How to NFT

So you want to join the NFT hype. Maybe you have an unpublished photograph lying around. Maybe you published an image years ago that people loved and you would like to tokenise it. Maybe you modelled in a photoshoot and you would now like to add ‘NFT aficionado’ to your influencer repertoire. In any case, you want to create an NFT of an image. How do you go about this? Whose permission do you need? Essentially, how-to-NFT?

The process: blockchain and marketplaces

NFTs can be used to represent essentially any type of item, real or intangible. Currently they are predominantly used to represent (digital) artworks and video-game items, but the possibilities are endless. They can be used to represent vintage watches, music or even real estate. This blog will focus on photographs, as their characteristics (specifically, the fact that they show other people) require some special attention.

The process of creating an NFT is relatively straightforward. There are a couple of decisions you have to make. The first is which blockchain you would like to publish your NFT on. Ethereum is the leading blockchain for NFTs at the moment, but there are a number to choose from, such as Wax, Voice or Binance Smart Chain (BSC). Each blockchain has its own NFT token standard, meaning that your choice limits the available wallet services and marketplaces to those compatible with that blockchain. For example, the OpenSea marketplace works with Ethereum and you will need an Ethereum wallet that supports the Ethereum-based NFT token standard, ERC-721. You will not be able to offer an NFT minted in this way on Binance NFT, which is based on the BSC blockchain.

Most marketplaces have an easy-to-follow creation process for NFTs. You will have to connect a compatible wallet, after which you can create a collection of NFTs by simply uploading the image or images you wish to mint. Some marketplaces charge a small fee. There is often the option to add specific extras, like unlockable content for the purchaser.

To sell your newly minted NFTs, you then work through the marketplace’s steps. You have to decide how much to ask, which cryptocurrency you prefer, whether to sell the NFTs at a fixed price or by auction and whether you want royalties on future sales.

In short, if you have a blockchain wallet and can navigate a website, you can create and sell NFTs. The tale does not end there, however. The marketplace does not check your uploaded image for copyright or neighbouring rights infringements. So, before you upload anything, you should make sure that you are entitled to do so. We will discuss what this means in the case of photographs.

Copyright and photographs

How are photographs protected? Like any art form, photographs enjoy automatic copyright protection for the author, but only where the photograph is ‘original and the author’s own intellectual creation’. That bar is rather low, and in most cases even a holiday picture will be protected as long as the author can show they gave some thought to composition, light, angle and so on. In most cases the author will be the photographer. It is possible, though, that the copyright will have been transferred.

There may also be other authors. Someone who has edited the photograph and can show that they made deliberate artistic choices (again, such that the result is original and their own intellectual creation) may also enjoy copyright protection in their adjustments. That depends on the particular image.

Authors have the exclusive right to reproduce a work, to communicate it to the public and to distribute it. So if you are not the author of a given image, you will need explicit, prior permission from the author or authors before you publish it. We will discuss whether minting an NFT amounts to publication in the next section.

In addition, if the photograph depicts one or more people, those people may have image rights. Under Dutch law that is always the case where the photographer was commissioned by or on behalf of the person depicted. If someone hires a wedding photographer, for example, the couple and the guests appearing in the pictures may be able to stop the photographer from publishing their image.

Even where there was no such commission, the people depicted may object to publication if they have a ’legitimate interest’ in doing so. So, depending on the photograph, you may also need permission from the people in it.

Is minting an NFT a publication?

We have discussed in a previous blog when an NFT could infringe copyright. A short summary: it depends on whether the NFT itself depicts or contains the protected image. In the case of photographs, NFTs will hardly ever contain the image itself, as it is expensive to include large files on the blockchain and digitised photographs tend to be high-resolution.

In most cases an NFT will merely refer to an image. Generally the NFT will contain a hash and metadata pointing to it. The question, then, is whether that amounts to ‘publishing’ within the meaning of the Dutch Copyright Act (or a communication to the public, in EU terms). That question turns on the public: specifically, whether minting an NFT makes the image available to a new public.

As always, this depends on the particular circumstances. Is the photograph already published online? If so, is it behind a paywall or freely available? If the image is already lawfully published elsewhere, a hyperlink typically does not constitute an additional communication to the public requiring the rightholder’s consent, since there is no ’new public’. So one could argue that minting the NFT did not make the image available to anyone who previously had no access to it, and therefore does not infringe the copyright holder’s exclusive rights. Technically an NFT just points to a file. And it is that “pointing” identifiable position in the blockchain database that is sold, not the picture itself in any way. The picture just sits there, available to all. On the other hand, even if linking to the original material were not a communication to a new public, the NFT route is plainly something other than simply publishing a hyperlink to public content on the open internet. We cannot be sure, then, that the courts will apply the freedom to hyperlink in these particular circumstances.

And if one were free to mint public content, mind the image rights: a person depicted in a photograph could also object to an NFT being minted without their permission. Say you have taken a photograph of a celebrity and have minted NFTs referring to that photograph, which you sell for €5,000 apiece without asking them. A commercial interest, or a wish to protect their good name, is likely to amount to a legitimate interest on the celebrity’s part. So you probably need their permission before you proceed.

In short

The legal position around NFTs is still rather opaque, and most questions do not yet have definitive answers. It makes sense to proceed cautiously and to secure the rightholders’ permission. First, before you publish anything, make sure you know who the stakeholders are. Who holds the copyright in the photograph? Are there any image rights? And if you are not the author, then whatever the exact legal position, exploiting someone else’s work is questionable in itself. That said, as long as the image is already publicly available and the NFT contains nothing more than a hyperlink to it (or its functional equivalent), you could argue that this does not infringe the author’s copyright, as set out above. So there is a fair chance you can go ahead.

Then, once you have cleared the rights or decided whether or not to take your chances, you only need your crypto wallet and a marketplace of your choice, and you can start minting.

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In cooperation with Saar Hoek