These NFT Licenses were originally written by Gabriel Shapiro & Stuart Smolen with the support and collaboration of Rarible and are licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
THESE ARE NOT PERFECT AND JUST A START TO FURTHER DIALOGUE AND EXPERIMENTATION. WE ENCOURAGE OTHERS TO CREATE ISSUES TO SUGGEST IMPROVEMENTS, FORK & PROPOSE MERGES, AND GENERALLY DISCUSS & SUGGEST IMPROVEMENTS FOR THE BENEFIT OF THE FULL RARIBLE AND NFT COMMUNITY
We have taken note of recent discussions in the NFT community regarding intellectual property issues and guarantees of the uniqueness and long-term value of NFTs. Although there is no one-size-fits-all solution to how NFTs will be used, we believe in empowering our users to create digital collectibles designed to be rare and have lasting value.
To that end, we are pleased to introduce version 1.0 of the Standard Collectibles Sale and License Agreement, which is designed to offer artists, NFT Creators and collectors a new, standardized option for tying the intellectual property embodied in a digital collectible to the NFT.
What follows is a partial summary of what we see as key features of the License, together with some notes about how we see the License fitting into NFT culture:
The License and this announcement are not intended as legal advice. The License is experimental, was prepared with attention to U.S. and Australian law only, and is predicated on a variety of stated and un-stated assumptions. The License cannot be guaranteed to to be enforceable. There is no attorney-client relationship between you and the drafters, and their interests may differ materially from yours. In the event that the License is used on an NFT platform, it is possible that the terms of service of such platform could conflict with the License, and the possible effects of such conflicts are complex and unpredictable. No guarantee is made of compatibility between these Licenses and an NFT platform's standard terms and conditions, and, in the event of any conflict, the platform's standard terms and conditions will likely override this License either partially, where there are conflicts, or even entirely.
The License is optional. NFT Creators may 'bring their own license' or be silent on licensing terms (which may result in an implied license, or no license, or some other unpredictable legal arrangement, depending on local laws and a variety of factors).
If intended to apply to an NFT, the License should be included in the NFT’s metadata (in full or through an IPFS or other web link). For front-ends that allow prominent NFT descriptions, an indication of the applicability and intended legally binding effect of the License should be included there as well.
The License is a legal agreement. You should take it seriously and seek legal advice to understand how it might impact your rights and obligations. If you breach the agreement (for example, by selling an NFT using someone else’s image), you could be sued by the IP owner, the NFT purchasers, the relevant NFT platform or other third parties.
The License is designed for digital image collectibles. It assumes that there is a NFT which is tied to an image and that the pairing of such NFT and image (the ‘Collectible’) is meant to have inherent artistic or consumer value. It is not necessarily suited to other uses of NFTs because it is focused on visual works of art. The License would not be suitable for other uses of NFTs without reviewing the terms and adjusting them to reflect the specifics of the NFT in question.
The License seeks to permanently tie certain intellectual property rights in an image to an NFT. By using the License, the NFT creator is making a legal representation that the artist has the requisite intellectual property rights in the image to make this link enforceable. That means the NFT creator is either the artist who created the image or has a valid sufficient license from the creator of the image. Thus, loosely speaking, the License is intended to make the NFT similar to a transferable instrument of title to the licensed image rights. However, as noted above, the treatment of tokens as contractual instruments is of uncertain enforceability under the Uniform Commercial Code (as it may be implemented in various U.S. states).
Under the License, the artist retains ownership of inviolable moral rights and other intellectual property rights in the image. The sale of the NFT is not a sale of the image, but a license of certain rights in the image.
The License comes in two varieties—exclusive and non-exclusive:
- In “Variant E” of the License—the “exclusive license” variant—the NFT Creator agrees not to grant further licenses to the image except tied to the original NFT or batch of NFTs. Thus, the effect of Variant E is similar for practical purposes (but not legally identical to) a transfer of ownership. However, this version of the license also limits an NFT collector's use of the image significantly and is not suitable if the intent is to allow the collector to generate a commercial benefit from the use of the image beyond attempting to on-sell the NFT at a profit.
- In “Variant NE” of the License—the “non-exclusive license” variant—the artist makes no commitment not to engage in further licensing of the image; thus, under Variant NE, the artist could mint additional NFTs tied to the image, sell the image on t-shirts, and make other commercial and non-commercial licenses of the image.
- In theory, Collectibles sold under Variant E of the License should be considered more “rare” and potentially more valuable. Which variant is used affects what other uses the NFT Creator can make of the image in the future and may impact the value of the Collectible.
The License implicitly recognizes the difficulty of enforcing IP rights in NFT Collectibles. When an NFT Creator sells an NFT Collectible, the primary incentive of enforcing IP rights could shift from the NFT Creator to the collector. Therefore, the License subrogates in some cases the right of collector and NFT platforms to the NFT Creator (meaning the collector takes on much of the rights of the NFT Creator), so that a collector (in cooperation with a willing NFT platform) could, for example, bring legal action against 'counterfeit' NFTs. The expectation is that NFT Creators will provide reasonable assistance if enforcement efforts are undertaken.
The License recognizes how blockchain forks could affect NFTs. A wide variety of approaches to this issue could be possible; for simplicity, the License provides that NFTs will be honored, from an IP perspective, on a subset of forks--namely, 'persistent forks'. This seems to provide the maximum respect for the NFT as an instrumentality of rights, since the same person should initially control the relevant private key (and duplicated NFTs) on both chains, and can decide whether they want to honor the NFT on both chains or only one of them.
The License seeks to respect artist freedom. Thus, it contains a variety of use restrictions. For example, it prohibits the NFT holder from incorporating the relevant Collectible Image into merchandise intended for sale or distribution. Of course, tailoring these use restrictions is one area in which it might be especially interesting for artists to experiment by forking the license and supplementing, removing or modifying the restrictions as they desire.