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I Want to Sell NFTS – My Rights as an Artist
The Law Gorgeous - Episode 4
Art Expert 11 May 2021

The Law Gorgeous is a new column by TheArtGorgeous where columnists and art lawyers Alana Kushnir and Yayoi Shionoiri answer your art world questions.  Email your art x law worries to [email protected]

I want to sell NFTs, and want to understand my rights as an artist.

Ahhhhh…..you and the rest of the world! There are definitely some pluses to minting and selling NFTs, as well as some questions. So, let’s dive into it. From a 3,000-foot perspective, there are surprising similarities between the traditional art world and the NFT crypto art world. The idea of property ownership used to feel anachronistic to the interwebs, but, dropping unique NFTs that can only be owned by one collector feels like value is again being placed on “things.” The rarity aspect ensures that collectors get excited to own one of your works. Further, the legal frameworks that could apply to NFTs, such as copyright and securities laws, are pre-existing bodies of law.

All that having been said, we think one of the main differences is the likelihood, in fact, perhaps even the expectation that the work will be re-sold, and pretty quickly after it’s initially purchased. In that sense, you need to be prepared that the monetary value of your NFT may fluctuate up and down quite rapidly, and there may be a chance that owners of your NFT are not collecting it because they love your artistic practice.

As always, when you participate on a digital platform, it’s important to understand the platform’s terms and conditions of use/service (the “T&Cs”), which cover the conditions by which you mint and sell your work on the platform. Do the T&Cs require you to share certain rights with the first purchaser and subsequent purchasers of your NFT — for example, do they have the right to show-off their purchase by uploading a JPEG of your work on Instagram? Can they lend the digital image of your work to a museum exhibiting NFTs? Can they adapt the digital image of your work into a variable medium? In a separate and unfortunate scenario, what happens if you discover another artist has taken your artwork and minted it as their own NFT — do you have recourse against the platform? If the platform agrees with you to takedown the NFT but it has already been purchased by someone, what rights does this first purchaser still have?

Besides wanting to become the Grimes of the art world, what do you want to get out of the NFT process? The ability to experiment with a new medium, and the possibility of reaching a new audience both feel like amazing positives. In addition, if the platform allows for royalties on secondary sales, notwithstanding any legislated rules on royalties (or lack of such rules in your jurisdiction), you would be able to receive the benefit of the appreciation in price of your work.

It’s not all rosy, though. Here are some flags you might want to think about. If you don’t yet trade in cryptocurrency, you’ll need to get pretty fluent in using this type of currency (generally Eth) to participate in the platforms, which means, everything from downloading a digital wallet (or several) and ensuring their security. You also want to be aware of any gas fees that are charged to perform the transaction on the network, in addition to any commissions which the platform receives for each sale (for e.g., OpenSea says that it charges 2.5% from the seller; and Nifty Gateway says that it charges 5% + 30 cents of every secondary sale, and appears to charge a fee on primary sales). If you’ve made a sale (congratulations!), you want to understand how you pull your money out (and in what currency). Finally, the resale royalty may be a right afforded to you via the platform (and not automatically executed by smart contract), so you want to understand how you can benefit from this right (and how it can be enforced). You may also wish to understand what happens to your NFTs if the platform ever decides to close down or move on (for e.g., the Nifty Gateway terms of use appear to be pretty standard in the sense that it tells users to use the platform at their own risk).

Finally, we think it’s important for you to understand the crypto art ecosystem (and learn from your peers in the space) and also think about how creating NFTs adds to or affects your artistic practice. As a unique creator, you should do it if it feels right to experiment and add to your practice, rather than doing it just because everyone else is. Good luck!

This article is of a general nature only and should not be considered specific advice.

Yayoi Shionoiri is an art lawyer and the Executive Director of the Chris Burden Estate and the Nancy Rubins Studio. Find her on Instagram here and at her website here. Alana Kushnir is the Founder and Director of Guest Work Agency, an art law and advisory firm based in Australia but international in reach. She is also the Principal Investigator of the Serpentine’s Legal Lab. Find her on Instagram here and LinkedIn here.

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