73 Am. U. L. Rev. 67 (2023).

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Abstract

This Article sets forth the theory of decentralized collaboration to explain how NFT projects coordinate business and creative collaborations in a decentralized manner through NFTs. Conducting an empirical study of the Top 25 NFT projects, this Article shows that a majority of the Top 25 NFT projects have employed a new, more innovative approach to creative production. Decentralized collaboration refers to the creative activities among unrelated actors who are involved in creating a shared content production project through a decentralized, asynchronous process open to the public. Utilizing a combination of smart contracts that create non-fungible tokens (NFTs) recorded on blockchain and intellectual property (IP) licenses setting forth rights for the NFT owners to use the associated content, such as visual characters, a substantial majority of the NFT projects have adopted a far more permissive approach to IP licensing granting the NFT owners the right to commercialize the artworks, including by making derivative works. The NFT owners who commercialize the artwork get to keep all their profits. Simultaneously, most of the Top 25 NFT projects still impose some restrictions, such as a prohibition against using the project’s trademarks to prevent the potential abandonment of trademark rights. This innovative approach to creative production—in which startups enlist their customers to become cocreators, who receive commercial rights to monetize the artwork identified by NFTs—is a dramatic change from the traditional All Rights Reserved approach of the major media industries. Proponents of this more permissive approach believe it has greater potential for empowering creators and maximizing the Internet for creativity. 

* Professor of Law, Illinois Tech Chicago-Kent College of Law.