It’s been a while since we talked about NFTs here at Llama Towers, this is mostly because not a lot has been happening, but it is also due to most of my attention being directed to artificial intelligence. But a recent event has made things interesting in the NFT space once again, and could prove to give us a noteworthy test to the interface between NFTs and copyright.
The incident involves Moonbirds, an NFT collection featuring owls. On the face of it, this looks like your average NFT profile picture project featuring cute animals such as penguins, kittens, and apes. But Moonbirds has two interesting different features. The first is that it is an on-chain artwork project, in other words, they represent a digital art piece whose entire content and proof of ownership are stored directly on a blockchain. This is in contrast to most off-chain NFTs, where the artwork is represented by a link stored in a distributed service such as IPFS (this will become relevant later). The second feature is that in 2022 Moonbirds developers announced that the project would be released using CC0, which as many readers will know, is a Creative Commons licence that acts as a dedication into the public domain, or a full irrevocable licence of all exclusive rights where the release into the public domain isn’t possible.
Kevin Rose justified the move at the time with these comments:
“web3 is a chance to reboot and reexamine everything back to first principles. A chance to say that others don’t have to fail for us to win. A chance to be more inclusive and open to all. As a quick analogy, Ethereum is a credibly neutral platform – anyone can build permissionless on top of this trust-minimized database without fear that their protocol, platform, or asset can be taken away from them.
Platform neutrality is *powerful*. This simple principle has created a sturdy digital foundation for massive ecosystems to be built on top of Ethereum – across finance, gaming, art, social, and culture.
Similarly, CC0 empowers *anyone* with the ability to creatively remix work for commercial purposes. It is a promise by the creator of a work that the work itself can become a credibly neutral platform – without restraint or the fear of restriction or creative limitations.”
While I read a few criticisms at the time, as far as I can tell the move was met positively by the community. NFTs, smart contracts, and the so-called web3 space were designed precisely to disrupt existing legal paradigms, and a big part of that relies on the fact that non-fungible tokens would replace some of the trappings and mechanisms used by intellectual property, and specifically copyright. In this scenario, we would be living in a world of automated transactions mediated by smart contracts and cryptocurrencies, and the traditional processes and exchanges would not require copyright law because they would be encoded in the platforms; payments, licensing, assignment of rights, and all other everyday realities of managing IP would be done by those automated systems. Code is Law.
Moreover, it has to be remarked that since the height of the NFT craze in 2021-2022, it has become evident that copyright has less importance to NFTs than what many may have thought, I point I made in this article for the Communications of the ACM, and which is something that has been proven as the most high-profile cases involving NFTs have been about trade marks, and not copyright (namely Ryder Ripps and Metabirkin). In fact, you don’t necessarily need copyright to mint or issue an NFT, a fact that seems to continuously elude some people.
The practical result of placing Moonbirds in the public domain was that anyone would be able to take the artwork to create derivatives, so the actual value of the project comes from the ownership of the token, and it would allow the creation of a parallel economy of related shareable content. So projects such as Fake News, or Broadside were developed relying on the public domain/no rights reserved status of Moonbirds.
Fast forward to February of this year, and the makers of Moonbirds, Proof Collective, were acquired by Yuga Labs (of Bored Ape fame). Besides developing the BAYC NFT collection, Yuga Labs have been busy with trying to create a site called Otherside, which is “a gamified, interoperable metaverse” where users can bring their NFTs as playable characters. In order to add variety, Yuga has been incorporating other popular NFT projects such as Cryptopunks, Coolcats, Nouns, etc. But what about Moonbirds? The fact that Moonbirds had been released under a CC0 licence could be a sticking point, all of those other projects still are supposedly protected by copyright (maybe, that’s another sticky subject). So at least for now there doesn’t seem to be a plan to incorporate Moonbirds into Otherside, but Proof Collective/Yuga dropped a bomb on April 29 by announcing that it would create its own metaverse site called the Moonbirds Universe, which would require users to have a Moonbird character. However, the controversial bit is that they are creating a new commercial collection called Mythics which does away with CC0, and consists of full commercial rights for its holders. How to handle the CC0 public domain derivatives you ask?
“If you’ve made stuff during the CC0 era – cool. But from now on, you’ll need to own a Moonbird to keep doing so.“
And all hell broke loose. The problem is that CC0 is irrevocable, which makes sense when you think about it precisely to avoid this situation. So imagine that you find a work released with CC0, and you happily make a derivative in good faith, but then the licensor decides to just revoke the licence and sue you for copyright infringement. So the Moonbirds community has been quite vocal on Twitter and other places crying foul, in my opinion justifiably. Unfortunately the legal explanation of how Proof Collective/Yuga intends to get around the irrevocable nature of the licences appears not to be forthcoming, the documentation section of Proof Collective is rather empty at the moment.
Some people have been trying to offer solutions, such as friend of the blog Eliana Torres. I have seen some innovative solutions presented, such as issuing new tokens, wrapping existing ones in new ones with new terms and conditions, or re-issuing art. While I appreciate these efforts and suggestions, the fact remains that the project had been released under CC0, and I just don’t see many ways around that fact. One of the things that we always told creators back in my time as a Creative Commons volunteer and advocate was precisely that they had to be sure about their decision, as it would be irrevocable, a word that would sometimes scare people, and justifiably so. Releasing a work wit CC0 can actually release it into the public domain where that is applicable, and there’s no going back from that in some jurisdictions. So for all effects the Moonbirds are in the public domain in many countries (yes, this is complicated). And once in the public domain, or under a solid licence such as CC0, there’s no taking it back, as Highsmith v Getty exemplifies.
So what now? I don’t see many solutions to this for Proof Collective/Yuga, maybe we could even see a lawsuits brewing? I’m willing to consider some other novel ways, but perhaps the easiest would be to make Mythics and any future Moonbirds projects non-CC0, but the works and artwork would have to be different. Or perhaps try and embrace the public domain nature of the tokens? Who knows. The fact that Moonbirds is an on-chain project makes it even more difficult to make changes, the artwork is intrinsically tied to the token, so any changes to the project will have to take this into account.
Anyway, although this case is fascinating, I hope not to have to go back to covering NFTs. Quoting Michael Corleone in The Godfather 3 “Just when I thought I was out, they pull me back in!”
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