Intellectual Property Rights (IPR) in Crypto: Is Everything Free and Open?

15 Apr 2024

Cryptocurrencies and their related products and platforms are famed for being open and free for everyone. This is mostly true, as you can not only use but also modify and redistribute a lot of items in this growing ecosystem. However, it’s worth noting that every single piece of software or creative work has, indeed, its own kind of Intellectual Property Rights (IPR) backing it up.

First of all, let’s remember that “property” refers to any tangible or intangible possession or asset owned by an individual, group, or entity, often with legal rights of ownership and control. It’s basically the exclusive right to use and profit from the things you’ve obtained or created with your own effort.

In this vein, Intellectual Property (IP) is a category that includes all intangible creations conceived by the human intellect. They could be a lot of things, from books and songs to designs and software. Now, Intellectual Property Rights (IPR), as the name suggests, are formed by legal rights that protect those creations of the mind, granting exclusive rights to authors or owners to use and control their inventions.

In the end, if you use, share, modify, or redistribute a work (any work) protected with IPR without express authorization from its authors or owners, this could lead to serious issues with your local authorities. That may include fines, payment of financial damages, and injunctions —court orders to prohibit certain activities. Besides, in certain cases of serious IP infringement, such as large-scale counterfeiting or piracy, criminal charges can be pursued, potentially resulting in imprisonment.

Now that you know this, it’d be better to always consider that not everything in crypto is free and open. Every platform and product has different permissions (IPR types) to use and share.

Copyright is likely the most known word regarding intellectual property, but it’s not the only legal right in the field. We can’t delve into every detail here, but we can discuss some well-known IPR types: patents, trademarks, trade secrets, copyright, and copyleft. Yes, that’s also a thing.

  • Patents: Patents grant inventors exclusive rights to their inventions for a set period. For instance, a pharmaceutical company might patent a new drug formula, preventing others from producing or selling it without permission for around 20 years.

  • Trademarks: Trademarks are symbols, names, or designs used to distinguish goods or services That is, legally protecting a brand. An example is the Nike swoosh, which identifies products from the Nike brand, helping consumers recognize and trust their quality.

  • Trade secrets: Trade secrets are confidential business information that provides a competitive advantage, be it internal processes, designs, or inventions. For example, the recipe for Coca-Cola is a closely guarded trade secret, giving the company an edge in the soft drink market.

  • Copyright: Copyright protects original creative works such as books, music, art, and software from unauthorized copying or distribution. An example is the novel "Harry Potter" by J.K. Rowling, which is protected by copyright, preventing others from reproducing or selling it without permission.

  • Copyleft: Copyleft is a licensing approach used for software and other creative works, allowing users to freely use, modify, and distribute the work under the condition that any derived works are also made available under the same terms. An example is the GNU General Public License (GPL), which governs the distribution of many open-source software projects like Linux, ensuring they remain freely accessible and modifiable by the community.

Software Licenses

Cryptocurrencies are software, and, depending on the platform or specific product inside a crypto ecosystem, parts of them could be (but rarely are) registered as a patent or protected as trade secrets by the companies behind —if any. Trademarks could also apply to logos, symbols, or names; while the copyright or copyleft is translated into several software licenses.

A software license is a legal agreement that grants permission to use, modify, and distribute the software according to specific terms and conditions. Copyright licenses for software typically specify how the software can be used, copied, modified, and distributed while maintaining the rights of the holder. Examples of copyright licenses include proprietary licenses, which restrict certain uses of the software, and open-source licenses, which allow for more extensive use and modification under specific terms.

Software License Types by Wikipedia

We can say that most software licenses in crypto fall into the copyleft or permissive category, though. Copyleft licenses, like the GNUGeneral Public License (GPL), require derivative works to be distributed under the same license, ensuring the software remains open and freely available. Permissive licenses, such as the Apache License, allow for greater flexibility by permitting derivative works to be distributed under any license, including proprietary ones, as long as the original copyright notice and license terms are included. Both types of licenses foster collaboration and community-driven development but offer varying degrees of freedom and restrictions for derivative works.

A common software license for cryptocurrencies is the permissive MIT License —indeed, the most popular license on GitHub. The source code of cryptocurrencies like Bitcoin, Ethereum, and Obyte are protected by this license, which reads:

“Permission is hereby granted, free of charge, to any person obtaining a copy of this software and associated documentation files (the "Software"), to deal in the Software without restriction, including without limitation the rights to use, copy, modify, merge, publish, distribute, sublicense, and/or sell copies of the Software, and to permit persons to whom the Software is furnished to do so, subject to the following conditions: The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.”

The NFTs

Non-Fungible Tokens (NFTs) could be a confusing case in the realm of IPR. Unlike cryptocurrencies, NFTs are cryptographic tokens with unique identification codes and metadata, enabling verification of ownership of digital goods rather than acting as mediums of exchange.

NFTs offer exclusivity, providing creators and owners with a means to authenticate ownership of digital assets like artworks and collectibles. This feature has led to considerations of using NFTs to protect brands from fraud and infringement in e-commerce. However, questions remain about how NFTs fit within existing intellectual property frameworks.

Traditionally, trademarks serve as indicators of the source of goods or services, while copyrights protect original works of authorship. NFTs don’t neatly align with these categories, as they primarily authenticate ownership rather than indicate a source or protect authorship. Nevertheless, NFT brands can be registered as trademarks with legal benefits such as exclusive rights and prevention of similar mark usage.

Regarding copyright, protection applies to the original works represented by NFTs rather than the NFTs themselves. According to the Berne convention, copyright protection applies automatically from the moment the work was created, but some jurisdictions offer various forms of registration that might benefit the authors in various ways depending on their laws. Additional copyright registration could further safeguard creators' rights by preventing unauthorized distribution or sale of their works as NFTs, enhancing their value and integrity in digital marketplaces like OpenSea or Rarible.

In other words: you may buy an NFT today, but that doesn’t mean you’re now the owner of the artwork itself. The author would need to assign these rights expressly in writing. On the other hand, the works that could be transformed into NFTs are limited by copyright. They’d need to be completely original or from the public domain. This way, you just can’t make an NFT collection of Coca-Cola without the express permission of Coca-Cola, for instance.

How to avoid IPR infringement in the Crypto realm?

Luckily for average users, things are often pretty clear (and free) for them. If a cryptocurrency or related platform has any additional prices or “premium” features, this will be announced loudly, and those features will be blocked for free users. Issues may appear more commonly for developers and creative builders within the space.

For teams building their own crypto projects and using open-source tools, thorough research and due diligence are essential to identify potential conflicts with existing patents, trademarks, or copyrights. Obtaining proper licensing for third-party technologies and adhering to open-source licenses are crucial steps to ensure legal compliance.

Secondly, for those who want to prevent others from using their work or branding, it's imperative to protect their own intellectual property by obtaining patents, trademarks, or copyrights for their cryptocurrency project. Implementing internal policies and procedures, providing training on intellectual property rights, and seeking legal advice when necessary, further mitigate the risk of infringement. Actually reading the terms and conditions helps a lot.

IPR in Obyte

As we’ve mentioned above, the Obyte source code is available on GitHub under the MIT License. There’s no company behind Obyte, but a non-profit foundation only tasked with distributing the undistributed GBYTEs in ways that help the adoption of the platform. The Obyte Foundation doesn’t have any control over the decentralized network.

New contributions to the code are always welcome, but this isn’t the only part of our ecosystem. For instance, our official website is subject to copyright, including trademarks for logos and symbols, and our terms are governed by the laws of Liechtenstein in case of any dispute. Dapps built within Obyte could have different terms, though. For instance, the decentralized escrow platform ArbStore is instead governed by Spanish laws. So, it’s important to check the terms of every Dapp separately.

Additionally, since it’s possible to create NFTs in Obyte as well, we have to remind everyone to post only original or public domain works to avoid any IPR conflict beyond the network itself. Other than this, welcome and enjoy our fully free and open features!

Featured Vector Image by pikisuperstar / Freepik