Did you not buy the JPG when purchasing an NFT? From the ambiguous ownership rights of the Bored Ape Yacht Club (BAYC) to the clarification of copyright rules in Koda.

Elon Musk, the founder of Tesla, changed his Twitter profile picture to BAYC Bored Ape without warning on the afternoon of 5/4, sparking discussions within the crypto community and causing fluctuations in APE token prices. Some even threatened legal action against Musk for alleged copyright infringement, although it was later clarified as a joke.

This article will summarize the actual images used by Musk, the "property description" for BAYC Bored Apes collectors, and the rule changes under the new Otherside series: Otherdeed, Koda, to discuss the rights received by NFT collectors.

Note: The author of this article is not a legal professional, and the views expressed are for reference only.

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Elon Musk Avatar: Preview for Auction, Not NFT

On May 4th, Elon Musk changed his avatar to a Bored Ape Yacht Club (BAYC) image, shortly after tweeting, "I don't know... looks the same." Note: Homogeneity, fungibility, contrasted with the non-fungibility of NFTs. Following a rapid surge in the APE token price, it subsequently dropped again. By May 5th, Musk had changed his avatar to something else. Such behavior is not only related to Bored Ape, but in the past, there have been ambiguous posts regarding Bitcoin and Dogecoin, causing price fluctuations.

So what is this image exactly?

Actually, this image originates from a September 2021 auction at Sotheby's, titled "Ape in!", where a preview image for the auction of 101 Bored Ape Yacht Club apes was designed by Sotheby's head of art creation, Michael Bouhanna. After Musk used it as his avatar, Bouhanna expressed his hope that Musk would remove it as it was created for the auction or at least mention him; he would also be willing to provide the original image to Musk with the consent of the collectors.

From this, it can be understood that this auction preview image was created by Michael Bouhanna at a time when the collectors did not object, and since the image also includes the trademark of the entire BAYC series in the bottom right corner, the developer Yuga Labs did not oppose its use. More importantly, it's not even an NFT.

After the auction, a total of 101 BAYC apes were transferred to new collectors through two transactions 1,2 with a closing price of $24,393,000. Today, one BAYC is priced at 116 ETH, approximately $340,000, and many of the buyers at that time have resold.

Official BAYC Bored Ape Yacht Club Collector's Rights Statement

Yuga Labs, the creator of BAYC, explains the openness of its copyright on the website, officially stating that once a collector purchases the NFT, they fully own it, including the artistic content. In one of the three clauses, it uses "completely" to describe all ownership rights.

The ownership medium is an Ethereum smart contract, and the creator cannot seize, freeze, or alter the ownership of any BAYC under any circumstances.

Yuga Labs also states that collectors can use the artistic content for free. Collectors do not need to pay any royalties when using, copying, or displaying BAYC artwork, as long as it is for the following purposes:

There are no restrictions for commercial use. Yuga Labs authorizes collectors to use, copy, and display purchased artwork and derivative products worldwide, such as T-shirts, without restrictions on profiting from these activities.

It appears that Yuga Labs grants individual NFT ownership entirely to collectors, with few detailed provisions, as set in the early days of BAYC's lack of popularity in 2021.

However, according to a legal expert, the first clause stating "the art" does not grant the holder copyright ownership but certain rights over the artwork itself. It is akin to owning a physical painting, where in the case of NFT digital avatars, it might pertain to other rights such as digital naming rights.

Subsequent MAYC Series Addendum

However, in the new MAYC series featuring Mutant Apes, there are more detailed regulations: you have individual NFT rights, but not the overall IP intellectual property.

"Aside from the artistic content rights, collectors do not have rights to Yuga Labs' trademarks and other intellectual property, applicable to BAYC, BAKC, MAYC, and related trademarks. All rights belong to Yuga Labs." This clarifies the ownership attribution not previously explained by Yuga Labs, with more detailed provisions in the terms.

Otherside Founder Koda's Rule Changes

Within Yuga Labs' metaverse project Otherside, the sale of Otherdeed lands just concluded, with the original character Koda being very scarce. From the Otherside website, we see more detailed rules regarding Koda's rights:

"Upon acquiring Koda, buyers have all personal property rights to that Koda, including the freedom to buy, sell, transfer, and use the Koda for any purpose. However, these rights do not include intellectual property rights for the artwork itself."

While commercial use is still allowed, Yuga Labs states that they reserve the right to terminate the owner's rights in case of illegal activities or transferring to unauthorized parties.

In the new series, Yuga Labs lists more detailed provisions, including the rights of collectors to assert their rights over derivative products of their owned collections.

Most importantly, Yuga Labs clearly states: you have a "non-exclusive license" for the NFT. This means that although Yuga Labs retains intellectual property rights, they also authorize you to share common rights to that Koda.

"You have a non-exclusive right non-exclusive right）, and can file a lawsuit when your ownership rights in the kodaand related artwork are infringed upon, but are not obligated to do so. We are not obligated to support such actions, but we may decide to do so."

Collectors can claim intellectual property rights protection for derivative works of their Kodas: "You have the right to register or protect intellectual property rights for all derivative works of your Koda, while Yuga Labs still retains ownership of the artistic creation."

Yuga Labs states that the artwork is "authorized" rather than "resold," and they retain full ownership, interests, rights, and intellectual property.

Furthermore, it may be speculated whether the initial buyer from Yuga Labs, Buyer A, still retains the same rights after selling or transferring in the secondary market. The terms clearly state: "This agreement is transferable to both parties and their allowed heirs and assignees, especially any permitted assignees, is binding and in their interest."

Did Buying NFTs Really Not Get You a JPG?

If BAYC represents Yuga Labs' most open rights terms, transitioning to slightly more detailed MAYC and ultimately to the most restrictive Koda can be interpreted as Yuga Labs professionally establishing legal provisions after realizing its brand influence.

Even with the most restrictive Koda having clear regulations, collectors are granted common rights, including personal and intellectual property rights, and the ability to enforce their rights in case of infringement.

So, did buying an NFT really not get you a JPG?

Under Taiwanese law, there are general licenses, exclusive licenses, and exclusive licenses, different levels of copyright licensing mechanisms, according to Yuga Labs' agreement, NFT collectors do have the right to enforce some rights.