Can I register copyrights to protect my NFT images?

Introduction to NFTs and Copyrights

NFTs are everywhere.  By the end of 2021, the total market size for non-fungible tokens grew to $41 billion.  Although there is some data indicating that the market is a bubble about to burst, it’s undeniable that people have found real value in what many (myself included!) initially thought were mere jpegs.  While the function of some NFTs is indeed limited to showing them off as your new profile picture on Twitter, there is a growing number that try to provide real-world utility to holders.  This includes access to events, membership to restaurants or clubs, and use in the gaming metaverse.

Thus, NFT creators need to be careful about protecting their project’s IP.  Copycats drag down the value of a brand and confuse consumers.  It’s no secret that plagiarized collections are common on OpenSea, the most popular NFT marketplace.  (There’s even a dedicated Twitter account that documents these thefts.) 

One of the more powerful tools against scammers that NFT artists can use is copyrighting the images their NFTs point to.  Title 17 of the U.S. Code, section 102, gives copyright protection to anyone who creates an “original work of authorship” the moment it is “fixed in any tangible medium of expression.”  That means that as soon as you create a work in a fixed medium (canvas, electronically stored document, film, audio recording, etc.), you have copyright protection in it.  This protection gives you the rights to reproduce, prepare derivative works, and display your work (among other things).

But artists may want to go the extra step by registering their work with the Copyright Office.  Doing so allows you to take advantage of various benefits, the most important being the ability to sue others for copyright infringement.

The Requirement for Human Input

So, who is eligible for a copyright?  Only a human being: the Copyright Office will not register works “produced by a machine or mere mechanical process” that operates “without any creative input or intervention from a human author.”  This may seem obvious, but when dealing with works that are created with the help of software (like NFTs), this requirement becomes more important. 

Let’s look at some examples:

1.  A painter creates a watercolor masterpiece on canvas.  The painter created an original work and fixed it on a tangible medium, so she’s eligible for a copyright.

2.  A photographer takes a portrait of someone.  Although assisted by a machine (the camera), the photograph still comes from the photographer’s creativity: he controlled things like the lighting, the angle of the photo, and the subject, so he’s eligible for a copyright.  (Fun fact: this was the dispute in an 1884 Supreme Court case named Burrow-Giles Lithographic Co. v. Sarony, 11 U.S. 53, which held that photographs are copyright eligible.)

3.  A digital artist creates a drawing using Microsoft Paint.  (Yes, there are amazing drawings using this humble software!)  Although the work is completely created by software, it is still copyrightable because the person still exercised creative control.  Any work done by the software was done purely at the direction of the person.

4.  A digital painting is created entirely by AI without any creative contribution from a human.  The Copyright Office recently held that such a work is not copyright eligible because it wasn’t created by a human.  Steven Thaler tried to register a copyright in the image below, called “A Recent Entrance to Paradise.”  Because he admitted the image was “autonomously created by a computer algorithm running on a machine,” and had no human creative input, no copyright was awarded.  (Thaler may appeal this decision—we’ll have to wait and see.)

A Recent Entrance to Paradise

So we’re left with something like a spectrum where copyrightability depends on the creative control a human has on the output.  As Professor Jane Ginsburg from Columbia University put it, an author “need not maintain absolute control over the execution of her work and may instead rely on external forces, like randomness and nature, to complete her work, so long as she bends those forces to her will.”

On one end of the spectrum are creative works that are the result of purely human input without any randomness or machine assistance, and on the other end are creative works that have zero human input and are purely AI-created. 

Copyrightability of NFTs

Where does that leave NFTs?  “NFT” can encompass a large variety of concepts.  The most popular (and valuable) NFTs, such as the Bored Ape Yacht Club or CryptoPunks, are large collections of randomly generated cartoon portraits, so I’ll focus on that specific type.  Each NFT collection has a main portrait (like an ape) with several art layers on top.  Each layer has different variations.  These variations are randomly compiled on top of the main portrait to create unique NFTs (usually 10,000 in the largest collections). 

Let’s take the BAYC collection as an example.  Each BAYC NFT has seven properties: Background, Clothes, Earring, Eyes, Fur, Hat, and Mouth.  Each of those properties has variations.  Thus, each ape can have one of five colors as a Background, one of six possible types of Earrings (or no Earring at all), or one of 19 different types of Fur.

The combinations are randomly generated by an algorithm, so you may end up with an ape with the following properties:

Background: Army Green

Clothes: Striped Tee

Earring: Silver Hoop

Eyes: 3d

Fur: Dark Brown

Hat: Beanie

Mouth: Phoneme Ooo

Or, BAYC #8460. 

So, can the artist copyright her NFT collection?  Are the NFTs the result of human creative input over which the artist had control, or do they cross the line into computer-generated randomness over which she had no appreciable say?

There are over 1.3 billion different possible combinations of BAYC NFTs given the number of layers and variations.  Since each NFT was randomly generated by software, it’s impossible for the artist to have known in advance what the 10,000 NFTs would look like.  Yet, the artist created each of the underlying layers: she drew the ape and each of the elements, like the Earring, Hat, and Clothes (with the help of software, of course, but that by itself does not defeat copyrightability).  She also presumably directed the algorithm where to place each of those layers (e.g., “if there’s an Earring, place it on the right ear”; “place any Hats on this part of the head”).  Although this is a far cry from the purely AI-created drawing Steven Thaler failed to secure a copyright for, it is also not the same as creating the Mona Lisa. Copyrights require some minimum amount of creativity, and although this is legally a low bar, a few pixels representing an earring may or may not cross it.

In summary, NFTs are certainly worthy of consideration for copyright protection, but the ability to secure that protection may depend on how much creative input the artist has.  For the largest NFT collections that are randomly generated, artists who create the underlying layers and portraits, control where each of the layers are placed, and ensure that the layers themselves are sufficiently creative, have a better chance of securing a copyright in their collection.

(One final note: just because an NFT collection is copyrightable doesn’t mean it is practical to register a copyright for each NFT.  Contact us for a free consultation to figure out your options.)

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