Minting and Transfer of NFTs and Impact Thereof on the Author’s Economic Rights

Asst. Prof. Dr. Osman Gazi Güçlütürk*

Non-fungible tokens (“NFT”) are increasingly associated with collection of digital copyrighted works. NFTs are, in essence, crypto assets circulating on a blockchain. The infrastructure of the blockchain technology and the technical restrictions thereof render storing actual digital works on a blockchain impractical and prohibitively expensive. In order to address this challenge, different storage and association mechanisms are created. Depending on the preferred mechanism, minting an NFT that is associated with a copyrighted work could require undertaking actions that may fall within the scope of the author’s economic rights provided under the Law No. 5846 (“FSEK”), particularly the right of reproduction and the right to communicate to public. Under FSEK agreements or disposals concerning economic rights are subjected to a set of specific provisions, which require any such agreement or disposal to be in writing and explicitly refer to the economic rights concerned.  In the absence of such a separate agreement, owning an NFT does not grant any right on the associated copyrighted work. Nevertheless, like other crypto assets, NFTs can be structured in various forms. Hence economic rights that become relevant during the minting or transfer of an NFT should be examined taking into specific circumstances of each NFT-related transaction as well as the applicability of the copyright exceptions into account.

For the full text of this blog post in Turkish, please click here.

Keywords: NFT, crypto assets, blockchain, economic rights, copyright

(*) Boğaziçi University Faculty of Law, Department of IT Law