[Moonbirds copyright dispute exposes flaws in cryptocurrency’s obsession with intellectual property]
After NFTs became a clear asset type in 2021, the market was dominated by speculation. Since then, many NFT projects have invested heavily in trying to position their brands for a more serious and sustainable future, focusing primarily on intellectual property (IP).
However, the question of how NFT projects actually entitle holders to their IP has remained unanswered, and the issue came into focus again this week. Yuga Labs, the company behind the multi-billion dollar Bored Ape Yacht Club, has announced it will provide exclusive commercial rights to Moonbirds holders. Moonbirds is a series of Ethereum NFTs they acquired in February.
But this plan encountered challenges, because in 2022, the creators of Moonbirds registered the series under Creative Commons CC0, giving up all copyrights to their artistic works and releasing them into the public industry.
In this regard, Moonbirds seemed to try to avoid this reality in an official statement, saying: "You can do whatever you did in the CC0 era, but from now on, continuing to do so requires owning Moonbird."
The statement was widely rebutted by the community, with many including copyright attorney Alfred Steiner pointing out that Yuga's position was legally invalid—Moonbirds were already public property.
Soon after, Yuga's stance seemed to change. Company co-founder and CEO Greg "Garga" Solano announced that commercial rights related to Moonbirds will only apply to new 3D artworks and are limited to current NFT holders.
The move is similar to Yuga’s longstanding practice of allowing Bored Ape Yacht Club NFT holders to create commercial ventures based on their IP. This suggests that Moonbirds-themed merchandise such as chocolate bars and plush toys will be possible, but only for NFT holders.
According to Brian Frye, a law professor at the University of Kentucky, the controversy reveals key issues in the understanding of IP. The distinction between copyright and trademark is particularly important. Copyright protects the content of a work, while a trademark covers the use of a brand. Frye noted that NFT holders are actually relying on the Bored Ape brand rather than the copyright to a single work.
Furthermore, while Yuga may have the authority to regulate the use of the Moonbirds brand, the public industry's creative freedom of Moonbirds works remains.The situation highlights how excessive control over IP can be counterproductive in the crypto world, where the definition of “cool” is often associated with sharing and openness.
In summary, this incident not only highlights the IP value of NFT brands, but also reflects the impact of the lack of legal clarity on the entire crypto industry.
