NFT Art Licensing Issues Quiz

1. What is the primary concern regarding NFTs and copyright?

• The transparency of transactions.
• The risk of copyright infringement.
• The management of smart contracts.
• The regulation of digital currencies.

2. What happens if an NFT is created without the copyright owner’s permission?

• The NFT becomes untransferable.
• The NFT is worthless.
• It is automatically deleted.
• Infringement has occurred.

3. Who owns the copyright for the work represented by an NFT?

• The platform that sells the NFT.
• The NFT creator, not the copyright owner.
• The copyright owner, not the NFT buyer.
• The last buyer of the NFT.

4. Can the buyer of an NFT use the work commercially without infringing on the artist’s copyright?

• Yes, always permitted by default.
• No, unless additional licensing options are granted.
• Yes, if they hold a physical copy.
• No, only if the artist allows it.

5. What rights are typically granted to the buyer of an NFT?

• Rights to alter the original artwork without permission.
• Rights to resell the NFT without any restrictions.
• Rights to display, copy for incidental purposes, and create derivative works, but not necessarily commercial exploitation.
• Rights to use the work for unlimited commercial gain.

6. How do platforms address potential copyright infringement issues?

• Platforms like OpenSea invite rights holders to submit complaints and will take down works in response to formal infringement claims.
• Platforms ignore reports of infringement unless the original artist requests action.
• Platforms review all user content and approve it before listing.
• Platforms automatically grant copyright to NFT buyers without conditions.

7. Who can sue for copyright infringement related to an NFT?

• The artist or original copyright owner.
• The buyer of the NFT.
• Anyone who views the NFT.
• The platform that sells the NFT.

8. What are the implications if an artist creates digital works based on an original work under an employment arrangement?

• The employer owns the copyright and the right to create derivative works.
• The copyright is shared equally between the artist and employer.
• The artist retains all rights to the original work and derivatives.
• The employee must get explicit permission from the artist for all uses.

9. What statute protects visual artists` rights in their work?

• The 1990 Visual Artists Rights Act
• The 2010 Copyright Improvement Act
• The 1985 Digital Rights Act
• The 1976 Fair Use Preservation Act

10. Can an NFT be used to attribute a work to the artist?

• Yes, they can replace traditional copyright claims.
• Yes, but it must comply with the Visual Artists Rights Act.
• No, NFTs cannot represent any ownership.
• No, an NFT only represents a digital token.

11. What are the risks associated with minting an NFT?

• The seller is protected from any legal issues during minting.
• Only the buyer`s rights are at risk during the minting.
• Risks include minting the wrong NFT or omitting information.
• Minting an NFT is always risk-free if done properly.

12. Who maintains the blockchain and is responsible for policing it?

• The government agency overseeing digital currencies.
• The users who generate the NFTs.
• Independent auditors hired by the creators.
• The platform or designated entity responsible for maintaining the blockchain.

13. What happens if the platform fails to police the blockchain?

• Users will automatically gain more rights to the NFTs.
• Potential infringement claims and legal action.
• The platform will experience no consequences.
• The blockchain will self-correct and maintain order.

14. Are there any specific laws governing the sale of an NFT?

• There are strict federal laws governing all NFT sales.
• NFTs are completely unregulated by any law or guideline.
• NFTs are treated the same as physical goods under all circumstances.
• Uncertainties exist, with UCC Article 2 sometimes applied by analogy, but state common law and express contract terms often override these provisions.

15. How should platforms address artist-imposed future resale royalties?

• Platforms should manually process royalties after each sale.
• Platforms should include terms in agreements to pay resale royalties.
• Platforms should ignore artist requests for royalties entirely.
• Platforms should charge artists a fee for future royalties.

16. Is the collection of resale royalties handled by the platform or blockchain?

• The collection of resale royalties is reliant on manual processing by artists.
• The collection of resale royalties is managed by a government agency.
• The collection of resale royalties is facilitated through traditional banks.
• The collection of resale royalties is automatically handled by the blockchain.

17. How does an artist know when a transfer has occurred and thus a payment is due?

• The artist is notified automatically by the blockchain.
• The artist receives an email from the buyer.
• The artist waits for monthly payments from the marketplace.
• The artist checks the sales manual regularly.

18. What commercial laws apply to the sale of an NFT?

• Only copyright laws apply, without regard for commercial implications.
• All NFT sales are governed by international trade agreements and treaties.
• Principles of good faith, fair dealing, conscionability, and commercial reasonableness are applied to avoid unfair results.
• Consumer protection laws exclusively govern NFT sales and transactions.

19. In the event of a dispute over an NFT, can the current owner pursue the artist rather than the sales platform?

• No, only the sales platform can be pursued.
• Yes, the current owner can pursue the artist.
• Yes, but only if the NFT is stolen.
• No, all disputes must go through the blockchain.

20. What are the implications of NFTs on copyright law?

• NFTs do not change the operation of copyright; the underlying work is protected by copyright, which can be retained or transferred.
• NFTs grant full ownership of the underlying work to the buyer.
• NFTs allow anyone to use the underlying work as they please without restrictions.
• NFTs automatically eliminate all copyright issues related to the digital work.

21. Does a smart contract need to specify who owns the copyright if a platform mints an NFT of digital art?

• No, it`s not necessary to specify ownership.
• Yes, but only for physical art.
• No, only artistic intent needs to be specified.
• Yes, it should specify who owns the copyright.

22. Who needs permission to display an NFT image for public viewing?

• The platform typically needs permission from the copyright holder of the underlying work, not the owner of the NFT.
• The artist always needs permission from the platform.
• The NFT buyer needs permission from other collectors.
• Anyone can display it without permission.

23. Can an artist license their rights exclusively to the NFT owner?

• Yes, an artist can license their rights exclusively to the NFT owner.
• No, artists cannot license any rights.
• Yes, but only if the platform consents.
• No, the NFT owner has no rights.

24. What rights should be protected from the purchaser of an NFT if the artist plans to create derivative works or reproductions?

• Rights to create derivative works and commercially exploit the artwork should be protected.
• Rights to destroy the original artwork at will.
• Rights to sell the original artwork without restrictions.
• Rights to alter the artwork`s original content freely.

25. What are the implications of using Creative Commons licenses with NFTs?

• Creative Commons licenses restrict all use of the artwork linked to the NFT.
• Creative Commons licenses automatically grant full copyright ownership of the NFT to the buyer.
• Creative Commons licenses can be used to share or give away all rights to the artwork linked to the NFT.
• Creative Commons licenses have no effect on the rights associated with NFTs.

26. How should license terms be designed for NFTs?

• License terms should consider rights to display, copy for incidental purposes, create derivative works, and commercially exploit the artwork.
• License terms should restrict all commercial use of the artwork.
• License terms should grant full ownership rights to the NFT buyer.
• License terms should not address any rights related to the artwork at all.

27. What are the risks associated with transferring an already minted NFT?

• Transferring NFTs guarantees copyright transfer.
• All sales are final and cannot be contested.
• Risks include hacking, theft, and counterfeiting.
• Transferring NFTs is entirely risk-free.

28. Can an NFT be used to enforce terms or prosecute breaches for first or subsequent sales?

• Yes, but only for the first sale, not subsequent sales.
• No, NFTs are not legally binding for any sales.
• No, they cannot enforce any terms or prosecute breaches.
• Yes, but assurances must be given to identify purchasers to enforce terms.

29. Are union rules implicated in NFT sales?

• No, union rules have no bearing on digital art sales.
• Yes, but only for physical art pieces, not NFTs.
• No, union rules are irrelevant to any sales process.
• Yes, union rules like SAG-AFTRA Basic Agreement Par. 22A might be implicated.

30. Can NFT cash flows be implicated in sanctions placed on persons related to the Russian Federation?

• No, NFT cash flows cannot be implicated in sanctions.
• Only physical assets can be implicated in sanctions.
• Sanctions only apply to traditional banking transactions.
• Yes, NFT cash flows could be implicated in sanctions.