EDIT: we’re requesting feedback on the metadata implementation for a new view
About the NFT License Project™
At the Flow Foundation, we believe that blockchain and Web3 technology should be safe, secure, and accessible to everyone. For digital collectible NFTs (“NFTs”), this means that creators and consumers should each clearly understand the rights that are being conveyed with the products they’re selling and buying.
In the rapidly emerging world of NFTs, there is invariably confusion about what consumers can or cannot do with the digital content associated with their purchased NFTs. Just as in the physical world, creators can choose what rights consumers will have in their content, and the extent of those rights has a direct impact on the value of the associated NFT. All too often, however, content creators fail to clearly state what rights they are granting to buyers of their NFTs, and consumers are not clear about the rights that they are getting. We believe this confusion is the result of a lack of a common, accessible, and understandable set of licensing standards governing NFTs. The unavailability of such standards acts as a barrier to building broad-scale interest in and adoption of NFTs, and hampers efforts to deter perceived and actual instances of fraud.
To help solve this problem, the Flow Foundation is co-sponsoring the launch of the NFT License Project. The NFT License Project’s goal is to help operationalize an industry-wide movement to improve NFT licensing, from first sale through all subsequent transactions. Though we at the Flow Foundation would like to encourage implementation in a variety of projects on the Flow blockchain , the NFT License Project is not blockchain-specific. Anyone can use the licenses created by the NFT License Project, on any blockchain and for any NFT project, to help bring greater safety, security, and transparency to those projects. The licenses associated with the NFT License Project will be made freely available, for anyone to use.
The NFT License Project:
- Supports content creators by establishing a set of simple, short licenses they can attach to their NFTs upon creation.
- Builds upon the “Can’t Be Evil” licenses from our friends at Andreesen Horowitz (a16z) to include new licenses and other rights that are specifically tailored to meet the needs of the NFT creator community.
- Gives content creators a straightforward guide to choosing the correct license for their NFTs, based on the rights they want to give.
- Works to ensure that the licenses are Creative Commons compatible, to help benefit the entire ecosystem.
- Gives potential buyers a quick and easy way to know exactly what they’re getting when they buy an NFT by including the license details in the NFT’s metadata.
- Gives content creators the optional ability to place a small “badge” on or next to each NFT that acts as a license identifier.
- Helps to ensure the license and the same associated rights stay with the NFT throughout its lifetime.
- Will continue to evolve, as more activities migrate to the blockchain and NFT uses and designs diversify.
When a creator chooses to use a license from the NFT License Project, the license details can be conveniently included in the NFT’s metadata, on chain, which can also potentially include images/badges that we hope the ecosystem will adopt that act as license identifiers.
The NFT License Project’s goal is to create simple licenses – easily understandable by both creators and consumers – with flexibility to mix and match the rights to harness the unique qualities of each NFT project. The rights fall into five basic categories:
Personal Use Rights (NLP-PER)
This license gives the buyer personal use rights to the content. The most common license type, a grant of Personal Use Rights means that the NFT holder has the right to enjoy the content associated with their NFT for their personal use only. No commercialization of the content is permitted (besides selling the NFT itself).
Voting Rights (NLP-VOTE)
This license gives the buyer Personal Use Rights, as well as voting rights. Voting Rights might include things like allowing the NFT holder to vote to register their preference for a particular decision, event, or outcome. For example, the holder of an NFT of a piece of artwork might be able to vote on what the artist creates next.
Additional Content/Experience Rights (NLP-ACE)
This license gives the buyer Personal Use rights, as well as the right to receive additional content and/or experiences (ACE Rights). ACE Rights might include content or experiences that are only available to the holder of the NFT. For example, the holder of an NFT issued by a professional sports team might be eligible to receive free tickets to a game.
Commercial Rights (NLP-COM)
This license gives the buyer Personal Use rights, as well as full commercialization rights (Comm Rights). Comm Rights give the holder of the NFT the right to use the associated content for their own commercial purposes, without any limitation on the form of commercialization. For example, the holder of an NFT that is associated with a piece of music could use the music in a film they are producing.
Merchandising Rights (NLP-MERCH)
This license gives the buyer Personal Use Rights, as well as limited commercialization rights for merchandising (Merch Rights). Merch Rights give the holder of the NFT the right to use the associated content to create their own merchandise to sell or give away. For example, the holder of an NFT of a piece of artwork could put the art on a t-shirt and sell it.
Content creators can combine these rights for a total of twelve different licensing combinations, including:
- NLP-UTIL: This license gives the buyer Personal Use Rights, Voting Rights, and ACE Rights.
- NLP-VOTE-MERCH: This license gives the buyer Personal Use Rights, Voting Rights, and Merch Rights.
- NLP-VOTE-COM: This license gives the buyer Personal Use Rights, Voting Rights, and Comm Rights.
- NLP-ACE-MERCH: This license gives the buyer Personal Use Rights, ACE Rights, and Merch Rights.
- NLP-ACE-COM: This license gives the buyer Personal Use Rights, ACE Rights, and Comm Rights
- NLP-UTIL-MERCH: This license gives the buyer Personal Use Rights, Voting Rights, ACE Rights, and Merch Rights.
- NLP-UTIL-COM: This license gives the buyer Personal Use Rights, Voting Rights, ACE Rights, and Comm Rights.
How does this work? What do content creators have to do to use it?
- Adding a license to your NFT should be easy. With the NFT License Project, all you have to do is choose the license that suits your needs, and implement that in the underlying Smart Contract. You can also communicate your choice of license by including a bit of text stating and linking to the license in a copyright notice (e.g., © 2023; the content associated with this NFT is licensed under NFT License Project NLP-PER license [including hyperlink]).
- This could also include an NFT License Project badge for your NFT that best suits your project. Badging is another easy way to let potential buyers know that the NFT is subject to a NFT License Project license, while also informing them of exactly what rights they’re getting in the NFT’s content.
- It goes without saying that in order to use a license, you need to own or control all applicable rights in the content that you are licensing. For example, only the copyright holder (or someone with express permission from the copyright holder) can apply a license to any copyrighted content. If you’re offering Voting Rights or ACE Rights, you need to be sure that you own (or have the right to offer) the Voting Rights or ACE Rights that you are offering. If you’re not sure whether you have the right to grant a license to specific content, consult with an attorney before minting your NFT.
Why isn’t there a license that specifically allows NFT holders to create derivative works of the creator’s content (e.g. a musical remix or an artistic rendering of a photo)? Some Creative Commons licenses include that right.
It’s true that certain Creative Commons licenses allow licensees to create derivative works of the creator’s licensed content. In our experience, however, it’s fairly uncommon for NFT content creators to want to give buyers the right to modify or create derivatives of the content they’ve created. With that in mind, we’ve chosen not to incorporate a right to create derivatives into the Project’s initial set of licenses. That said, if it becomes apparent that NFT content creators actually do want to grant those rights routinely, the Project will update its licenses to include a derivative works template.
How are these licenses compatible with Creative Commons?
NFT License Project licenses were designed to be compatible with Creative Commons: meaning that if you select a license of the same type, the terms will not conflict. All you need to do is ensure that it is the same type of license so that the terms do not directly contradict one another (e.g., if you initially offered your content under a CC-BY-NC license (which prohibits commercialization), it would be contradictory to offer the NFT under an NLP-COM license (which permits full commercialization)). If you have already licensed your content under a CC license, you can still use a Project license for the NFT you create of that content, because the two are naturally complementary.
How is the NFT License Project different from a16z’s “Can’t Be Evil” licenses?
- We are grateful to a16z for releasing the “Can’t Be Evil” licenses - they started an important conversation on consumer education and licensing transparency in the NFT industry. We believe the NFT License Project builds upon the Can’t Be Evil licenses in ways that are specifically tailored to meet the needs of the NFT community.
- A16z knows about, and is supportive of, the NFT License Project and other community efforts to help increase safety, security, and transparency in NFT ecosystems.
Other licensing projects have exclusively focused on rights that are granted to the license holder (what they can do with the content), but certain NFT License Project licenses include additional benefits provided to the license holder, like the ability to vote or access additional content or experiences. Why is a license needed to convey benefits? How is that an IP issue?
The license grant(s) give the buyer certain rights in and to the NFT itself (e.g., Personal Use Rights, Merch Rights, or Comm Rights). The additional benefits covered in the NFT License Project (Voting Rights and ACE Rights) are not rights in and to the NFT itself; rather, they are benefits that accrue to anyone who happens to own the NFT. For example, if you own an NFT of a slam dunk by your favorite basketball player, you don’t need a separate license to be able to vote on what shoes that player wears to his or her next game - those voting rights are an additional benefit that accrues to anyone who owns that NFT.
If a license includes a promise of future benefits (additional content or voting rights), is that promise binding on the creator? What protects consumers from fraud?
The licenses are intended to convey the rights they grant in a clear and accessible way for both content creators and consumers. For licenses that provide additional content or voting rights, we encourage creators to provide clear information to consumers about what those additional rights are, specific to each NFT. Since no license (no matter how well-constructed) can entirely prevent fraud, we encourage consumers to only purchase NFTs from reputable sellers.
Do these licenses police creators who use content that they don’t own or control? What’s stopping a content creator from placing an NFT License Project license or badge on content that it doesn’t own?
No license, no matter how well-constructed, can entirely prevent fraud. The licenses do not include a specific enforcement mechanism, and it is possible that some unscrupulous people might try to defraud the public by granting rights in content that they do not own or control. We encourage consumers to only purchase NFTs from reputable sellers.
Can these licenses be used only for certain specific kinds of NFTs (like digital collectible NFTs) or are they applicable to all NFTs?
Currently, these licenses can be used with any type of NFT, but some of the license types are specifically geared towards digital collectible NFTs, so they won’t be applicable to non-collectible NFTs. As the NFT License Project grows and evolves, we expect that other licenses will be added to cover other use case, and other forms of NFTs.
Is the list of licenses final, or will you be updating based on feedback from creators/developers and for additional use cases that may come to light?
We see the NFT License Project and the initial offering of 12 different licenses as a starting point. We are committed to continually updating and improving these licenses to make sure they meet the evolving needs of creators and their customers.
Can a creator change the license for a NFT after minting it?
The goal of the NFT License Project is to ensure that people who buy NFTs feel safe and secure in their purchases. With that in mind, we discourage creators from swapping out licenses once an NFT has been purchased. If a creator does want to swap out a license once the affected NFT has been purchased, they should only swap it out for a license that provides more rights, not less (e.g., swapping out a Personal Use license for a license with ACE Rights).
Can any developer use these NFT License Project licenses, or are they only available on the Flow blockchain?
The NFT License Project is not blockchain-specific. Anyone can use the licenses created by the NFT License Project, on any blockchain and for any NFT project. We’d be glad for others to adopt it across the industry. Indeed, the NFT License Project’s utility benefits the more widely adopted the licenses are, and the more easily recognizable they become for customers.
Why are you doing this? How does it benefit the Flow Foundation?
We think that digital collectible NFTs are a fun and exciting way to introduce people to blockchain and Web3 technology, but that’s only true if people experience NFTs as safe and secure. We believe having a set of clear, simple license options will increase trust among consumers, and make NFTs easier and safer to buy and sell.
How are the NFT License Project licenses different from Creative Commons’ licenses? Isn’t it better for licensing standards to be managed by a non-profit?
- Creative Commons has been critical to improving understanding of copyright and licensing while encouraging creativity and collaboration across a range of mediums. We hope the NFT License Project can help do the same for the NFT sector by protecting the rights of consumers and creators while facilitating the growth of a whole new form of content.
- Creative Commons is supportive of the NFT License Project, and has identified Project licenses that are Creative Commons compatible.
- While the Flow Foundation may be co-sponsoring the NFT License Project, the Flow Foundation does not intend to manage the Project solely to its own benefit. We offer the Project to the community for their use and improvement.
If these other licenses and standards exist, why add another one? Isn’t that confusing?
- While the NFT space is relatively nascent, it is innovating rapidly. Because of that, we believe it’s important to work collectively toward increased transparency and consistency, with a common set of license terms that offer reliable, long-term benefits to buyers and sellers.
- We’re happy to have other parties engaging in this important conversation. The NFT License Project is just one way to improve the industry and increase its accessibility.