Joint Work vs. Work for Hire: Dispute over the First NFT House

 by Shekinah Apedo

Dubbed by Architectural Digest as the world's first digital NFT home, Mars House, sold for $512,712 on SuperRare in March. Shortly, after the sale, the project's 3-D modeler, Mateo Sanz Pedemonte, claimed copyright ownership for his contribution. Specializing in modelling digital homes, the Argentine freelancer rendered the Mars House using Unreal Engine and states he created the work combined with the artist's direction. The artist, Krista Kim, refutes his claim as co-author and states he was contracted and compensated for the 3-D visualizations. How can NFT artists avoid this common dilemma?

Under copyright law, there is a difference between joint work and work-for-hire agreements. If the wording in the contract stipulates that this is an artist collaboration, then there's a co-authorship, but if it's a work-for-hire, then the hiring party has sole copyright to the finished product. To break it down in legal terms, a joint work is defined as "prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole." (17 U.S.C. § 101) A work-for-hire is something created by an employee or independent contractor during the course of employment. Section 101 of the Copyright Act also defines it as a commissioned work, "that the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire."

For a joint work, the default split is 50/50, unless the artists decide otherwise in writing. And, if two artists complete the work and share in profits, who has the right to license? The way it works is both have the right to grant a nonexclusive license to a corporation or product manufacturer who desires to exploit the work. For the nonexclusive license, Artist A doesn't need to ask Artist B for her/his permission. But, in order to give an exclusive license or transfer the copyright, both artists must be in agreement. These default positions under copyright law can be altered by the artists, but it has to be in a contract.

Collaboration is common in the artist community and usually legal contracts are avoided, but with fast paced growth in the NFT market, it's essential to have ownership and licensing rights clarified in writing before the art is created. Additionally, 3-D modelers and other specialized digital artists who contribute to the main art, can and should negotiate their potential share of intellectual property rights, so that they can earn royalties on a piece that sells well. Reoccurring payment is always better than the one-time check. For more on identifying works covered by copyright registration or to learn about registering a copyright for a visual arts work, click the preceding links.

The contents of this blog are for informational purposes only and may not be relied on as legal advice.