Popular non-fungible token collections such as Bored Apes Yacht Club and Moonbirds do not give holders the exclusive intellectual property rights they claim, Galaxy Digital alleged in a new report.
The report titled “A Survey of NFT Licenses: Facts & Fictions” looks at the biggest NFT projects in the market and the rights holders get for buying them. It discovered that very few projects grant exclusive IP rights.
According to the report, contrary to the claim by Yuga Labs that anyone who buys BAYC owns the NFTs and all its underlying IP rights, there is no provision for transferring such rights in its terms of ownership.
This means that the buyer does not legally own any IP rights for a BAYC NFT after purchasing it. Other Ape NFTs, Mutant Apes, and Bored Kennels have the same problem.
Yuga Labs “implicitly acknowledges that the NFT holder does not, in fact, own the art,” the report stated.
Moonbirds NFTs Too
Additionally, the report also mentioned that Moonbirds NFT has a similar issue due to its recent CCO decision. Issued by PROOF Collective, Moonbirds was in the news recently after the founder announced that it plans to move the collection to a Creative Commons license.
Moving to CCO means there would no longer be copyright protection on the NFT which means the public can use it freely. Holders have criticized this, saying that it breaches their exclusive IP rights.
According to the report, the unilateral decision to move to a CCO license proved that purchasers never had the right to start with.
World of Women Grants Holders IP Rights
However, the researchers discovered that the World of Women (WoW) NFT collection grants exclusive IP rights to its purchasers. This makes it the only one of the top NFT collections that lived up to its promise.
But even WoW has its issues. While it has the best licensing agreement out of the top 25 NFTs by market cap, it still has issues with transferring rights after secondary sales.
Speaking on the discovery, the head of research at Digital Galaxy, Alex Thorn, said, Essentially, “no NFT projects are successfully transferring IP rights.”
He added that this may become a significant problem for the future of metaverse and undermines the vision of web3.
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