Are NFTs Intellectual Property? 🤔
BAYC owners commercialize their Apes, Fan-made NFTs are attracting lawsuits from brands
Cultured is a newsletter by Otis that gets readers up to speed on the most interesting things going on at the intersection of finance, art, collectibles, NFTs, and more.
🗞 STORIES OF THE DAY
Bored Apes gives its holders full rights. They’re using it to create the future of entertainment.
BAYC, like many character-based NFT projects, gives owners the right to reproduce and iterate on their Ape. Some owners are commercializing their Apes, turning them into brand symbols and media projects.
NFT Licenses have existed since the start of the technology, but usually limit rights to merchandise and revenue to $100,000 per year. BAYC gives owners full commercialization rights with no monetary cap.
In practice, that means owners can go wild. A collector recently signed an agreement with Universal Media Group to package four of his Apes into a virtual band (sound familiar?). Other owners have turned their Apes into the mascot of a beer brand and the main character in a universe-building experiment.
Our Take: NFT projects are moving into the physical world. Commercial rights may become an important factor in the auction price of these tokens.
When you buy a physical collectible at auction, you don’t buy any commercial rights (we’re looking at you, SpiceDAO). The price of those goods is based solely on their collectible value, not the potential value of commercializing them. With NFTs, you are (in some cases) also buying commercial rights, making the structure of those contracts a major part of the token’s value. In the coming year, projects like BAYC that offer unrestricted rights may end up becoming more valuable — not because they are better than other projects but because of the potential payout they offer.
Meanwhile, fan-made NFTs based on established brands are facing lawsuits from those same brands
Major brands like Olive Garden, Gucci and the film studio Miramax have filed lawsuits against third-party NFT projects that incorporate elements of their brands.Â
The brands argue fan projects like Non-Fungible Olive Gardens and MetaBirkins are violating their trademarks. OpenSea removed both projects from their marketplace.
The law tends to favor creators who iterate on a brand, especially if it’s meant to be a work of art. But metaverse art hasn’t been tested in a courtroom yet, meaning it’s still an open issue.
Our Take: Fan-made products are a big part of a brand’s popularity. But the metaverse has put these fans in competition with the brands they love.Â
Fair use laws tend to go pretty far in the creative world — the artist Richard Prince has made a career out of appropriating brand images. But the metaverse isn’t just an outlet for artists or fan projects. It’s an untapped market for many brands. For companies that haven’t entered the space yet, successful NFT projects are a serious threat to their digital futures. So they’re pulling out all the stops to make sure they get their slice of the pie.
✨ AROUND THE INTERNET
Autograph, Tom Brady’s NFT startup, has raised $170 million from investors. The company works with celebs to drop crypto collectibles based on their work.
An Italian villa with Caravaggio’s only ceiling mural failed to attract bidders. It can be yours if you have a cool $500 million laying around.
KAWS’s new show is up at London’s Serpentine Gallery. Can’t get across the pond? The exhibition is in Fortnite, as well.
What happens when NFTs come to a Texas art town? Marfa has become the latest site of a culture war over NFTs in the art world.
Coinbase has teamed up with Mastercard to offer non-crypto NFT purchases. The news comes as Coinbase gears up to launch its own marketplace.
A 1951 Mercury just sold for $2 million at auction in Florida. If you think that’s a lot to shell out for an old Ford, keep in mind that it’s an icon of the mid-century SoCal car customization scene.
