BAYC (Bored Ape Yacht Club) is one of the most notable NFT collections within the crypto space. NFTs have gained traction in recent years, as several celebrities such as rapper Snoop Dogg show increasing interest in them.
People purchase NFTs with the hope of gaining complete rights to the tokens. However, a recent Galaxy Digital Research shows that might not be the case most of the time.
On Friday, Mike Novogratz’s investment firm Galaxy Digital released a research article on the NFT industry. The company looked to survey NFT licensing in the industry and bust the falsehoods surrounding it. The research highlighted the growing interest in NFTs and noted that the industry likely has a “bright future.”
Nonetheless, it pointed out that, in most cases, when buyers purchase NFTs, they do not receive the appropriate IP rights.
We reviewed the licenses for all of the top NFT collections, and in all cases, except one, the issuers offer only a usage license to the NFT purchaser,
the research article says.
During the research, Galaxy Digital discovered that the proper commercial rights to BAYC and other collections by Yuga Labs are allegedly not transferred to purchasers of the NFTs. This stems from an alleged contradiction in Yuga Labs’ terms of ownership.
According to Yuga Labs, when one purchases a BAYC NFT, one owns the underlying Bored Ape “completely.” Notwithstanding, there is absolutely no provision for transfer of intellectual property (IP) rights to the purchaser of the BAYC, the article claims. This indicates that, in a legal sense, the purchaser allegedly owns no IP rights to the BAYC. The same issue exists with other collections like MAYC and BAKC.
In addition to this, popular satirist Ryder Ripps had been in the news a few months back due to issues with Yuga Labs. Yuga Labs had sued him for “scamming” consumers with copycat NFTs. Apparently, Ripps created a mimicked version of the BAYC collection which he dubbed RR/BAYC. According to Ripps, this was an attempt to prove that BAYC owners do not really get proper copyrights to their NFTs.
Besides Yuga Labs and the BAYC collection, Galaxy Digital noted another NFT collection that has similar copyright issues. This was the Moonbirds NFT collection, issued by PROOF Collective. The research notes that there is a discrepancy between PROOF Collective’s public statement and the Moonbirds’ license agreement.
The research argues that the issuers of the NFTs—in this case, Yuga Labs and PROOF Collective—are the real owners of the rarity trait. “To truly own that rarity trait, it’s not enough to simply own the digital token entitling you to a license, for the license could change at any time,” it adds.
Notwithstanding, the research mentions that the World of Women (WoW) collection stands out among the bunch. It highlighted that it is the only collection that grants complete IP rights to purchasers of NFTs.
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