The Plans (fragment 1)

The mirrors are in flames, but they provide cooling shelter for the doves and their friends.

The title of this entry is a little sentence that I pulled out of the collective unconscious, to give to various text-to-art AIs of the kind I described last time. I’m not going to write down very many words; just wanted to preserve some of the results.

Nightcafe, after a couple of passes

https://twitter.com/ai_curio_bot

dall-e mini

Again!

AI Dungeon of course added some words as well.

A different AI Dungeon continuation and pixelated image. Whee!

And finally one I just now made with Nightcafe (one of my five free daily credits!), using the title and the modifiers “beautiful” and “watercolor”.

Beautiful Watercolor!

So there we are. For now. :)

The AIs are making visual art now!

I’ve written quite a bit here about the latest generation(s) of AIs that generate text, after reading much of the Internet and so on, and given some text to start with. I’ve played with AI Dungeon, NovelAI (which I see I haven’t blogged about much; it’s cool, and imho the UI is much better than, and the AI about as good as, AI Dungeon’s), whatever the heck is inside Replika these days, and Google’s own engine (paper is out!).

I’ve also blogged before about Art Breeder, which is cool, and lets one interact with software that includes some AI elements to make new strange (or realistic) pictures. While it uses AI, Art Breeder doesn’t have quite the wild and open-ended feel that the text generators do, because it knows specifically about certain kinds of images (faces, landscapes, etc), and it knows certain things about them (the “genes” that exist and that people who pay a certain amount of money can create new ones of), and lets you mix and match and evolve within that rather structured framework, rather than just typing stuff.

Now I’ve been playing with some visual-art AIs that are more in the generator style. These have existed for awhile (the earliest I can recall being OpenAI’s “DALL-E” (a cute pun opon “Dali” the artist and “WALL-E” the cute fictional robot)), but I haven’t noticed them being more or less freely available to lazy people until like this month.

The first one I’ll mention is the “2D” mode in AI Dungeon: paying members or something can now turn on a feature that will insert pixelated images into one’s stories, generated from the story text by (according to the help text) pixray (about which I know very little). For example:

I admit I don’t find the images especially… interesting. But the idea is at least kind of fun!

Next up is “dall-e mini” (punctuation and trademark status unclear to me). It’s very simple: you give it a word or phrase, and it displays a small grid of small images which it calls “predictions”, and which are… perhaps at least vaguely related to the words, and sometimes cool.

And yes, the reason I was prompting AI Dungeon’s GPT-3 to generate names for not-yet-created artworks up in the first image there, was so I could enter the names into things like dall-e mini, and the next one we’ll talk about.

That next one is Nightcafe, which is free to use in a relatively complex sense: anyone can sign up, and you get a certain number of “credits” to use on doing stuff, and as you hit various milestones (which come pretty fast at first; I don’t know about longer term!) you get more credits for free. Credits can also be purchased with, y’know, money. Every time you want to do a thing (create a new image, make an image higher-res, etc), you spend a credit or two.

So far, I’m having fun without having given them any money. You can see all of the things that I’ve generated so far on my profile page here, including this one generated from Ai Dungeon’s “The Discomfort” idea in the first image up there. The main things I’ve discovered that one can do so far are:

• Type in some word or phrase, with optional additions selected from a list of modifiers (like “concept art”, “surrealism”, “watercolor”), and push the button to have it generate an image. That’s how I made “The Discomfort” and “Song of Hidden Beauty” which I rather like, and some others.
• Give it some existing image (either that it generated, or uploaded from anywhere at all, for instance from dall-e mini) and choose one of a number of “style” images, and push the button to do a “style transfer” from the “style” image to the image that you gave it. See this and this, which are the same image from dall-e mini prompted with “The most beautiful thing in the world”, with two different styles transferred onto it by Nightcafe. (I don’t know if you can have it apply the “style” from one arbitrary picture to another one; that would be neat but probably harder for the engine.)
• Sort of do both, by giving it both a word or phrase and optional modifiers, and also an existing image (or more than one even maybe), and pushing a button to have it produce something derived from all of that. For instance “The Young Mother” here is a combination of this image (which looks like a pile of cloth to me, but a friend assures me contains body parts) and the phrase “The Young Mother”.
• Order a physical print of one’s image, suitable for framing and/or hanging! This is a fun thought, and I may do it eventually. It would look good with the Art Breeder image that I had put onto canvas by Google Photos the other month (did I tell y ‘all about that?) and that is now hanging over my bed.
• Produce NFTs from the images (speaking of our recent posts on that subject). This one is pretty funny, in that the NightCafe site currently has a page called “Create NFT Art”, which basically just says that you can use their stuff to produce a cool image, and then download it and use something else to make an NFT and sell it and stuff. I don’t know if this is just an amusing low-effort way to hook into the NFT hype, or a placeholder for adding a “Make into an NFT on OpenSea” button or whatever later on.

Amusingly, the relevant help / settings text on AI Dungeon says “Creation of NFTs with AI Dungeon 2D is not currently allowed”. For what it’s worth…

Anyway! This is all pretty fun. I feel like the amazingness of GPT-style text generators has somewhat worn off, and their output has a common “convincingly-worded text without any actually understanding behind it” feeling to it, although it look quite awhile for that to happen, and it’s still fun to play with now and then. And I’m already starting to suspect that the (“GPT-style”?) visual art that I’ve been looking at already has that kind of feeling to it, as though even though they can be very different, they still somehow have the same sort of vibe.

(I don’t know if I’m claiming that I could tell an AI-generated sample (of text or art) from a human-generated one in an appropriate set of blind tests. That might be interesting!)

I haven’t to speak of looked into what these things are trained on, for instance. I think to first order it’s some big dataset of images that have had words / descriptions attached to them by humans. How big is it? Are they all based on the same one? Are people looking into other things to train on? Etc etc? I don’t know! Maybe I will find that stuff all out eventually.

Meanwhile, here’s the first image I made with Nightcafe: Frightened Business Men with Lamps (concept art, film noir). Enjoy!

Update: And how could I forget, the very notable Twitterbot: ai_curio_bot? Endless AI-generated images based on phrases entered by Twitter users! With a very similar feel yet again; not sure what the backend is here either.

Smart Contracts are Neither

Not smart: the things called “Smart Contracts” fail to be smart in the same way that many similarly-named things fail to be smart. Marketing entities use “Smart” to mean, not “intelligent”, but just “has a computer in it, and does some things that might be good, and that it might not be able to do without a computer.”

So a Smart Phone is a phone that, as well as making and receiving calls and texts, also lets you get notifications of things that you don’t care about, and waste your time in pointless apps. As well as, of course, lots of good and useful things, none particularly involving intelligence. And a Smart Toaster, Smart Washer, Smart Watch, and so on are different from the usual versions primarily in that there are more ways for them to go wrong. They are “Smart”, but not smart.

The things called “Smart Contracts” are, similarly, not intelligent, but rather contain a computer (or in this case, since they are abstract entities, a computer program), and can go wrong in all sorts of new and complicated ways.

One could also say that they are “not smart” in the sense that they are not a good idea, the way that for instance joining an MLM is not smart. This would also, in general, be correct.

Not contracts: In law, a contract is a legally-binding agreement between two parties, or (more loosely) a record that demonstrates that such an agreement exists. There are various laws and treaties governing the nature of contracts, and lots and lots of case law (i.e. legal decisions, findings and what-have-you) spelling out how those laws should be interpreted in various situations.

The things called “Smart Contracts” are not contracts in this way. They are not even the kinds of things that can be contracts. They are little computer programs (much too little to be “intelligent” even in the sense that we call some computer programs “intelligent”), sometimes written in the Solidity language for instance, sometimes stored within or adjacent to an Ethereum blockchain, which get run by the corresponding platform under certain circumstances, and which can cause various operations related to the blockchain and its associated artifacts to occur.

For instance, and speaking of NFTs, a “Smart Contract” might be a program that says (once translated more or less into human language):

If a party X sends 100 dogecoins to account 12345, and account 12345 still belongs to the party associated with NFT 27FA9/JQ, then change the association of NFT 27FA9/JQ to party X, and send 15 dogecoins from account 12345 to account 87655.

where 87655 is the account of someone who for whatever reason gets 15% of the sales of some set of NFTs.

Now this is clearly not a contract. The fact that 87655 gets 15% from the NFT-sale that this program implements might or might not be a consequence of some actual contract, some agreement between two people, but it is not that contract or agreement itself. Similarly, the fact that the ownership of the NFT changes to X when X sends 100 dogecoins to some address might or might not reflect or implement some real-world contract between two people, but it is not itself that contract or agreement.

As I pointed out last time, in deciding whether or not a legally-enforceable contract exists, a court will be far less interested in what some bits inside some computer did, than they will be in what agreement some humans actually formed, what information they had, what their intent was in taking certain actions, and what they knew or had reason to know in various circumstances. None of which the “Smart Contract” tells us anything about.

Code is not law: We have recently seen some (well) amusing “Smart Contracts”, which said things like:

Withdraw from this account five times as much as the account contains, and deposit it into account XYZ.

expressed in a complex-enough way that the platform on which it was running said “Sure, okay!” and gave XYZ five times as much as the owners of the platform would have preferred. The suggestion that this was fine and dandy, since it was just the code doing what the code does, and code is law, and a contract is a contract, was not, as far as I’m aware, generally entertained, or even proposed, in this case; it was regarded as naughty at best. (Variants of this have happened several times now; this was the first one I noticed.)

Another example:

Conduct a community poll called “Do sensible things in case a scam is discovered”; if this poll gets positive votes from at least half the community, transfer digital assets worth sixty-four million US dollars from the community, to the creator of this poll.

As far as I’m aware, someone looked hard enough at the code in the poll to realize it was probably a bad idea, and got word out in time to prevent it from getting enough votes to do its thing, but since the poll / “contract” exists on the blockchain, it will in some sense Always Be There.

There are lots of examples of these, from “Smart Contracts” that create fungible assets that can be bought only from the creator and never sold (thus creating, erhm, a significant upward pressure on price until people realize what’s going on), to “Smart Contracts” that take money from anyone trying to delete a random weird thing that shows up in their inbox and pressing Okay on your typical “Allow this to forfle the mongio?” popup, to pretty much anything else you can imagine.

Not to mention more traditional attacks involving stolen private keys, trojan horses in “apps”, NFTs pointing at digital goods to which the NFT creator has no rights, and investment schemes that suddenly vanish with all of the invested funds, of which there are too many to even bother linking to; web3 is going just great is a lovely source for all of this stuff.

And my point in mentioning all of these (as well as supporting the idea that “Smart Contracts” might be not-smart in the “not a good idea” sense above) is that if the writer of any of these programs was caught and taken to court, it’s imho very unlikely that the court would find that they get to keep the money, because a contract exists in which the victims agreed to pay it to the beneficiary.

And that’s, again, because these things called “Smart Contracts” are not contracts. They are just little computer programs. And Code is Not Law.

Who am I? Who is asking?

My proto-Zen was when I was a child, and would think over and over to myself “I just don’t see how I am me!”.

I was reminded of this by a little article called “The Practice of Wonderment” in the latest Buddhadharma magazine, giving the author’s take on huatou. It started with the etymology of the word, basically “the source of speech”, as an investigation of what lies beyond words. Which resonates with my own favorite paradoxical observation, that language cannot express truth.

We ask “Who am I?”, not in order to answer it, but in order to be filled with the question.

From Dahui’s Discourse Records:

When you observe this, there is no need for effortful speculation; no need for explanations; no need to acquire any understanding; no need to open your mouth; no need to figure out some meaning to the place where you bring it forth; no need to wallow in a state of empty quiescence; no need to wait for enlightenment; no need to try to fathom the words of Chan masters; and furthermore, there is no need to [dwell] in the shell of nondoing. Instead, simply bring this forth at all times, whether you are walking, standing, sitting, or lying down, “Does a dog have buddhanature or not? Zhou replied, Wu!” When you are familiar with your practice of bringing forth this “Wu!” then you will reach a place where words and thoughts do not reach.

I posted that to Reddit, and there was some nice feedback, and also a thread with someone who seemed to be saying that asking “Who am I?” is a useless question, because we already know the answer (nothing! no one!). I replied that while it’s easy to respond to the question with some particular words, it’s a different thing to have faced the question diligently enough that you’ve gotten beyond the words, and experienced the truth.

How do we know whether we’ve in fact broken through, whether we are simply bringing this forth at all times? An easy answer is, “if you have to ask, then you haven’t” but I think that’s wrong. There are undoubtedly people who are extremely confident that they have seen through to the ultimate ground of being, and simply bring this forth at all times, but who are mistaken about that (heh, see recent post that I just now realize is related).

So even if I am (were) extremely confident, I’d want to take reasonable steps to be sure that I’m not one of those people. Talking to an actual teacher now and then might help, but that would require work in the external world (aah!). And otherwise, the best way to check seems to be continuing to ask the question.

Who am I? Who is it that asks?

More on NFTs and Copyright

Just the other day, we talked about what’s actually inside an NFT, and what you get when you “buy” one.

One of the things I wondered was whether there are any NFTs that, when you buy them, you actually get full control and ownership of the digital content associated with it; as in an actual transfer of copyright.

This turns out to be a variously interesting question! In the US, we have Title 17, chapter 2, paragraph (or whatever) 204.a which reads:

A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.

US Copyright Law

Here in the Age of Digital Everythings, it is naturally unclear just what “in writing and signed” means. Does email count as “in writing”? Does some sort of random “e-signature” thing count as “signed”? Does someone having clicked “Okay” on a box saying “Do you hereby sign this?” count?

Can copyright be transferred online?

There appears to be a limited amount of case law on this subject. You got your Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., Appeal No. 12-2102 (4th Cir. July 17, 2013), which considered inter alia

whether a subscriber, who “clicks yes” in response to MRIS’s electronic TOU prior to uploading copyrighted photographs, has signed a written transfer of the exclusive rights of copyright ownership in those photographs consistent with Section 204(a).

and noted that

Although the Copyright Act itself does not contain a definition of a writing or a signature, much less address our specific inquiry, Congress has provided clear guidance on this point elsewhere, in the E-Sign Act.

Basically the E-Sign Act says of various legal transactions that “a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation”, and qualifies that with some definitions and exceptions and stuff.

The Met. Reg’l. Inf. Sys. decision further references yer Vergara Hermosilla v. Coca-Cola Co., 2011 WL 744098, (S.D. Fla. Feb. 23, 2011), which rather casually and in passing “reasoned that allowing the transfer of copyright ownership via e-mail pursuant to the E-Sign Act accorded with, rather than conflicted with” the purpose of Section 204 up there, and was therefore okay.

Given this rather sparse case law, it seems like simply being online / electronic / digital doesn’t prevent a transaction causing a transfer of copyright. The further question, then, is whether the specific online action of buying (selling) an NFT, can do that.

Can the transfer of an NFT transfer copyright?

I will boldly state here that the answer is No. The simple fact that an API request came into some server (however well digitally signed and authenticated it was) that caused a block to be posted to some blockchain (however decentrally and securely) that led to some Solidity code being executed that in turn caused a different ID to be associated with a particular NFT, is not sufficient by itself to transfer any copyright ownership from one person (or other entity) to another.

Why not? Because what a court looks at to determine whether a copyright transfer (or other things, like assent to license terms) actually occurred isn’t anything about what happened with some bits inside a computer; rather, it’s the actual intent of some human somewhere when they took some action.

In the moderately famous Specht v. Netscape Communications Corp. – 306 F.3d 17 (2d Cir. 2002), for instance, the court was asked to decide if someone pushing the “download” button on a web page was bound by certain license terms, when those license terms were visible only if the user scrolled further down the page and clicked on a link leading to a copy of the license agreement. The license agreement started (sorry for the shouting):

BY CLICKING THE ACCEPTANCE BUTTON OR INSTALLING OR USING NETSCAPE COMMUNICATOR, NETSCAPE NAVIGATOR, OR NETSCAPE SMARTDOWNLOAD SOFTWARE (THE “PRODUCT”), THE INDIVIDUAL OR ENTITY LICENSING THE PRODUCT (“LICENSEE”) IS CONSENTING TO BE BOUND BY AND IS BECOMING A PARTY TO THIS AGREEMENT.

In the analysis of this case, the court noted various prior decisions, holding that various “shinkwrap” and “click-wrap” and “browse-wrap” licenses (love the terms) either were or weren’t valid in various circumstances.

The basic finding in Specht here is that

The case law on software licensing has not eroded the importance of assent in contract formation. Mutual assent is the bedrock of any agreement to which the law will give force.

And I would claim that the fact that a particular request came into a particular server, can never in itself prove any human’s assent to anything.

(I can imagine some argument that, because the request was signed with some human’s private key, and because that human had reason to know that they should be very careful that no other person and no piece of software ever has access to that key without their consent, that by allowing the human and/or programmatic sender of the request access to their key, they implicitly assented to anything that that key was used for. But I hope and trust that auch an argument would fail, because it’s silly.)

It depends on the User Experience

On the other hand, given what we found earlier in this post, it seems very likely that a human action that results in the programmatic transfer of an NFT, can also result in the legal transfer of copyright ownership. The human action just has to be in writing and signed (within the still-somewhat-squishy meaning of the E-Sign Act), and has to be an action that actually indicates intent and assent to that copyright transfer.

So for instance (and like everything else in this post, I am not a lawyer and this is not legal advice and you can never sue me for anything and if you do I automatically win), say that when I went to buy an NFT I got a popup saying “Do you realize that by buying this NFT you will become the copyright owner of Thing X?” and it wouldn’t go through until I pressed Yes, and also the copyright owner would get a popup saying “Ceoln wants to buy your NFT for $D and do you want to allow this, realizing that if you do you will be transferring total ownership of Thing X to them?” and it also wouldn’t go through until they pressed Yes.

In this case, I would imagine that a court would be likely, if asked, to find that copyright transfer had actually occurred if we both pressed Yes and there was nothing weird going on.

Note that this has nothing whatever to do with there being an NFT involved; that system would successfully effectuate a copyright transfer if the owner of the copyright on Thing X was recorded in a MySQL database somewhere, or even not formally recorded at all. (Although in the latter case it would be harder to prove it had happened if one party denied it.)

A more convenient and less clear case would be if the person owning the copyright clicked Okay on a popup when the NFT was minted, saying “By clicking Okay, you agree to transfer complete ownership of the copyright on Thing X to whoever buys this NFT from you in the future”, and then when someone bought it they got a popup as above, and then the NFT changed hands without any further action by the copyright owner. Is a contract like that valid and enforceable? Can you make a contract with someone unknown and unspecified, such that it takes effect without any further action by you in the future when the other party becomes known? I don’t know! One interpretation would be that the creator is actually entering into a contract with the NFT marketplace operator, agreeing that in the future they will assign copyright; but could that actually make the assignment happen automatically in the future?

Further reading

There are a few documents here and there about copyright and electronic transfer and NFTs, most of them brief, acknowledging that everything is untested, and citing various possibly-relevant cases. There are various issues that we haven’t considered here (for instance “what happens when someone mints an NFT pointing at some text or image that they don’t own the copyright on themselves?”).

Copyright transfers by email and website terms of use
You can transfer a copyright without saying ‘copyright’
What are the copyright implications of NFTs?
No, NFTs aren’t copyrights
The Rise of Non-Fungible Tokens (NFTs) and the Role of Copyright Law – Part I Part II

Or, really, you could just do a web search on “NFTs and Copyright”.

When you “buy” an “NFT”, what do you have?

NFTs, “Non-Fungible Tokens“, are a Thing. Many people are very enthusiastic about this thing. Others, not so much (I recommend pretty much everything Diehl has written in and around this subject).

Everyone knows that you can “buy” and “sell” them, and that it’s been breathlessly announced that huge amounts of money has changed hands due to people doing that (even if some of it has been just people buying from themselves to pump up prices, hem hem).

But as far as I can tell, very few people know what they actually are aside from that, and the information can be both hard to find, and significantly variable between NFTs.

Some background

They’re called non-fungible to contrast with fungible things that also live on blockchains, the most obvious being units of bitcoin and other cryptocurrencies. These are fungible, in that any bitcoin is identical to any other bitcoin, and what they are is relatively simple: they are a number that gets associated with a public / private keypair, and if you know the private half of the keypair, you can move the numbers around, transfer some of them to someone else who agrees to give you US dollars or movie tickets or illegal drugs in exchange, and so on.

(This is not 100% accurate, because in some/many situations, someone else actually knows the private keys involved, and you delegate the usage of it to them, because you trust them and you don’t want to have to fiddle around with keypairs and crypto yourself, because you’d do it wrong. But it’s the general idea. The same caveat applies to the descriptions below concerning NFTs.)

NFTs are non-fungible, in that every NFT is different in some sense from every other one. If a particular NFT is currently associated with a certain public / private keypair, that NFT is associated with only that keypair, and only the holder of the private key can transfer the association to someone else (i.e. some other keypair), again with complications that we may or may not consider below.

So far, so good. I can pay someone some money (in the form of, say, US dollars, bitcoins, etc.) and in exchange they will transfer the association of a particular NFT from their keypair to mine. Which is to say, roughly, that they will give ownership of the NFT to me.

Aside from this association, what other properties does an NFT have? Why would I want to pay money to associate one with me (with a keypair whose private key I know)?

Inside an NFT

It turns out that this depends on the exact NFT, which NFT-supporting system it’s on, which fields the creator of the NFT filled in, and some other things. But in general, the only other property that an NFT has, is that it’s associated with some string of letters and numbers. That string of letters and numbers can be just about anything, from an address on a blockchain (for digital goods that are tiny enough that storing them entirely on the blockchain isn’t too expensive) to a URL or other URI (i.e. that a thing like a web-browser might be able to use to find some digital data) to a description of some real-world item like “the property situated to the north of McLellan Road, designated as Parcel Number 47A on the Flint County Assessor’s Map of June 15th, 1987”.

So an NFT is an association between a public/private keypair, and an alphanumeric string. In common speech, if that alphanumeric string is the URI of a funny picture of a kitten, and I know the private key of the keypair (with caveats as above) I am said to “own” the picture (or “the NFT of the picture”, although the distinction is seldom observed).

Ownership is, in general, a legal concept, and transfer of ownership is generally done via a contract, either implicit or explicit. Does me knowing the private key of a keypair associated via NFT to a URI pointing at a funny picture of a kitten, actually give me any legal rights vis-à-vis that picture?

I wondered about that, and poked into it a little, originally in this Twitter thread. It turns out that the answer is complicated, and that it depends on which NFT we’re looking at.

(There are lots of other interesting issues, like what keeps the entity that controls the URI that an NFT points to from changing the data there, or just vanishing softly into the night, what powers a marketplace has over the NFTs that are sold there (“lmao nice decentralization“), how smart “smart contracts” really are, and so on, but this entry is already going to be too long, so here we’ll only wonder about what legal rights “owning” an NFT gives someone.)

NFTs that don’t grant much at all

In at least some cases that I found randomly web searching, the only right that I have to the “Art” associated with the NFT, is something like:

a worldwide, non-exclusive, non-transferable (except as specifically provided below in section 3 (b), royalty-free license to display the Art for your Licensed NFTs, solely for your own personal, non-commercial use

which is really a Whole Lot o’ Nothing. It’s roughly the same rights that you get to a video game or a music track, when you “buy” a copy online. And it’s a non-exclusive license, which means that they can sell the same thing to a whole bunch of different people.

(Although, given how NFTs work, I think they will have to create a whole bunch of NFTs pointing at the same digital data to do that; unless there’s an NFT protocol that allows a list of owners rather than a single one; EIP-721 doesn’t appear to, but who knows?)

In any case, this seems like a far cry from “ownership” in any significant and exclusive sense.

Apes with bafflingly contradictory terms

One of the more famous NFTs, the utterly-cringe “ape” pictures from the Bored Ape Yacht Club, has a different (and extremely confusing) set of terms. Those terms first say:

i. You Own the NFT. Each Bored Ape is an NFT on the Ethereum blockchain. When you purchase an NFT, you own the underlying Bored Ape, the Art, completely. Ownership of the NFT is mediated entirely by the Smart Contract and the Ethereum Network: at no point may we seize, freeze, or otherwise modify the ownership of any Bored Ape.

The bit about the Smart Contract and the Ethereum Network is essentially just talking about how the possessor of a relevant private key can transfer the association of the NFT to someone else; the important part at the moment is “you own… the Art, completely”.

The very next section then pretty much contradicts this entirely, saying (and apologies for the length):

ii. Personal Use. Subject to your continued compliance with these Terms, Yuga Labs LLC grants you a worldwide, royalty-free license to use, copy, and display the purchased Art, along with any extensions that you choose to create or use, solely for the following purposes: (i) for your own personal, non-commercial use; (ii) as part of a marketplace that permits the purchase and sale of your Bored Ape / NFT, provided that the marketplace cryptographically verifies each Bored Ape owner’s rights to display the Art for their Bored Ape to ensure that only the actual owner can display the Art; or (iii) as part of a third party website or application that permits the inclusion, involvement, or participation of your Bored Ape, provided that the website/application cryptographically verifies each Bored Ape owner’s rights to display the Art for their Bored Ape to ensure that only the actual owner can display the Art, and provided that the Art is no longer visible once the owner ofthe Bored Ape leaves the website/application.

This seems to my simple mind to be completely at odds with the part where they said “you own the Art, completely”. If I own the Art, how are they in any position to grant me a license? It’s my Art, how are they granting anyone a license to anything? If I own it “completely”, what does it mean that they are granting me a conditional license, to use it “as part of a marketplace” only provided that the marketplace does certain specified things?

If I violate the terms of this license, what happens? Do I cease to “own” it “completely”? Do I continue to own it, but they reserve the right to sue me under some theory that they have some residual rights to it, despite my complete ownership? It’s not at all clear.

The third section, and the only other section in these terms, purports to grant me a similar conditional license to do certain commercial things with the Art (which I “own” “completely”), and is similarly baffling.

I have asked the “Bored Ape Yacht Club” on Twitter what this all means; we’ll see if I get a reply.

(It may also be noteworthy that this doesn’t say whether it’s granting an exclusive or non-exclusive license to use the Art in these ways. Is there some default? Are they in fact reserving the right to sell multiple NFTs associated with the same Art? Or is there some other reason they didn’t say “exclusive”?)

The CryptoKitties and WWW Dot NFT License Dot Org

Another famous, and earlier I believe, NFT sort of thing is “Cryptokitties”, another big set of tiny images, of (wait for it) kitties rather than apes, and described as a “game”, but otherwise the same sort of thing. (Well, you can make new ones by “breeding” them, in a process I haven’t looked into, and no doubt some other stuff, but still.)

The main Cryptokitties page says, familiarly, “Each cat is one-of-a-kind and 100% owned by you; it cannot be replicated, taken away, or destroyed.” And then there is a set of terms and conditions, which pretty much completely contradicts this statement, in a similar way to the Ape one.

It doesn’t fall as blatantly into contradiction as the Ape one, as it first says, in a section called “Ownership”:

i. You Own the NFT. Each CryptoKitty is a non-fungible token (an “NFT”) on the Ethereum blockchain. When you purchase a CryptoKitty, you own the underlying NFT completely. This means that you have the right to trade your NFT, sell it, or give it away. Ownership of the NFT is mediated entirely by the Smart Contract and the Ethereum Network: at no point will we seize, freeze, or otherwise modify the ownership of any CryptoKitty.

This is very similar to the Ape one above, with the perhaps-important difference that it doesn’t say anything about “the underlying Art”. It talks only about “the underlying NFT”. (This wording seems odd to me, in that it first says that a CryptoKitty just “is” an NFT, and then it talks as though a NFT is something that “underlies” a CryptoKitty. Puzzling.) It’s not clear what it means to “own an NFT” (underlying or otherwise); that’s what this whole weblog entry here is about, after all. So we continue reading the license.

Lower down, in a section called “License to Art”, we find words very (very!) similar to those in the Ape license, divided into “General Use” and “Commercial Use”, granting “worldwide, non-exclusive, non-transferable, royalty-free license” to do certain rather limited things with the Art. Note that they explicitly say that it’s non-exclusive! The Commercial Use license contains the rather amusing (to one who hasn’t spent any money on them) limitation:

provided that such Commercial Use does not result in you earning more than One Hundred Thousand Dollars ($100,000) in gross revenue each year

I mean, what? How is the license holder supposed to avoid earning more than $100K in gross revenue? What happens if they earn $100,001? Is the license revoked? Will they send Cease and Desist letters?

Also unlike the Ape one, this license contains a section called “Restrictions”, which forbids doing all sorts of fuzzily-defined things with the Art. This includes for instance “modifying the Art in any way”, which makes no sense to me. Am I not allowed to load it up into The GIMP to see how it would look in greyscale? Or is it just a prohibition on creating Derivative Works, and if so why didn’t they say that; that concept is at least slightly well-defined. The Restrictions also forbid using “the Art for your Purchased Kitty in connection with images, videos, or other forms of media that depict hatred, intolerance, violence, cruelty, or anything else that could reasonably be found to constitute hate speech or otherwise infringe upon the rights of others”, and a host of other things.

This is all really controlling, and is more like the license granted to users of a video game for what they can do in-game with their characters, then an actual license to use an image in the world as a whole. Given that CryptoKitties is (I guess?) mostly a game that is played inside an app, perhaps that’s really what is going on here: if you violate the license, they will terminate your account on the app, so you can’t play any more. I kind of doubt they really intend to go out and sue you for uses that you make of the Art (i.e. low-resolution cat cartoons) in the outside world. Maybe?

Oh, ah, wait! Here in the section called “Other terms of license”, they answer my question about what the user is supposed to do if they accidentally make more than $100,000. “If you exceed the $100,000 limitation on annual gross revenue set forth in Section 3.C(ii) above, you will be in breach of these Terms, and must send an email to Dapper at legal@dapperlabs.com within forty-five (45) days, with the phrase ‘CryptoKitty License – Commercial Use’ in the subject line, requesting a discussion with Dapper regarding entering into a broader license agreement or obtaining an exemption (which may be granted or withheld in Dapper’s sole and absolute discretion).”

To which my reaction is (A) lol omg, and (B) this is definitely an attempt to steer some middle path between “look, we just own all of this” as say Blizzard would no doubt do if you tried to use your WoW character commercially, and “you can take the adorable kitten picture that you buy, and do whatever you like, which is why it’s so valuable!” which they apparently decided very much against.

The CryptoKitties license is provided to other NFT-makers for re-use on www.nftlicense.org (note that the actual license is on the third tab of the main page there, and if you read the default “Intro” tab as containing the license you may end up saying silly things on Twitter due to your confusion; at least if you’re me you may).

It’s entirely possible that the Ape people at BAYC started with that license, and removed the “Restrictions” section and the bit about not making over $100K because they wanted to sell just the pictures, not the use of them within a game or app, and thought that the restrictions would make people not really want to spend money on them. And then they added the little bit about owning the Art “completely” similarly to make them more valuable, but without doing anything about the fact that the remaining two sections about license grants pretty much directly contradicted that.

Heh!

Are there any NFTs that give actual ownership?

This is a question that interests me, but to which I don’t know the answer. It would seem sensible that there is some NFT out there somewhere where if you “own” the NFT, you actually own all rights in the underlying entity (digital data object, plot of land in Flint County, etc), rather than just being granted some very limited rights to do a few things with some Art that someone else still owns in every other sense.

If you know of any, let me know! I will attempt to notice your comment and respond to it and everything!

Other reading: Here’s someone else that looked into this kind of stuff for some other NFTs last year; they know more about it than I do, and basically came to the conclusion that it’s rather a mess, and no one really knows. :)