Moonbird’s Copyright Controversy Exposes Flaws in Crypto’s IP Obsession

It's not much of a mystery: When NFTs emerged as a unified asset class in 2021, their value proposition was largely speculative. Since then, NFT projects have been spent Millions trying to relate their brands to serious-sounding and sustainable futures; Most have chosen to go all in on the temporary, provocative concept of intellectual property, or IP.

However, it has never been resolved what exactly IP means in such a context, or to what extent NFT projects can grant IP rights to their owners. Those unanswered questions this week, Yoga Labs—the Many billions of dollars The company behind Bored Up Yacht Club—announced The acquired Ethereum NFT collection plans to give Moonbirds owners exclusive trading rights In February.

There was only one problem with the plan. In 2022, the original creators of Moonbirds submitted the collection under Creative Commons 0 (CC0), a very strict legal instrument that relinquished copyright claims to Moonbirds NFT artwork and relinquished the pixelated owl characters back to 2022. State of the people.

Moonbirds' official statement on the matter, posted on Monday, comes as an attempt to sidestep this fact. “If they make things in the CC0 era—cool,” the company said He wrote. “But from now on you have to own a Monbird to do it.“

Twitter users immediately hit back. Including copyright attorney Alfred Steiner, they argued that the company's position was legally untenable—the Moonbirds were now in the public domain, and there was nothing to put that toothpaste back in the tube.

Soon Yuga was seen adjusting his stance. Within hours of the initial announcement, the company's founder and CEO, Greg “Garga” Solano; He wrote Commercial rights related to Moonbirds will only be attached to the new 3D Moonbirds artwork, which will only be available to current NFT owners.

Those trading rights will be similar to those enjoyed by Bored Ape Yacht Club NFT holders, Solano said. Over the years, Yuga has allowed BAYC owners to create and sell such monkey-themed efforts. Burger restaurants And Bottled water Companies. The implication was that Moonbirds-themed chocolate bars and plush animals could be around the corner – but only current NFT holders would be allowed to create them.

So what is the truth? Can anyone freely argue over the copyright of Moonbirds until the end of the day? Or does Yuga have the power to control who creates Moonbirds themed items?

According to Brian Frye, a law professor at the University of Kentucky who specializes in NFTs and intellectual property, both statements can be true at the same time—a fact that exposes key issues in how IP is currently understood and discussed in crypto.

For Frye, it all comes down to the critical difference between copyright and trademark. When Yuga Bored Up or Moonbirds claim that NFT holders have exclusive commercial rights, the company indicates that these sources are copyrighted by an individual NFT.

Copyrights protect the content of a work, such as the plot of a book or the unique features of a painting. So Yuga maintains that each Bored Up or Moonbird has its own copyright.

But fruit – including other legal scholars Alfred SteinerThey don't believe commercial experiments like Bored Up Burger Joint are copyrighted. Instead, as Frye puts it, they're using the generic Bored Monkey brand, which falls under trademark law. To put it simply: people line up to eat a bored monkey burger because it's associated with the Board Up Yacht Club brand, not because a bored monkey appears. #6184 Especially.

That separation is a double-edged sword. In the Moonbirds controversy, it means it could be Yuga. can Police using the Moonbirds brand for business. But the general notion of individual, copyright-based commercial rights controlled by NFT holders is somewhat less attractive.

In practice, Yuga is choosing and saying that he chooses. is not To sue current NFT holders for trademark infringement. But if the company changes its mind, there is no hope for the said owners.

The original Moonbirds registered under CC0, meanwhile, remain in the public domain. But that CC0 variation gives no rights to the Moonbirds trademark. Any member of the public trying to open a Moonbirds ice cream shop in the near future b Legal travelA stern call should be made from Yuga advocates.

Decrypt He contacted Yuga Labs several times regarding this story but did not receive a response.

For Frye, the Moonbirds scene shows just how much of a buzzword—and perceived value added—IP is for NFT brands despite the lack of legal clarity around the topic.

“There is a certain subset. [Yuga’s] Clients who are really tuned into the idea that IP is important,” Frye said. Decrypt. “They don't even know what it really means, but it's a talisman: ‘IP! I want to own the IP no matter what.'

In fact, in the hours after Yuga was told about Moonbirds this week, the group jumped nearly 30% in its floor price—or the cheapest listed NFT price on the market— NFT price floor.

But that short-term victory may be pyrrhic. Since the crypto winter of 2022 NFT prices, Yuga has struggled to find a way back to its once cultural dominance. It cost nearly $430,000 to join BAYC at the project's April 2022 peak. Now it just takes 42,000 dollars.

Last week, while Announcement CEO Greg Solano said the company had “lost its way” as Yuga hit a wave of layoffs.

Being more aggressive about protecting the Moonbirds' trademark — which this week's announcement seems right down the line — will temporarily boost their perception of Yuga's value. He may already have. But eventually, Frye said, self-imposed restrictions on who can get involved with the Moonbirds brand could backfire on everything that's great about crypto.

“One thing they have going for them is good will with their customers,” Frye said. “And now they come back and say, ‘We're going to try to bring back intellectual property rights, which are mostly an illusion.'

Edited by Andrew Hayward.