Art Wars: NFT v copyright

At the end of November, the Financial Times reported that art curator Ben Moore could be facing legal action over minting and selling NFTs of decorated Stormtrooper helmets.

Moore’s project, Art Wars, involves hundreds of NFTs, including NFTs of photographs taken of real-life decorated Stromtrooper helmets. The decorated helmets were created by various artists as part of a charitable project for Moore at the Saatchi Gallery, London in 2013.

FT reports that some artists claim that the NFTs were minted and sold without their consent and without Moore owning copyright to the decorated helmets. In contrast, Art Wars has alleged in a series of tweets that the helmets were the “property of Art Wars” who “retain the IP rights for all pieces”, which is “clear from the agreement that many of the artists signed” with the project.

Fun with non-fungibles

NFT stands for “non-fungible token”. Currency is fungible – I can give you five £1 coins in exchange for a fiver. NFTs, however, are non-fungible – they cannot be interchanged like our coins and notes.

Their value, instead, is that they can verify ownership. NFTs can be thought of as a digital ledger, unique and recorded in blockchain with an artist’s signature. This, in practice, proves title to a digital asset. The virtual ledger records when the asset was minted (i.e. created) and how it has been transferred or traded since.

Selling an NFT will not transfer ownership of copyright, just like buying the David Hockney painting would not make you the owner of the copyright in Hockney’s “Garden” image. Instead, NFTs transfer title to the digital asset. In the world of art, where provenance is of upmost importance and value, NFTs have opened the door for digital artwork to be easily verifiable, therefore suitable for trade. Even if the digital art can be copied, pasted, and viewed by the rest of the internet, only the NFT-owner owns the original image.

NFTs have been in existence for many years now. However, they recently exploded in the world of art in March this year, when Christie’s became the first major auction house to sell a purely digital work of art, with the sale of "Everydays - The First 5000 Days" by Beeple for $69 million.

NFT of a photograph of a work - who's the owner?

FT reports that Art Wars has put on sale 1,138 NFTs for more than 1,600 ETH (close to £5 million), including hundreds from photographs of real-life decorated Stormtrooper helmets.

The original Stormtrooper helmet was (in)famously denied copyright protection by the Supreme Court in Lucasfilm Ltd & Ors v Ainsworth & Anor [2011] UKSC 39, on the basis that it was not “artwork”. Although the helmet became an iconic metonym for the epic sci-fi franchise, it fell short of being classified as an art “sculpture” because it was not made with artistic intent. Instead, it was considered utilitarian, to be used as a costume or prop in the films. In stark comparison, however, the collectible, decorated Stromtrooper helmets photographed by Art Wars were designed by artists (the likes of Anish Kapoor and David Bailey), with obvious artistic intent.

As a result of section 11(1) of the Copyright Design and Patents Act 1988 (“CDPA”), the first owner of a copyright work is the person who creates it – the artists in the case of the decorated helmets. Copyright ownership allows the artists to stop others from copying their works, including making a replica but also taking a photograph. This is by virtue of section 17(3) CDPA, which incorporates making a two-dimensional copy of a three-dimensional work (e.g. copying 3D artwork in 2D) into the list of restricted acts that only the copyright owner or licensee can perform.

The ultimate question for Moore and the artists will be whether Art Wars had permission to photograph and reproduce the Stormtrooper helmets for the NFTs. NFTs remain unregulated at present, and the prospect of disputes involving NFTs, copyright, and licensing is to be expected. Nonetheless, they are considered revolutionary for the art world because they open access to art and dealership through the internet.

The long-term impact on art trade and auction houses is yet to be seen – perhaps the art world will become more inclusive, perhaps artists will be able to access better royalties through the use of block-chain technology, perhaps even the world of copyright will feel the pressure to adapt. For example, under the CDPA only a copyright owner or licensee may adapt literary, dramatic or musical works, e.g. dramatising a novel or arranging music. Will NFTs call for this restricted act to be expanded, to cover adaptation of an artistic work into an NFT?