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How to NFT

So you want to join the NFT hype. Maybe you have an unpublished photograph lying around. Maybe you published an image years ago that people loved and you would like to tokenise it. Maybe you modelled in a photoshoot and you would now like to add ‘NFT-aficionado’ to your influencer repertoire. In any case, you want to create an NFT of an image. How do you go about this? Whose permission do you need? Essentially, how-to-NFT?

The process: blockchain and marketplaces 

NFTs can be used to represent essentially any type of item, real or intangible. Currently, they are predominantly used to represent (digital) artworks and video-game items, but the possibilities are endless. They can be used to represent vintage watches, music or even real estate. This blog will focus on photographs, as their characteristics (specifically, showing other humans) require some special attention. 

The process of creating an NFT is relatively straightforward. There are a couple decisions you have to make. The first is on which blockchain you would like to publish your NFT. Ethereum is the leading blockchain for NFTs at the moment, but there are a number to choose from, such as Wax, Voice or Binance Smart Chain (BSC). Each blockchain has their own NFT token standard, meaning that the consequence of your choice is that you limit the available wallet services and marketplaces to those that are compatible with your choice of blockchain. For example, the OpenSea marketplace works with Ethereum and you will need an Ethereum wallet that supports the Ethereum-based NFT token standard, ERC-721. You will not be able to offer an NFT minted in this way on Binance NFT, which is based on the BSC blockchain. 

Most marketplaces have an easy-to-follow creation process for NFTs. You will have to connect a compatible wallet, after which you can create a collection of NFTs by simply uploading the image(s) you wish to create an NFT for. Some marketplaces require a small fee. There is often the option to add specific extras, like unlockable content for the purchaser.

To sell your newly minted NFTs, you then go through the motions of the marketplace. You have to decide how much to ask, which cryptocurrency has your preference, whether to sell the NFTs at a fixed price or at an auction and whether you would want royalties on future sales. 

In short, if you have a blockchain wallet and can navigate a website, you can create and sell NFTs. However, the tale doesn’t end there. The marketplace does not check your uploaded image for copyright or neighbouring right infringements. So, before you upload anything, you should make sure that you are authorised to do so. We will discuss what this means in the case of photographs.

Copyright and photographs

How are photographs protected? Like any artform, photographs enjoy automatic copyright protection for the author, but this is only the case if the photograph is ‘original and the author’s own intellectual creation’. This bar is rather low and in most cases even a holiday picture will be protected as long as the author can show they had some thoughts about composition, light, angle, etc. In most cases, the author will be the photographer. It is possible that the copyrights will have been transferred, however. 

There may also be other authors. For example, someone who has edited the photograph and can show that they made deliberate artistic choices (again, such that the work is original and the author’s own intellectual creation) may also enjoy copyright protection on their adjustments. This depends on the specificities of the image.

Authors of a work have the exclusive right to distribution, reproduction and communication to the public of a work. Therefore, if you are not the author of a given image, you will need explicit, prior permission from the author(s) before you publish an image. We will discuss whether minting an NFT constitutes a publication in the next section.

Additionally, if the photograph depicts a person/persons, those people might enjoy personality rights. Under Dutch law, this is always the case when the photographer was assigned by or on behalf of the person depicted. For example, if someone were to hire a wedding photographer, the guests and the couple depicted in the pictures may prevent the photographer from publicising their image. 

Even if there was no such assignment, people depicted may object to publication if they have a ‘reasonable interest’ in doing so. Thus, depending on the photograph, you may also need permission from the people in that photograph.

Is minting an NFT a publication?

We have discussed in a previous blog in which cases an NFT could infringe upon copyrights. A short summary: it depends on whether the NFT itself depicts or contains the protected image. In the case of photographs, NFTs will hardly ever contain the image itself, as it is expensive to include large files on the blockchain and digitised photographs tend to be high-resolution. 

In most cases, an NFT will merely refer to an image. Generally, the NFT will contain a hash and metadata which refer to an image. Then, the question is whether such an act constitutes ‘publishing’ in the sense of the Dutch Copyright Act (or a communication to the public, in EU terms). This question revolves around that public, specifically whether the act of minting an NFT will make the image available to a new public

Like always, this depends on the specific circumstances. Is the photograph already published online? If so, is it behind a paywall or widely available? If the image is already rightfully published elsewhere, a hyperlink typically does not constitute an additional communication to the public that would require the right holder’s consent, since there is no ‘new public’. Meaning that one could argue that the act of minting an NFT did not make the image available to people that previously had no access to it and therefore does not infringe upon the copyright holder’s exclusive rights. Technically an NFT just points to a file. And it is this “pointing” identifiable position in the blockchain database that is sold, not, in any way, the picture itself. That picture just sits there: available to all. On the other hand: even if the link to the original material wouldn’t mean a means of communication to a new public, the NFT route is definitely something else than just publishing a hyperlink on the public internet to that public content. Therefore we cannot be sure the courts will uphold the freedom to hyperlink principle in these specific circumstances.

And if one were to be free to NFT public content, mind the “portrait rights”, as a person depicted in a photo could also object to the minting of an NFT without permission. Say you have taken a photograph of a celebrity, for instance, and have minted NFTs referring to that photograph which you sell for €5000,- apiece, without their permission. It is likely that any commercial interest or wish to protect their good name on the celebrity’s part will constitute a reasonable interest. Therefore, you probably need their permission before you proceed.

In short 

The legal situation around NFTs is still rather opaque, most questions do not yet have definitive answers. It makes sense to operate cautiously and ensure you get the rights holders’ permission(s). First, before you publish anything, make sure you know who the stakeholders are. Who holds the copyright on the photograph? Are there any “portrait rights”? Also, if you are not the author, regardless of the exact legal situation, it is questionable to try and exploit someone else’s work. That being said, as long as the image is already publicly available and the NFT contains nothing more than a hyperlink to that image (or something of a similar capacity), you might argue that this does not infringe upon the author’s copyright as set out above. So chances are you can just do it.   

Then, once you have cleared the rights or made your decision on whether or not to take your chances, you only need your crypto-wallet and a preferred marketplace for NFTs and you can start minting.

In cooperation with Saar Hoek

30 September 2021 - Blockchain and law, Copyright

About Jetse Sprey

Jetse is associated with our office as legal counsel. Jetse finds solutions instead of problems and is able to break stalemates again and again. He speaks his mind and is not guided by what he thinks his clients want to hear.

He writes sharp, readable contracts. He has extensive experience with Blockchain and is an entrepreneur in this field himself. He writes convincing procedural documents and advice. He is knowledgeable in intellectual property, privacy and corporate law.

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