What Rights Come With Your NFT

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As non-fungible tokens (NFTs) increasingly become mainstream, investors are finding out that not every collection is created equally.

In general, unless there is a formal grant of rights, you don’t get any rights in the digital work associated with the NFT. To date, three models have emerged. One model is that when you buy an NFT you don't get any intellectual property rights in the underlying work, other than the right to use it for your own personal, noncommercial use. NBA TopShot is a good example of that. And that is consistent with the way digital collectibles and artworks have traditionally been sold.

The only way that rights are conveyed is if you have an agreement that conveys those rights. Silence in the world of intellectual property means that no rights were conveyed. In a primary sale, you very often have to click on an “I agree” button. But, very often those terms don't travel with the NFT, meaning that with respect to secondary sales I can purchase an NFT but the rights associated with that NFT were not presented to me and I never agreed to them.

 

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