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Alliance Center for
Intellectual Property Rights


NFTS: OBSCURITY BETWEEN OWNERSHIP AND COPYRIGHT

February 15, 2026

*Ms. N. Pompi Devi

INTRODUCTION:

Non-fungible tokens (NFTs) have been increasingly mentioned, especially in the realm of recent digital developments. In layman’s terms, NFTs are a form of ‘digital certification’ that dictates ownership of digital assets such as digital art, music, or any other forms of creative collectibles.

NFTs AND ITS CREATION

The question then arises as to how NFTs are created in the very first place. The process of creating an NFT is called Minting and the primary step begins with the creator of the digital collectible uploading the work in a digital locker like that of decentralized storage such as Arweave; or storing on platform storage; or in the rarest cases in fully-on-chain storage, which means directly storing all the data of the digital asset into the blockchain without depending on any other external storage mechanism. Following this, a smart contract is generated, which provides identification for the owner of the digital asset, and with transfer it automatically updates the owner’s identity. This whole sequence is recorded on the blockchain, which acts as a record-keeping book.

When NFTs are created a unique form of code is generated for the particular digital asset, which is then stored on the blockchain. By doing so, it enables the owners to then trade it with another and thereby, transferring it from one owner to another. However, it must be kept in mind that NFTs are unique in character, i.e., no other NFTs share any similarity with each other and are distinct from each other. This stands in difference to fungible tokens like that of Bitcoin, which are not distinguishable and are completely interchangeable.

OWNERSHIP VS COPYRIGHT

One of the key misconceptions that exists is that NFTs grant the rights of copyright. Copyright is granted when there is originality of the work and enables the creator to have exclusive rights to redistribute, reproduce, or use it in any manner. This protects the original creators and prevents their work from being misused in any manner. NFTs, on the other hand, are simply a proof of ownership on a license basis. This means that the owner of the NFT owns the digital asset but cannot engage in any of the exclusive rights granted to the original creator under the ambit of copyright law without the permission or express consent of the said creator. This also means that no NFTs can be minted without the express consent of the original creator. If done so, it results in legal grounds that can be pursued by the original creator.

However, commercial rights or any other rights over the digital asset can be enjoyed by the purchaser if such terms are explicitly mentioned in the purchase terms or smart contracts. Such an understanding was held in the case of Miroslav Dimitrov v. Frank Ape LLC, where the court held that unless specified in the terms of the purchase or smart contract, NFTs and their sale do not include the transfer of copyright.

Conversely, it must also be noted that rights that are already not bestowed with the original creator cannot be transferred to the purchaser. For instance, if copyright does not exist with the original creator, then the rights, such as the right to reproduce the asset, engage in commercial purposes, cannot be transferred to the purchaser by way of smart contracts.

CONCLUSION

Conclusively, it becomes apparent that the sale as well as purchase of NFTs enables the owner to enjoy the rights of either personal viewing, social media display, or that of resale of the NFTs. Nonetheless, it is not inclusive of all the rights that comes along with that of pertaining to a copyright and serves to be an important factor for owners to understand.

REFERENCES

  1. Shivangi Vatsa, The Intersection of NFTs and Copyright: Clarifying Ownership of Digital Art, Legal Desire Media & Insights (May 28, 2025), https://legaldesire.com/the-intersection-of-nfts-and-copyright-clarifying-ownership-of-digital-art/
  2. MK Usmaan, NFT Copyright Issues Explained: The Complete Guide for 2025, Techlasi (June 16, 2025), https://techlasi.com/savvy/nft-copyright-issues-explained/
  3. Sei, What Is an NFT? Complete Guide to Non-Fungible Tokens in 2025, SEI Blog (Dec. 11, 2025), https://blog.sei.io/s/what-is-an-nft-2025/
  4. Giga Chad, What the NFT NFTs Copyright Moral Rights and Other Legal Implications, Giga Chad NFT (Aug. 4, 2024), https://gigachadnft.com/what-the-nft-nfts-copyright-moral-rights-and-other-legal-implications/

Author:
*Ms. N. Pompi Devi,
4th Year B.A., LL.B. (Hons.) Student, Institute of Law, Nirma University, Gujarat.

Disclaimer: The opinions expressed in the article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of the Alliance Centre for Intellectual Property Rights (ACIPR) and the Centre does not assume any responsibility or liability for the same.