license and them allowing it if you had enough consideration the court will look at this consideration

as enough uh sort of like detrimental reliance so you relied on the what you've been using this

license for and then it becomes irrevocable, so there are some exceptions that I think will be

important to note and and I know it's just kind of a very dense area of law so and I'm probably going

really fast but just important to for us to note that there are exceptions to determination and those

are transfers by will so by uh testament one someone passes away by works for hire the works

made for hire because essentially your the creator is the the creator is not the owner anymore

but the employer or whoever hired at that point he has those right now and then the grants by

other federal laws so for example like you have at a batman that had that was granted a license

to someone else in that batman use so like the actual character also had some trademarks in it

so if there were trademarks embedded into the use of that copyright then you can't terminate

that because then you know what will happen to those trademarks that were also granted under

that specific license so that's when that really often happens and then also under foreign laws

which we will not go into but that's also another exception worth noting and then we'll go into

derivative works and you have the authority to continue using the whatever you created so it

basically works like a layer so anything that you prepare under the grant or so under whatever

license you receive before the termination you continue to utilize that so like the layer so

like once you have that whatever you built upon it you can continue to use after the termination

but it doesn't extend to any rights after the termination so you cannot continue to continue

to create more works based on the first layer that you initially received once it is terminated

we'll go into the next slide please then we get to the uh the fund part and this is the

NFT licenses and i think for this part point 65 tonight it's going to join me because i think

we'll get into more of the very uh dicey discussions in this area

so we could go into the next slide all right hello hello hello could you hear me

okay loud and clear well first of all thank you so much for that i know for everyone this was

probably a lot to absorb if this is not something that you've thought about in detail before in

fact even for me when i was looking at the materials and i think i know a decent amount

about this topic there were things i had to ask clarifying questions uh i had to read the slides

a few times the good thing is the slides are going to be available uh we will be available

in the chat we'll be available on Twitter and so we'll be able to follow up on these things

i would also say i think we're just going to have to run over of the one hour i mean i don't

think we'll be done in the next 15 minutes we're just getting to the juicy parts i hope all of

you can stay if you can't it's okay it'll be recorded you can watch the rest of it later

but i don't want to cut it short because i think we have a lot of fun things to discuss

let me put some things in my words from a more NFT perspective

and only if i get anything wrong you should interrupt me and then we'll see where the

really pressure points are i think this is a good slide here this slide 29 and on the slide

that we're on let's go back the base model when you buy an nft is exactly the same as if you buy

a traditional piece of art and i see this being an area of endless confusion particularly by

non-NFT people right like they say oh well what rights do you have or your rights are unclear

or here are all these like extremely nuanced topics about what rights you might have to the IP

but of course off-chain pre-NFTs your default expectation if you bought a painting if you

bought a book if you bought a cd if you bought a movie if you bought any piece of art or medium

the default expectation is that you get no rights whatsoever you have a right to personal use

the copyright stays with the owner so if you know i famously bought an Andy Warhol tomato soup can

does not mean i am now the copyright owner of Andy Warhol soup cans and i'm going to make

t-shirts and pillows and posters the Andy Warhol estate owns the copyrights there you know if

you bought a Harry Potter book it does not mean you now own the Harry Potter franchise right you

have a license you can read it yourself and most NFTs in the generative art world in the one of one

world are sold under this model right your default expectation is if you have not heard otherwise

if there's not been something communicated otherwise if there's not terms and conditions

otherwise what you should expect you have is the right to that particular instance for your personal

use but no the IP of the creator has not been transferred to you so your default is exactly

the same and all of the interesting topics all of the ones where i think people are confused and

we're leaving seeing some challenging legal issues as the law is not yet adapted to an on-chain world

is where nft creators have tried to give more rights right things that you wouldn't actually

typically see off-chain and let's take a look at some of those let's go to the next page

oh yeah i guess i should address this before we get to that you know i think related to this

and i've spent a lot of time with this oddly i've spent time on this topic even with people

who are crypto native and they say well i mean sure you have the token but the jpeg as we saw

last week might be on ipfs or our Arwave on a server and i can download it all by myself

and of course the correct answer this is so what you can download i can go download the google logo

all by myself i can right click save as the google logo and then the google logo is on my desktop

and that means quite literally absolutely nothing right it does not make me the owner of the google

logo it does not make me the owner of google uh Larry and Sergi are not trembling in their seats

that i've right click saved their logo it means absolutely nothing right and this is the correct

the actual practical correct analysis so i could say why does it doesn't mean anything i mean

strictly speaking if i started using the google logo i'm probably violating someone's copy right

so strictly speaking i might be breaking the law right but even that practically speaking it just

doesn't matter and in an on-chain world where you know this was very common last year people would

download punk 6529 and tweet at me and say i have punk 6529 now okay that's great i mean the tokens

in my wallet you have a jpeg um it's clear who owns punk 6529 and if there's any doubt about this

try and sell the jpeg right the market value for the right click saved as jpeg is zero so

i want to address and i'm guessing half the audience three quarters of the audience

has already passed us but we might have some new people in the audience new people to nfts

it's a common stumbling block to people new in the space but it truly genuinely in my opinion

and ellie if you have a different view we share it i just think it means literally absolutely

nothing it's a non-issue agreed yeah okay let me skip this because it's

actually fairly technical and we can come back and discuss this if we need to keep going

okay let me let's talk about the punks because i think this is super super interesting and

let's think about the two main frameworks that are might be different than the traditional

framework are where people are trying to grant commercial rights along with the token

or where people are saying we're putting the work in the public domain quote unquote cc0

we'll come to that in the next section let's talk about commercial rights because in some ways

this is the one that's most legally complicated you know the traditional model is not legally

complicated the public domain model is actually not legally complicated it's well understood

it's the licensing model that is legally complicated and the reason we have the

crypto punks license here is that over the commercial licensing licenses i think it's

the most well thought out it's the most complete uh you go clearly put a lot of work into it is

certainly much more thought out than the board apes license and the mutant apes license which

you know board apes license a couple paragraphs long and it's not totally clear what it's trying

to say whereas the crypto punks license is clear what it says is if you have a crypto punks token

you can commercially exploit your punk not of course anyone else's punk not any of the

underlying elements in your punk right my punk has a hoodie i can't take a punk-style hoodie

and exploit that individually i have to exploit punk 6529 specifically you can create derivative

works you can have sub licensees you can even apply for a trademark for your punk not of course

you can't use the general Yuga trademarks for crypto punks so it is as permissive as you can get

for the actual owner of the token let's say that's bucket one bucket two there's been some thought

into what happens if you sell the token further and what they say is if you've sub licensed

or you've made derivatives and then you sell the token to the next person everything that you have

done today holds but you can't do new things right so let's say i've made 10 000 little 6529 punks

and then i sell my punk to Ellie i can still like sell off my inventory of little 6529 punks but i

can't make a new derivative there's also some uh well let me stop there this is all this is to

me all of the good news right now there's a couple of bad news from the perspective of

you're fully crypto native you want to live on a blockchain right you know what's what's the bad

news well the bad news here and i understand why it's there is since it's a license since you have

an ongoing relationship with Yuga you see yuga like any kind of normal big American company

then puts things in there like but we can terminate the license or you're not allowed to do certain

things hate speech or trading with sanctioned entities or what have you say well why would you

want to do anyway noone's going to do that deliberately right and into some level i believe

it's Yuga covering their butts because you know they they don't want to indirectly be in business

with a sanctioned entity but it's also moving a variety of obligations on a token holder

but they don't have in if you own a bitcoin or an ether right it's not your bitcoin or ether can't

be taken away if you use bitcoin to engage in speech that is not permissible in your country

right but theoretically your license to your punk could be uh theoretically and it's different than

you know certain applications that use bitcoin or ether have been sanctioned like tornado cash

right but the protocol itself is not really sanctioned here if the protocol is the token it is

is through the license there is a counterparty risk a centralization risk right that's i would say

that's bucket one bucket two which i get i understand why it's there the license has a

general term there says it can be changed i know why it's there because it's a brand new space

and the laws might change and they might need to adapt the license to new laws so it's a sensible

and logical thing to do and i have every view that Yuga has good faith here and their general

model is to assign the commercial rights to the users but strictly speaking the license

doesn't can change to mark change and say something different than what it says there and then the

third thing that this was something i learned through the preparation of this of this session

and this i want to ask Ellie if i understood it right i might have gotten it wrong in which case

it'll be good to be corrected i had previously known to transferring a copyright

required a written agreement and there's a whole bunch of consternation of if a

you know on-chain transaction is a written agreement right of course as an intestine it's

probably not um but then what i saw is that an exclusive license also requires a written agreement

to be transferred and i think this license is primarily an exclusive license as it relates

to 6529 it's not no it's it's non-exclusive it it will be a non-exclusive license

why would that be so do you want to go back to the i think they do mention that at some point

in the terms that it's a non-exclusive worldwide license it's not exclusive um otherwise it would

literally say it this is an exclusive license so basically just one part you as a person would

get it and if i'm not mistaken i know we had one side where you had like the full terms

but it says it's a non-exclusive um license but that one yeah it would have to be in writing as well

and i guess going back to your point i this has not been tested in court yet but there are some

arguments that you can make that some licenses maybe when you guys intentionally say that you

know i give you all rights i give you a commercial rights but then it gives you all this other kind

of like as long as you buy to this and kind of alludes to a it is a license instead of just an

assignment on rights um and it hasn't been tested in court whether you just transferring the token

itself in connection to this license it's it's enough to have a cryptographic signature that

is in writing enough for you to have agreed upon this but again none of this has been tested in

this kind of it's it's a second issue that will deal with the subsequent buyer with that

even that license the initial license is even enforceable against the the next buyer the

so person a and person b so whether you could enforce that gets the person b but going back

to your point yeah i think that um it is a non-exclusive license and so i i pulled it up it's

actually very funny so they say it's exclusive and they also say this is the funny part is

universe wide i don't know how that jurisdiction works universe wide so it says yeah an exclusive

universe wide royalty free something some license of a license to reproduce a shipment

prepared derivative works publicly display publicly perform transmit and otherwise exploit

your cryptopunk art is that the most reason one the previous one may have uh i know that they have

for example like not you got that state non-exclusive in this one i don't know if you

i'll pull it up too i know we have the link there but if it's exclusive it has to be writing so um

that would imply that you had that this will be sufficient enough and normally you have like to

ascend something so like you have to click that you do agree to this right um that was sufficient

writing um but that would imply that during the minting process you would have had to agree

and then this goes back to many issues that have not been tested because this this was uh again this

was amended so we don't even know if this could be enforceable or there could be an argument that

it's not enforceable against it the people who bought in post amendments so this has not been

tested yet in court there's no precedent for this one yet right so and i think this goes to a very

interesting point like regardless of what it specifically says right and the Bored Apes

license for sure was trying to transfer the copy copyright right and here are things as far as i

can tell have not been tested or it's unclear. Number one) if you are a secondary buyer which could be on

a normal marketplace or an exchange or in some type of smart contract or even peer to peer

are you bound by the license and how right and you've never actually accepted that license

that's number one. Number two) if someone is trying to transfer copyright or an exclusive license

even if you have a terms and conditions at the bottom does this qualify as a written agreement

Number three) the marketplace terms the support i wanted to skip over before because i think it's very

complicated the marketplace terms tend to be generic right so most of the volume happens in

open sea right on open not for punks but for everything else open sea has fairly generic

terms it does not pass through the terms of every single collection and so to the degree you're

click accepting something an open sea you're accepting the generic open sea terms not the

collection specific terms and so arguably all of this stuff is open to interpretation challenge

or it applies in the first place right and i think some of the people who are negative on this are

like well it's it's bad but i'll give you my counter argument here and this is again i'd love

your view on this and one is a practical one one another one is a future one a practical one

let's say it doesn't apply right but Yuga intends genuinely i'm a hundred percent

certain of this it wants its community to do projects with their IP that's the whole point

of things right they're trying to get 10 000 people working to promote the collection as

opposed to just a centralized team so to the degree that the buyer more or less acts like its

applies and the seller or the issuer acts like it supplies doesn't matter i mean like if who's going to

who if generally your concern would be as a buyer of one of these things that the issuer

will enforce against you so i don't want you using your punk this way right i don't want you

making pillows pillowcases with your punk but yuga very clearly does want you to make pillowcases

with your punk or beer with your punk or coffee brands with your punk that's exactly what they

want you to do right and so since they want you to do it where would the practical risks come

that's that's question one and then question two is maybe what will happen is in time and

i don't think it's imminent but maybe in the next three to five years we will have legislation

to cover topics like this and the analogy that comes to mind for me is there used to be this

debate in the 90s about electronic transactions and how can electronic transactions ever be valid

because you have to sign with a pen and you can't sign with a pen on the internet right there's a

lot of things that used to say you have to sign with a pen and then i think it was in 1996 the

united states passed the e-signature act and the e-signature act in one stroke said well all those

electronic transactions are fine they count exactly as much as if they were signed with a pen

and this enabled a whole swath of e-commerce to come to life and you know this has been absolutely

fine that's why we have e-commerce today and then i so i wondered even if there are issues

now in this kind of teething period if eventually you know the legislation will change it was

interesting that copyright office decision on the ai art you could tell they were uncomfortable

with the decision they were making right they were just saying look we don't have the right

to assign copyright to an ai this is congress's job to fix right like if like if congress wants

to do this they should fix it and then we're happy to do it you could tell them they didn't feel

comfortable saying all this work's not copyrightable we have to follow the letter of the law and the

letter of the law says there needs to be human and if they want to cover you know human slash machine

partnerships they should change the law and so what are your views on this like what's the practical

risk today that even if this license is not a hundred percent correct enforceable etc what

practical risk might a punk holder a board abe holder have and you know can you imagine the

law changing in the future so i think that these are all unaddressed questions that i don't know

that i don't know anyone that have the answers to i think the most important thing to know is that

because this is so new I think that legally we need some changes but i also think

technologically we need some changes and i say that because if you were able to transfer the token

with a license that was available and that required someone to accept the license upon

each transfer and this was abided by all platforms we would solve a lot of issues with that because

then people would have the privity of contract with each one each transaction so i think that

is not just legal but also technologically we need to mature and as far as risk goes i i think

until we see some more kind of issues with this space we we don't know i would say this is a

litigious question as far as who would want to bring any sort of issues regarding this licenses

and their enforceability that would be the risk is is why would anyone want to contest this and

again i think most of the issues that i have in this space is not just legal questions

but that technological feature and then some of the misunderstandings as far as the amendment

goes so like what how do we know which license applies if this is amendable at any point so

like let's say that they're amended multiple times they say let's say Yuga lab decides to amend it

three four five times upon this and in the next five years so then at what point do we know which

license apply to whom and was there any privity of contract to say okay this license number three

apply to buyer five or buyer six or buyer six hundred um so yeah i would say um that technologically

we could fix this and then uh the law would definitely have to evolve with that technology

amazing i i guess well they'll have to update the license on-chain so then you can see

which license applies to which to which to which user right yeah i mean yeah and and i think that

technologically we could solve a lot of things and if we if we if only the platforms would kind of

like uh accept some of the smart contracts i know some some companies that are like trying to or

some platforms that are trying to kind of have this where like you upon each transfer you're

gonna have to click yes and be able to like read it so kind of like when we go on websites right now

and accept the terms of use um so each buyer will have an actual understanding what they're

purchasing and whether there's any encumbrances or liens or any sub-licensed um rights that have

been passed to a different person i think that technologically we could solve the legal

issues too. Oh I love what you were just describing i mean this would let me put it back in my

words that technologically we could bring the terms and conditions and the sub-licenses and

changes of these and things that were created under the sub-licenses and so on-chain and at

that point you can contract around the number one but it only gets me excited and you can

programmatically access them right and because right now i do feel this all the commercial

rights type projects do have a foot in both worlds right you have this global instant

digitally native permissionless token flying around everywhere and then for it to work this contract

that literally on the cryptopunks site is a pdf right and so you're saying maybe we can develop

better technology to bring the pdf side into the programmatic side i think so because right now we

have three three kind of different layers and it's kind of like a sandwich where like you have like

and it should not be it should not be for the legal perspective so like you're basically saying

i sell you this house but someone else is hosting whatever rights i have and and that that's some

that's somewhere else is normally like an aws or at the best an ipfs that holds those rights

which is the terms of use that i'm mentioning so that should not live separate from the token

and and if those were hand in hand together just like even we had just two layers where like the

token itself has the rights but also the metadata was i think again i think the technology is to

mature so that people could really readily like read that and be able to understand it because

right now who's going to go into the ether scan and go through the metadata and and click on links

or be able to know where to go in the metadata to click on the link that kind of takes you to the

to the terms of use like it's a lot of steps that i don't think people are going to if a judge saw it

they may see you know there was no actual understanding or knowledge or a sense um through

the terms of use because nobody's going to go through this metadata process

that makes perfect sense okay let's go to cc0 and public domain let's skip forward a few slides

and go to the next slide actually okay my sense of where we have ended up today in

so-called cc0 so creative commons zero which is a form of license that tries as much as possible

to put the copyrights in the public domain and the reason i say as much as possible in some

countries there are certain rights that you cannot put in the public domain if you want to but

for an american person i think you can generally you can put all your rights in the public domain

i believe it's an alternative way to solve some of the issues we just spoke about i think that's

how people are thinking of them let me give you my sense so because i've spoken to a lot of the

folks who have done this right and their assessment of the solution is not, okay we have to agree on

a standardized format for legal contracts in terms and conditions and we'll bring them on

chains to coordinate all the exchanges and do all these things their view is all different they say

okay well that sounds like an awful lot of work let's take a completely different approach first

of all let's take the approach that encourages maximum virality right the attention drives

everything online and if it is the case that having 10 000 people working on your further

developing your ip is better than having the 10 people in your marketing team working on your ip

well it's even better to let the 2.3 billion people online further develop your ip and your ip

will become more famous and important to get more attention if anyone can work on it so

that's one theory i think the second theory is even if someone let's say you 6529 have the

rights to punk 6529 and let's say you had a kind of strict view of how only you wanted to

to develop it and if someone else started doing things with your punk you should chase them around

and legally i think part of saying like look this is chasing people around legally online

in 99.999 of cases it's not worth the effort anyway right like i mean it's people copy things all the

time online and mostly you don't bother chasing them around and say like look it's it's effectively

it might be legally enforceable but it might be practically not hugely enforceable so i

don't want to have to even think about that let's say point number two point number three of

this this was x copies point that any version of trying to do it through a licensing agreement

is going to lead to centralization there is always going to be a counterparty the counterparty is

always going to want things like oh i need the right to change this agreement for logical reasons

the laws might change and they might be required to change the agreement but nonetheless it's never

the content the art is never really free because there's always a counterparty and a counterparty

that in some ways has more power than you do right like that they can change the contract you can't

right and so and then the biggest all these issues on is it enforceable is it not enforceable is it

written transfer did it happen through an exchange did not happen through an exchange was it on mint

which version applies take all away right you don't have to think about it's a huge simplification

you don't have to worry about them at all right there's who can i own some public domain pfp some

mfers for example and i don't have to think about these issues at all because it's clear who can

use that art anyone right absolutely anyone the product of user i can also use it but so can anyone

else so it simplifies and then i think what underlies all this all of this is the idea

that i'm stealing now from punk 4156 and i think in a few days we'll have him on here on the

course and so we'll really dig into this then he said something a long time ago that i found very

interesting was the right mental model here is provenance not copyright and how i understood it

is the following pre nfts let's say you had a really nice image and then it starts getting

copied which happens all the time right you see an example here with cats some art happens all the

time someone posts a beautiful photo on Instagram and then like 5 000 people copyright they posted

themselves they don't attribute it and now you don't know which one's the original because

everyone's supposed to get everywhere this doesn't really apply in NFTs right like the

provenance of who actually minted it who owns it who the artist said owns it what who the artist

recognizes as the owner it's super clear it's the person with the token to the degree that there's

a person with a token then everyone else that's running around with the art is in a way some

form of right click saving us right now or to think of it a more positive light is driving value back

to the token holder right they're creating attention but they're still only one original yes

they can use it but there's only one original now here we're in completely simultaneously

completely untested waters and extremely tested waters why do i say extremely tested waters

the vast you open an art history book the vast majority of art in an art history book anything

before 1924 is that the right state is in the public domain so it's not like this is something

brand new to the world you know any Van Gogh is in the public domain right uh books from the 18th

century in the public domain all these things are in the public domain right Romeo and Juliet are in

the public domain right they've been in the public domain for a long time now and so what an artist

or creator is doing is accelerating that process and we're not going to wait until my death plus

x years we're going to put in the public domain now this is what i'm going to respect as the

originals and then the global culture can remix this uh together and so it strikes me and i'm going to

ask a narrow question that will go to the economic question from a legal perspective this one seems

straightforward right like there's not a ton of outstanding issues if let's say i'm an American

i create a piece of art i put it in the public domain are there any ambiguities can we just go

ahead and treat it as such i wouldn't say there's ambiguities i would just say there's lack of

control for the creators so like let's say that um there's you have that cco like copyright uh or

lack of copyright rather image and then someone starts using it with the regulatory political

campaigns then there will be no control over you kind of having any say to prevent any of those

associations from happening um that will be the only kind of negative that i would say um but i do

i do understand the moombas kind of uh did this and i think that they have other issues other than

they just issuing this i think they should have done this for the beginning without the intent

but um i think the that would be um it's easier to manage you they wouldn't have to kind of legally

enforce any rights uh for on behalf of any holders either so financially and legally it would make

sense for them to do that but they only again they only get negative to it is the lack of control

or associations that you may not want with your art so that would be the negative thing i would say

about that sure right but legally it's clear right it might operationally have the outside

it's clear all right let's let's see the next few slides

yeah so this is this is where i think we are today in pfp projects my sense is in pfp projects

the whole quote unquote game now is being played between commercial licenses and cco licenses

is releasing a pfp project today and saying you just have a personal use license only

is probably now market uncompetitive right and for pfp projects which are different than

art oriented NFTs i think what we'll play out here and i don't know the answer to this right

and we're going to just have to wait and see which of the following two factors is going to

end up being more powerful the case for commercial licenses is if i know i have the exclusive license

for that board eight that's one of my Bored Apes i might be willing to invest in it because i know

i can monetize it if i invest it and if i knew that even if i invested it you could just take it

and use it yourself they may be less willing to invest it right that's the case for commercial

rights the again the economic human behavior case let's say and on the public domain side the flip

side will be like well sure that everything you said is true but in practice most people won't

manage to do very much with these things themselves and when you enable the whole world

to help you you'll actually get further i another way of saying it is

is i think the public domain folks will say yes you'll get a smaller percentage of a much bigger

pie right the value that's going to somehow accrue to you the token holder in sort of ambiguous

ways today right it's not totally clear that like let's say you le take my cryptotodes and make a

super successful clothing line with it you don't owe me anything right you could make lots of money

with it and i'll be like oh yes but i'm gaining influence and attention on the original but

i mean it's unclear if that actually ever converts back to money to me that's the question but

conceptually i think it's this they're saying the pie is going to be bigger

your take rate of the pie is going to be smaller but somehow it's going to be more

than on the other one that most people on most days are not actually going to

successfully manage to monetize a PFPs anyway so my sense it's an economic sense not a legal sense

is this is where we are in PFPs and now a collection comes out you can't do anything

you have to wait for the centralized company to do all the work of promoting it driving

attention etc i think is going to be uncompetitive for a new pfp collection now if marvel comes and

sells you PFPs right and spider-man and four and what have you that might be different right because

those are while established brands are ready but for a new brand that needs to be established my

guess is is when we're in the latter two categories now any thoughts there are we on yeah can i add

something yeah just I see one of the issues that i would see in that in that model is that

let's say you have something on the public domain like uh you know i don't know maybe a member and

someone else starts using it who's not the token holder and then they end up making it into a really

large brand to a point that it becomes a using in commerce that could be trademarked and then they

later on trademark that specific Moonbird as their trademark and then you still have that token so

like and again this is on the waters but wouldn't what would be your opinion as to someone else kind

of monetizing that potentially for in perpetuity until they choose not to and there's really no

what will be the value for the holder at that point if any at all when someone else is kind

of claiming cop trademark not copyright but trademark rights or that Moonbird that was initially

in this in the public domain that that would be a concern of mine but what would you do in that

case now i think that's a very interesting topic i think these topics you know you've seen this with

some open source projects where the project itself is released under an MIT license or something

but the trademark is still centrally held right where and there's some type of process for

applying to use the trademark i think is a complicated one and it's a very good point

i don't think there's a straightforward answer. yeah those are one of the issues i see. yeah

all right let's see two more examples and i think then we can go to questions and i'm seeing a ton

of questions coming through the chat we need to give people a chance to get their questions answered

so in the one of one world this photo here from Gatsomart was i think the most seminal part of

thinking about cc0 in the one of one world it's a great story she was an established

photographer pre-nfts and this was one of her most famous images and it was constantly stolen

right she'd see it on travel blogs and Instagram accounts and people used them on their advertisements

never credited her never paid her and this is nothing new than fts right in the off-chain world

and then she said well let me take a different approach and said well i'm going to auction it

off and i think she had a reserve price of a hundred or something and as soon as it's bought

it's going to convert to a public domain license now not strictly speaking of cc0 in her case

she kept some provisions on hate speech i think and acceptable use in her license but effectively

a public domain license and G-money was a big collector bought it and this was a very um interesting

event because i suspect she monetized this piece more without underneath and her whole prior off-chain

history of that piece and now it is of course continued to be used by many other people and

but now she feels okay about it because she might not and i think she money feels okay about it

because it becomes a very it's become a very well-known piece of photography because a lot of

people now make derivatives of it and it was interesting because somehow and i'm not saying

this applies to most people in most photography right doesn't mean that if you put your image in

the public domain you're going to get a hundred each that supply and demand doesn't work that way

but if you're a famous photographer and have a famous image it didn't work out this way and i

thought this was a very interesting and creative approach indifferent than the type of dynamics

that exist in pfps right nothing about this was G-money paid a hundred each because he wants to

make t-shirts with this picture he wants this picture from an art perspective in the same way

that he would buy any other one of one piece but believes that the whole overall system around

this photograph is going to drive attention over time and therefore value so i thought this was

very interesting a semi-controversial last fall 2021 and i think now it's been established

that like you know some photographers release some pieces of the public domain and i'm not saying

it's right or wrong it's just a tool right most release them not under a cc0 license and that's

fine but i think it is a tool that artists have that they can think about and use creatively right

and not just in a PFP context and let's see one more slide on this which is x copy. The x copy is

very interesting because he is not just a leading crypto artist he's on most metrics among the very

very top right and when he started and how many pieces of work he's made and what the prices of

his art he's on a quantitative basis at the very very top i think he's amazing but that's just a

personal view i say quantitative he's at the very very top and he has a large collection of work

and then one day the summer he put all of it in the public domain and what's very interesting and

this has to do with how crypto native he is and therefore also how crypto native his collectors

are nobody complained and it's very interesting because this is different than the moon bird's

discussion right moon bird said i'm going to give you commercial rights and then change

which they're mine and said i actually want to put in the public domain and some people got

annoyed but i understand that right because if you bought it because i want to have commercial

rights and now i don't have commercial rights with x copy you never had any rights right you had a

purse it was just normal art so you just had a personal license to use it you know i own summer

dot jpeg but i couldn't do anything with summer dot jpeg i just could look at it really nice to

look at and then the rights were still an x copy and he said okay well i don't want to hold them

anymore i'm going to give them to the world at large interestingly i think the vast majority

of his collectors you're just positive not a negative right now i see derivatives of summer

dot jpeg everywhere and i think it's great and i appreciate the point that you say well what

if people use it i mean what people say online is well what if Nazis' start using your art right

like it's very common thing and i appreciate that in the fullness of time this will happen to some

person and some collector and some artist but on the whole the kind of my first reaction to it you

know most of human art histories in the public domain and nazis aren't going around using like

Renoir's and Van Gogh's and Jane Austen i mean i don't think of nazis as being that art oriented

to be totally honest they seem to be more busy doing more obnoxious things than like making

derivatives of important art right so it's an issue but historically when we have data on what

happens when art is in the public domain and how many times it's used for evil and you know generally

the answer is it's not right it has not typically happened with historical art and so i thought these

were interesting in that it's a very different discussion than the pfp licensing discussion

where the PFP license of discussion is realistically mostly not about the art right nobody's buying

most PFP collections because they think oh it's grail art they're buying the collections because

they believe or hope a community can emerge around them and drive value and so in that context the

licensing discussion is very tactically driven to what's going to encourage people to invest in

the pieces whereas what we saw with kath and what we're seeing here with x copy is yes also cc0 but

i think cc0 with a different mental model and framework any thoughts on this no I mean i like

his art too so okay well with that we ran i think i don't i don't want to say we ran over we did an

hour and a half and i think that that's what we needed to do this presentation if we had tried

to do it an hour i don't think we could have done it so my suggestion is to be i have on my screen

open the questions so i'm going to read the questions and i'm going to let you answer them

because we have an expert from the uspto here i mean we need to take advantage of this

i love this one this is great how can fedenza be trademarked when there is a town in a really

called Fidenza how does the law work in that case um yeah so that's a great question so it would have

to be geographically descriptive and because there's likely no connection or nexus for the

actual trademark person or Tyler Hobss in this case um with the actual Fidenza in Italy it would

not be descriptive of that specific place so there will have to be a nexus and evidence that

the trademark is being used geographically descriptive in a geographically descriptive

manner that the standard used so Fedenza so it's basically it's similar to kind of

uh trademarking like a town that's very rural and remote for um computers what would be the nexus

there so similarly that's that the way the trademark office would kind of read that um and

they will have to find evidence that is geographically descriptive in that sense so this comes down

to the issue of classes right you don't just get a trademark for everything you have to get a

trademark for something specific and Fidenza the town is probably not making an if generative art

NFTs and so there's no overlap there right is that yeah what do you think about it I think they

yeah but they're also the easiest way to kind of understand trademarks is the likelihood of

confusion and that's kind of what trademark says is to prevent consumer confusion in the

marketplace in the in commerce so um someone basically the easiest way to understand is

if you see Fidenza an NFT are you going to associate Fidenza the town in italy or are you

going to just refer okay if somebody tells you hey did you buy that Fidenza you're not gonna

associate it with that italy town you're gonna associate it with the NFT art right so that's

that's the indicator kind of purpose of of trademarks and that wouldn't be geographically

descriptive in that sense so it just is intended to prevent the consumer confusion and I don't know

that Fedenza as the town will create any kind of like confusion and the consumers find that it's

related to the actual town in Italy yep makes perfect sense okay next question how just would

like to confirm that AI works at the moment are not protected under copyright law so no it's not

tough it's just there's it's linguistic it's so basically creating a work of art with AI

and you name the author the AI system so the author is not you as a human

inputting some code some kind of basic layers into the system or a blender and then the output

is you the owner but you're naming the author the actual machine that created this work so

that's different than saying I used photoshop or I used blender or dally to create this specific

work of art so during the examination process to get a registration and we've seen this being

posted on Twitter lately they are they ask you questions they're going to ask you how did you

use the system what did you input into the system and that's how you're going to determine this was

mostly in again there's no clear line as to what they're using to determine what enough

input for my human being is as opposed to just machine made um so that that's the difference

is I'm naming the author the machine as opposed to naming me as the author in the creation output

and it's me owning that output um ownership that that was created with the machine does that make

sense I hope that that's clear it's it could be confusing. Right my takeaway is how you presented

might also make a difference right if you go like that case that you mentioned say hey the AI did it

registered on the AI you're gonna get a no right if you're gonna say yeah I did this but I used some

tools to help me you might get a yes is that accurate yes yeah it does but it'll in in that

process they're going to ask you how much of you how much input from the human being was there

basically in using that that that machine but yes essentially that's how you present it it's going

to make a difference and that there was an article recently on the uh I think it was a comic

strip or a comic book that received a registration using a specific AI system they named themselves

the human being as the author but they also specified they use midnight uh journey as the

system that they utilize and during the process of dissemination they probably were asked how

much input they put into into midnight in order to receive that output so that's how

they receive that cover registration. Got it okay. Next question are all these topics considered

similar across all jurisdictions do we need to register a trademark across all jurisdictions

so when you have a for trademarks you will get a federal registration so that federal

registration is basically saying you you have users in commerce across the state

and um that gives you like a federal kind of protection and you don't have to register in a

specific jurisdiction so like a state if that I'm not sure if they're asking international or

national so within the US but within the US you could register it you know with each state but

that's only going to protect you geographically in that area that that geographic area that you're

kind of uh trademarking it so if I were to register in Florida for example you know that

will give me protection in Florida and that would be with a trademark office in the floor

like they each state has its own trademark process but if you file with the USPTO then

you're getting a federal registration and that will give you a nationwide protection

and if you wanted international protection though you'd have to file in other countries too right

you yeah and there's also a system called the Madrid system that allows you to apply it's to

have one one specific application that allows you to have protection different jurisdictions

it's a little bit of a complex system so I won't get into details but you would basically it would

be more financially easier to go through that process than having to go through each country

because then you'll have to have an attorney in most countries and the USPTO requires that um

you know if you're applying from abroad that you have representation in the US.

okay this is the part I think you're saying this is where you get a lawyer

I have to explain all these things to you yeah it could be it could be complex it could be complex

okay the question says the last week 65 tonight mentioned that most NFTs are not unblocked chains

they're simple pointers what I what I think this question is most of the art is not on chain it's

on ipfs or our wave our server does this create any fragility from a legal point of view um I think

two things uh first I think we have AWS holds the terms of use I think there's more fragility

in that sense because you're basically letting a third party host whatever rights you get in that

token in a third party website in the best case scenario they'll have that also in ipfs but um

fragility from a legal standpoint no I think more from a technical standpoint I think that you

the blockchain is always going to dictate you know who's has ownership but the pointers whether

that pointer works or not I think it's just more creates more of a centralization because someone's

going to have to pay for that ipfs so if we're kind of to if we want to emphasize or kind of push

towards that decentralization you're kind of going against the grain if you have someone

having to pay for that ipfs to continue hosting that so I think that's why some NFT projects

are moving towards having on chain art and moving the arts on chain so that there's no actual

fragility in that sense and our way was a little bit better you pay upfront rather than

continuously having to pay that's a simple way to describe it but from a copyright perspective

it shouldn't make a difference right like where it's hosted no not really it no

it's kind of like when you buy a painting and you keep it in a museum you know it just depends

on which museum you choose and just if you still own the copyright regardless of where

that that's sitting okay that makes sense this one I'm going to take it says have I deemed

my cryptopunk 6529 is cc0 and the answer is of course no because the further answer is

I'm not allowed to that's not my decision to make that's a decision that Yuga Labs was to have to make

if they were ever to make that decision I don't think they will but like in any case

they would be the ones to make that decision I am in effect a licensee of Yuga Labs as it relates

to 6529 there's a license agreement that I have to follow what we mentioned earlier

and that license agreement wouldn't allow me to on behalf of you to declare that my

punk is now in the public domain right that's a you get a decision not a me decision this is

correct is this correct yeah and the way the easiest way to understand is you can give what you

didn't get yourself so you can give more than you received so you receive an exclusive license you

can give an assignment at that point so you can it's kind of like a funnel you can give more than

you received okay here is a semi-technical question I think I don't think it's hard but let me see

is there ever only one copy of artwork associated with NFT an example they use is IPFS that multiple

copies may exist on each computer that's pinning it which one's the true version and does that even

matter in any way no it doesn't matter and the way I see it is when the creator and I'm going to

give an example so let's say you hire someone to make a piece of art for you the moment they created

that piece of art and put it in tangible form that's the that's the original basically so anything

else and again this is untested water so this is just an opinion it will be in maybe some different

practitioners thing differently but once you put an IPFS that's a copy of that so you know you have

ownership over the copyright but that's just basically a display of it or maybe a copy or a

display of the actual copyright that you have ownership over but the moment that was put into

tangible form that would be the original and doesn't really kind of make any difference

because it's just the way that it is displayed so you could display it on IPFS or aws or Arwave

it is the way that it's being displayed in multiple nodes host those things so that's

what you're referring to um it would just your copyright would not be affected by that

yep that makes perfect sense another Fidenza question if I sell a Fidenza my Fidenza I wish

I don't know if it's a person means they wish they have a Fidenza or they wish they could sell

a Fidenza uh what happens to the physical printed artwork that I also bought of my piece

does the new owner have the right to also print the same piece are they open editions or one of

ones and I'll just add here I think Tyler does I think just print for the first person who asks

regardless of the token but how do we think about this from a copyright perspective um I think the

copyright holder dictates those rights so we will have to go to Tyler Hobbs and those terms he

and he he does he prints it for I think the first few um the first I think the first holder

and if you go to his website it says like which ones are available and which ones are not um but I

would I would say that that's depending on him and I know he's mentioned in the past he's he's

written articles I don't know if any if you've seen this but he wrote an article about why he

didn't want to have cc0 as in his work of art he actually wore what he wanted to keep a

non-exclusive license and why that the reason why he kind of leaned towards that but I would lean

towards this read the terms of Tyler Hobbs and each one of the Fidenzas in each one of his works

um before we determined that right and so this is a good example of Fidenzas are

released under a traditional license right they're not a commercial or cc0 and the copyright

is owned by Tyler and that copyright can be expressed in um the nft art that's on Shane

in the case of Fidenzas but also a print and because Tyler is in charge whatever the rules

are on printing fidenzas Tyler gets to decide and Tyler could also decide to change the rules

right tomorrow he could say that everyone that has a Fidenza could ask for a print if they want

I mean he might not want to do that but if you wanted to he could right yeah those are copies

those would be considered copies of the copyright and he would continue to be the owner and

he does not mention anything against cc0 he said just not every project is intended to be

nz zero and I agree I think they're you know each model is applicable to each project differently

okay we have a question here about virtual clothing that says of trademark of

clothing is a complicated matter one cannot trademark a plain blue shirt but the logo on it

can we expect that virtual clothing given that the underlying code is unique will be applicable

to trademark e.g. will we be able to trademark a plain blue shirt so it would have to indicate

source so the plain blue shirt is not indicating source that would not function as a trademark

but what you're asking is that it's hard to trade and I don't know if they're confusing

copyrights and trademarks I think you might be a little bit of a confusion there but if it's just

the blue shirt that's indicating source as this source of the remaining goods that you have then

I would apply for a class nine which is a non-domotable digital asset that points to the blue shirts

that you're selling that would be what you basically have to trademark and that's that that

blue shirt you could actually have a trade dress which is like kind of the pack could be potentially

even packaging so like the coca-cola bottle has a trademark on the trade dress so like the way

the coca-cola bottle looks so that's what you're referring to and you could have multiple ways of

kind of protecting that blue shirt that you're referring to. okay and I think you're right it

might be unclear if this is a trademark or a copyright question okay with regards to the

can't-be-evil license what's the licenses development and acceptance trajectory and how are high

potential stakeholders responding to it I think for the benefit of the audience the can't-be-evil

license is a sample NFT commercial license that Andreessen Horowitz developed on their own

I had they had asked me for some feedback that I gave it was an Andreessen Horowitz project that

then they released to the world and said we think this is a good commercial license and feel free

to use it what are your views on the license have you seen people adopting it you have any

perspective on this um I'll say this I think everyone it's going to I don't like templates

personally just because I think templates kind of uh you're adopting someone else's thought

process basically on what they intended to give um but I think it's a good framework for you to

think about okay like do I want this and you could slice and dice however you want so like you

as a copyright holder you get to have all the bundle of rights that we mentioned earlier at the

beginning and you could slice them and dice them however you want so you could give anyone the right

to for going back to the analogy of the house you could get someone the right to enter your kitchen

or only enter your bathroom so it's you you have the say on how much you want to give and what the

scope of that is um so for those I think this is a good starting point I really think they did a

great job of kind of like addressing some of the issues in this space but I think you need to read

those through Lindsay how applicable they are to what you're intending to grant and what you're

intending to keep a control over yeah this makes sense it's how I think about it too I mean you have

it's a very interesting template to look at there's no creative common templates look like I mean

honestly I think the cryptopunks license is quite good in that dimension that's another area to look

at and I don't know that any major projects are taking these directly copy pasting and not making

any changes but in a way it doesn't matter right like if there are good ideas and people put them out

there um it'll help the space move forward yeah yeah oh good let's take maybe a couple more questions

and then I mean I thank you we've taken up a lot of your time now we're heading towards two hours so

I do want to bring it to an end at some point so let's do a couple more questions and then wrap

this up this is blockchain is borderless which it is or is crypto assets public watch answer borderless

how do you think about I'm going to rephrase the question a little bit but how do you think about

copyright and licensing across a variety of foreign countries

um so that's an interesting question because as far as copyright goes um there's no such thing

as international copyright so each country has its own regime that protects authors and they're not

extraterritorial so um that does so that our US copyright does not protect against copying outside

of the US works by American authors but we do have some treaties so in specific jurisdictions that

have signed on so treaties like the burn convention um and that basically you and this is a very

complicated area so I don't want to get too deep into it but if an American author for example is

in French in France they will have a member of the treaty party like they will have the same

rights as a French author would have um but again there's there's more to it than that so it just

might take on it is um we've been fighting over and international rights and some kind of a

kind of across the board kind of standardization for a long time I doubt we're going to get to

a place where everyone's of the same regime um but there are some treaties that allow us to

have some rights that are similar to or that will have the same treatment if you were in that

jurisdiction and a specific person from that jurisdiction so short answer is it's complicated

possibly more complicated the internet might be even more complicated than international

trademarks less standardized than trademarks are maybe yeah I would say so um it does like

there's section 104 which potentially protects like unpolished works so like there's there's a

different like a kind of nuances to international space that could be very complex but for

the most part just know that if you are part of a treaty which the US is of such as the burn

convention you likely have some rights in that jurisdiction that's also part of that same treaty

and they could be very similar and I don't want to speak in generalizations but yeah they tend

to be very similar not to generalize okay last question this is a funny one uh

crypto punks versus crypto funks they look exactly like the exact same pfp just mirror image

which any copyright issues there until someone brings the lawsuit then I'll refrain from that

conversation because I know he tried to be mca but um I think it's just depends on who wants to

litigate that okay right so that would be a specific that have to be a specific lawsuit

on a specific topic and then we'd discover I assume the crypto funks would make some type of

fair use commentary type argument and if you go wanted to pursue them they would say it's

not that you're commercially using my copyright but so far this in the broad crypto punks versus

crypto funk sense has not gone to court and so the reality is we don't know until it happens

with a specific set of facts and specific set of arguments how a court would decide right yeah and

I say that also because they could bring into question the copyrightability of the crypto

punks so that's why it's it's more than just hey are they similar it's a little bit more complex

because someone could bring into question like is that even a copyrightable um subject matter

because they're so they were created by AI or and I know Professor Brian Fry has an

article on the copyrightability of crypto punks so that's why I think there's a lot of things that

could come into question if that also comes about in a litigation right so because in a way that

we're not in a way I mean the crypto punks like a lot of general projects a lot of PFP projects

are generative right you didn't know what streets we're going to get and so what you're saying is

is for there to be a lawsuit here you go would have to bring it right and if you're

brought the copyright holder would have to bring it right yes um and that's because they gave exclusive

rights to so like when you give exclusive rights normally and then this is how it's enforced normally

when you give exclusive rights you give that person who gets that exclusivity the right to sue as well

because it's exclusive to you you're basically taking my place as the creator in a way legally speaking

so um the holder would have to bring that so if you're somebody's in front of your

punk you could potentially bring that but then they might come back in the defense and say well

you don't have something that is not even uh copyrightable because it was created by AI so

therefore there's no there's no actual creation of that's allowed to be copyrighted in the first

place wow and you have a registration and you have to have a registration in order for you to

bring that into law so even in the in the first place you also have to have the registration

which you could potentially have and I think they do mention that in the terms of use you could bring

that you could actually register your asset and I think they they mentioned

that briefly in the terms of use amazing but you have yeah they explain how you want they want they

want to keep some kind of control over it over the registration as I think they want to be named as

the the owner and you could be uh or the author I can't recall but it's in the terms of use that

whether you could register wow this is where this stuff is super interesting super complicated but

I mean just utterly fascinating we are here on the frontier I think of IP and technology and networks

I think we need to say an utterly gigantic thank-you to Ellie for today she a presentation was

hers she put it together I just put in the pretty pictures that was my contribution was like I copy

pasted some pictures in there all of this was Ellie it's obvious she knows everything inside out

and backwards I very much appreciate the time she gave us so everyone please give her a virtual

round of applause and thank you so much thank you I think you did a lot more than that so thank you