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 Digital Property Rights in the Metaverse
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Today we wanted to unpack the digital property rights discussion that happened recently in the NFT space and how the Metaverse complicates it further.
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Crypto and NFT twitter recently debated the concept of intellectual/digital property rights.
There are two big schools of thought on opposite ends of the spectrum: Intellectual Property (IP) Rights versus Creative Commons Zero (CC0).
Intellectual Property Rights (IP): The creators retain the rights (or can assign the rights) to their original art / content / creation. Basically, it’s not free to use by anyone/everyone without the permission of the IP rights owner.
Creative Commons Zero (CC0): The creators do NOT retain any of the rights to original art / content / creation. Anyone can use the art / content / creation as they see fit. This is akin to Open Source.
CC0 or IP: there is a time and place for either
So is CC0 better or is IP better for NFT communities? Honestly, I can see both sides of the argument.
Let’s start with CC0.
CC0 makes sense if:
Whatever collection you are releasing benefits from a (grassroots) movement. CC0 is less restrictive, which can drive greater participation and involvement.
You want to create a brand for your project through involvement from others. The more others copy the original work, the bigger the original brand becomes.
You or your community like derivative projects.
CC0 is also aligned with the Web 3 Composability ethos (see Chris Dixon’s tweet thread). The original creator creates a piece of art or content, then the derivative creator “remixes” it and adds their spin on it. The idea is the original piece of art also increases in value because now the derivative is also “doing the work” of bringing a spotlight to the original.
When CC0 is at its best, it enables competition to evolve to cooperation… Win-Win Scenario.
This may come about through: derivative works where more people build on top of original art, expand the community and build the brand together. CC0 theoretically should bring about a Derivatives Summer.
Now onto IP Rights.
IP Rights makes sense if:
You / your company / community are already the market leaders, and you want to reinforce the exclusive feel of the brand (e.g. supply and demand thinking).
The original creator wants the most creative control (has opinions on specifics, wants to be involved in the details, etc.) in influencing the trajectory of the brand.
You want to keep your community more niche and focused and/or you want to create an exclusive club.
IP is the model that largely exists today and what many industries depend on. The entertainment industry works this way. You create IP and then you own it for some amount of time before it’s up for open source and creative commons. Then anyone gets to monetize on top of that IP in any way they see fit.
Like most things, it’s important to ask what a blended approach can look like.
How would CC0+ or CC0++ or IP- work?
And perhaps there is a world where communities break down all the different elements to these rights and pick and choose the ones they want for their community.
Decision to change post-sale
What is more challenging is changing or updating the rights after the sale… because you now need to answer more questions like:
Who has the right to change the rights?
What level of participation do we need to enact this level of change?
Is “participation rate” even the right framework to enact this kind of change?
There are many ways to look at this, but the question is simple.
Whose right is it?
Say a project team sells NFTs and states that once you buy the NFT, you own the rights to the underlying art and can do whatever you want with it.
When a buyer buys this NFT, they are expecting the IP rights to transfer.
Then the project team (later on) changes the rights and says all the NFTs are now CC0.
As a buyer, you might be wondering: can the project team just change the rights like that? I mean I’ve already bought the NFT…
The buyer is likely to see that post-sale, only they have the rights to do whatever they want with the art (esp. if the rights transferred to them at the initial sale).
The project team may feel they can make that change because they believe there are some natural Creator rights they retain no matter what.
Disclaimer: not a lawyer and none of this is true legal analysis. Just reasoning with some logic. 😁
These are real issues that project teams will have to think through and design prior to launch. The reality is a project team will launch a collection at an early stage, involve a bunch of people by way of a community, and at some point, someone will want to change or update some parameter.
But has anyone bothered to outline and communicate:
What can be changed? How?
What cannot be changed?
What should be hard to change?
What should be easy to change?
So on and so forth
This means it’s important to get to this level of design for holder rights, otherwise there may be confusion among the community and holders on what rights they have.
It’s not so easy to find a middle ground. IRL different countries have different IP and property rights frameworks, so which ones take precedence?
And even if you can enforce it in an IRL framework… is it efficient to?
Digital Property Rights (and UX) in the Metaverse
And of course, how will this work in the Metaverse?
Today, even in a largely 2D Metaverse, digital/intellectual property rights matter. Imagine a fully rendered 3D digital world where we spend most of our time. How much more important will this topic be then?
Since the Metaverse is immersive, the bar for good user experience will continue to increase… Digital property rights will be influence the UX discussion as well.
Let’s say in the Metaverse, you use your animal jpeg NFT as your rendered avatar. But the jpeg NFT is CC0 (and because the animal jpeg NFT is cool), you find 10 copies of that image on rendered avatars as you walk through the Metaverse.
In an immersive experience like the Metaverse, that is going to be confusing.
Sure we can verify that you indeed do own your NFT… that part isn’t hard.
But visually you see 10 copies of these things running around. Are we going to want to visualize 10 copies of an NFT?
From a user experience / user interface experience, this sounds horrible… and disorienting. It’s not the world we are used to… we are used to uniqueness IRL.
Let’s say you are on the other side and believe the IP approach is the right one, then you might believe that in the Metaverse, they can just censor the NFT copies and make it appear to the player (owner of real NFT) like the copies are not there.
Maybe this is better from a UX/UI perspective… but now this just became a censorship decision.
And this is a slippery slope: if you can censor this, then you might be able to censor anything, theoretically speaking (not necessarily practically speaking)… which means it might not be an open Metaverse anymore.
Yes… a lot of nuances to figure out before we can go from 2D digital into a massive fully rendered 3D world.
Digital Property Rights have become an important design element and underpin the Web 3 and NFT ideals of ownership.
The above example sheds light on a nuanced point, but more broadly what is important is this: whatever frameworks and structures we are figuring out today will need to be adapted again once we go live in the Metaverse.
The Metaverse adds another element to the complexity because the (1) user experience will be vastly differently than what we have today and (2) the Metaverse may not follow the existing (legal) frameworks for IP versus CC0.
Ultimately, each community must decide and accept the rules of engagement that works for them. I.e. what Digital Property Rights look like in the Metaverse may actually get decided by communities versus defaulting to an existing (IRL) framework.
There needs to be a whole design space that focuses on the “not-so-front-and-center… but highly important” design choices, like digital property rights.
After all, innovation like the Metaverse is often not just about technology, the human systems (digital property rights) and how humans interact with each other is just as important!