Xiao Sa: Probe into the four legal risks of entering the digital collection

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In 2022, digital collections will not only become a hot track in the field of entrepreneurship, but also set off a wave of cultural consumption.

However, with the development of the data collection industry, challenges related to the law have gradually surfaced. Such as:

Does the digital collection and its playing method have the problem of playing the legal edge ball?

Is there any illegal risk in the transfer and transaction of digital collections?

What is the infringement risk between digital Tibet IP authorization and second innovation?

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These problems not only perplex practitioners, but also the "chaos" of the current data collection industry.

On June 15, Babbitt education invited Xiao SA, a senior partner of Beijing Dacheng Law Firm, to share the theme of legal risk tips for digital collections entering the Bureau.

The following content is from the actual record of the open class, which has been sorted out by Babbitt.


The positioning of NFT digital collections is cultural digitalization, not national hype


It is true that the current economic upward pressure is huge, and it is not easy to grow an emerging business model from the market. NFT digital collection industry, which digitally migrates traditional artworks based on blockchain and smart contract, creates new forms and conforms to the new trend of Internet development. Digital collections contribute to cultural digitalization and will be proved.

However, the industry is mixed. When we communicate with some technology companies or large manufacturers, we are worried that some platforms are "wild", which is completely the law of the jungle. The relatively wild platform lives very well, the relatively well behaved platform, and the secondary market is relatively late or hasn't been opened yet, so it suffers a lot.

If the above situation continues to worsen, the NFT industry will soon be stigmatized, just as the P2P industry was forced out of the historical stage step by step by illegal platforms that were not real P2P.

To prevent the NFT industry from being stigmatized, we must first stop the "crazy speculation" rather than encourage the speculation, or even "market value management". Then, we should have a clear positioning. The digital collection is actually a cultural product, not an object of speculation. In addition, I strongly recommend cutting with the black sheep. If not, the child and the water will eventually be dumped together.

Certain entry thresholds can also be set, such as the threshold for some registered capital or certain requirements for shareholders. At present, the threshold of this industry is too low.

As for secondary trading, it may be possible to start with the trading places approved by provinces and cities within the scope of national authorization, allow some qualified trading places to accept NFT listing transactions, set up systems within the trading center, reduce financial attributes, protect the property rights of cultural consumers, and give the market some free space.


Question 1. What is the legal nature of NFT?


What is the legal nature of NFT in China? It should be considered that NFT in China is generated based on blockchain and other encryption technologies, and has virtual property or property interest certificates that can not be copied, modified or segmented to confirm ownership and authenticity.

NFT can be imagined as a basket in which various rights and interests may be placed. These rights and interests are not fixed, but depend on IP licensing contracts or other contracts. NFT is actually a box, not the content inside. NFT itself is only a number plate, not the copyright itself, nor the property right itself. Do not give NFT the property right attribute easily.

NFT declares that the buyer and the IP party share part of the copyright in a reliable technical form. It can be said that NFT is only a form of right sharing and a right certificate.

From the perspective of civil law, NFT digital collections can be pledged. It is difficult to register the copyright pledge of the underlying works of NFT digital collections, but the law gives corresponding rights after all, and market entities can apply and try according to their own business models.

In addition, the right to package inside NFT varies according to the laws of different countries and regions. Someone always comes to us, hoping to issue a worldwide NFT licensing contract. But NFT has no unified thing, how can there be a general license contract?


Question 2. What works can be sent to NFT?


As for what works can be published in NFT, through the analysis of the underlying logic and legal nature of NFT, it can be found that works that can be published in NFT need to be copyrighted works of the IP party.

According to Article 2 of the regulations for the implementation of the copyright law, works refer to intellectual achievements that are original and can be reproduced in some tangible form in the fields of art, literature and science. They have the following three characteristics:

1. It must be a creative intellectual achievement (excluding pure labor products, and physical or technical labor itself is not protected by the copyright law);

2. It can be reproduced in some tangible form (it must be an external expression that can be objectively perceived);

3. Must be original.

Paragraph 1 of Article 2 of China's copyright law stipulates that "works of Chinese citizens, legal persons or organizations without legal personality, whether published or not, enjoy copyright in accordance with this law." The "citizen, legal person or unincorporated organization" here certainly does not include animals. Therefore, although macaque self photographing is artistic and interesting, it is not a work in the sense of China's copyright law, and of course there is no copyright law protection.

So, are AI works works works? There are relevant cases in Shanghai and Beijing, and the final judgment results on whether AI creation is a work are different. So there is still a lot of controversy here.

As an entrepreneur, we should also consider according to the region, and pay attention to which kind of place it prefers to protect. We should pay attention to understand and observe.


Question 3. Legal analysis of digital IP authorization and second innovation


Prior to the issuance of NFT, the copyright property rights to be agreed upon at least when signing the IP agreement include the right of reproduction, the right of information network transmission and the right of adaptation.

The right of reproduction is the right to make one or more copies of a work by means of printing, photocopying, rubbing, recording, video recording, reproducing, photographing, etc. For the NFT platform, when the publisher distributes the NFT authorized by the IP party, it does not distribute the most original works, and most of them will choose the form of multiple distribution based on the consideration of maximizing interests. If the reproduction right is not agreed in the IP protocol, it will inevitably infringe the copyright owner's reproduction right.

The right of information network communication can enable the owner to obtain the right of the original author to enable others to obtain his works on the information network, and become a "second owner". Only in this way can the NFT of music works be enabled within the scope of compliance.

The right of adaptation is the right enjoyed by the copyright owner to adapt works and create new works with originality. In order to attract more users, some NFT platforms have introduced the method of synthesizing several independent NFTs into new NFTs. In the process of synthesizing a new NFT, it is inevitable to adjust the original NFT works. If the adaptation right is not agreed in advance, it will probably cause infringement of the copyright owner's rights.

It should be noted that the author's purpose in creating the "second creation" work must be to introduce, comment on or explain a certain problem of the original work, otherwise it does not belong to reasonable use. Is there a way to solve the problem of "second creation" works? have It is expensive to purchase adaptation rights and information network rights from big IP, but it can solve the problem of copyright infringement. Otherwise, we can only think hard and find different "expression of meaning" to condense the wisdom results and form a new copyright.

We can see that some classic novels, such as dune, have actually created many works after absorbing the nutrition of these works. You should not only let everyone continue to create, but also protect the copyright of predecessors. This is a difficult place.


Question 4. Legal and compliant Digital Collections


If NFT transactions are alienated into financial transactions, can "provincial and municipal trading center licenses" help enterprises tide over legal difficulties?

No. For those who illegally operate securities, futures and insurance businesses, or illegally engage in fund payment and settlement businesses, or other illegal business activities that seriously disrupt the market order, a license of a local exchange is indeed not enough to support. The "crime" of illegal business must at least be "national regulations", that is, a national level financial license.

This is because the minimum requirement of "committing a crime" of the crime of illegal operation is that it does not violate the "national regulations", so the current business needs a national level financial license according to the national regulations, and the business license issued by the local financial regulatory authorities without the authorization of the financial supervision and Administration Department of the State Council can not stop the criminal risk of the crime of illegal operation.

There are two main legal risks of NFT platform: illegal fund-raising and being a helper.

NFT is a frame. You can put everything in it. What exactly do you put in it? If your rights are fake or empty, this is a very serious problem.

For example, the works of Xu Beihong or Qi Baishi will sell for 300000 yuan. Does this NFT contain copyright? Xu Beihong has been dead for more than 50 years, and some of his copyright rights have disappeared. Although there are rights of authorship, modification and protection of the integrity of the work, these rights belong to the heirs of others, and you do not belong to you when you buy NFT. This kind of NFT will cause a series of problems. What you sell is empty rights.

In addition, if the NFT you buy has no copyright, or the copyright is defective. There may be a risk of fraud in short selling, so we must grasp this issue and do not buy short on the platform. Once there is a fraud risk, it is very close to the fund-raising fraud.

In addition, during the actual operation of the NFT platform in the consignment mode, the platform also has the risk of constituting various crimes, such as aiding the crime of fraud or aiding the crime of information network crime.

In the process of consignment, the consignor may deliberately hype up the price in order to earn high profits. If the consignor adopts the method of fabricating facts or concealing the truth to induce other users to purchase NFT digital collections consigned by the consignor from the platform during the hype, if the consignor claims that the NFT digital collections it holds are internal collections of the NFT platform, and there is a great probability of appreciation in the future, then its behavior may constitute the crime of fraud in this case.

If the consignor conducts large-scale speculation, which is known by the NFT platform but is not stopped, the NFT platform may constitute a helper in the crime of fraud because of its behavior that is not stopped. In the case that the fraud is mainly committed through the information network, the NFT platform will also be suspected of constituting the crime of helping the information network criminal activities because it knowingly provides technical support or help for the consignor's crime by using the information network.

Therefore, for the NFT platform that adopts the consignment mode, it should also do a good job in KYC, and should supervise the daily trading behavior, so as to prevent criminals from maliciously using the platform to commit illegal and criminal acts, thus making themselves fall into undue criminal legal risks.


remarks:


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