Andreessen says ‘Can’t Be Evil’ NFT licenses will help avoid legal ‘ambiguity’

Many popular NFT projects – especially Bored Ape Yacht Club– give holders the right to use their own images to create and sell derivative works of art and products. However, there are questions as to whether such IP licenses are legally sustainable or not creators have even misled buyers. Venture capital giant Andreessen Horowitz says it wants to help.

The VC firm announced today the release of “Can’t Be Evil” NFT License Terms which are available to all project creators for free use. The licenses allow for a variety of different approaches for NFT projects, ranging from limited terms for personal use to broader licenses that allow anyone to use the artwork for any purpose—even if they do not own an NFT.

These are not new concepts; in fact, the licenses are inspired by and similar to those offered by Creative Commons. But the company’s general Miles Jennings and Chris Dixon write that the licenses are set for decentralized Web3 projects to remove ambiguity, minimize confusion around IP rights assignments, and perhaps avoid future legal problems.

“There is currently significant ambiguity and legal risk across the NFT ecosystem,” Jennings, the company’s general counsel and head of decentralization, tweeted this morning. – Lack of standardization makes it difficult for NFT buyers to know what rights they get, and it is expensive to create customized licenses. All this seems like a blow to the industry.”

An NFT is a blockchain token which can serve as a deed of ownership for an item, including digital creations such as artwork, profile pictures and collectibles. The NFT market increased in 2021 and yielded trade volume worth 25 billion dollarswith around $20 billion more generated in the first half of 2022.

Andreessen Horowitz has his fingers in many things Web3 pies, and has invested in some of the biggest NFT creators around – including Bored Ape Yacht Club creator Yuga Labs, Gary Vaynerchuk’s VeeFriends project, and lastly Evidence of Kevin Rose (Moonbirds). It is also invested in leading marketplace OpenSeaamong many other crypto projects.

The idea of ​​a massive VC firm guiding NFT license terms may rub the wrong way, but Andreessen Horowitz tapped Punk6529— a pseudonymous crypto influencer known for his valuable collection and insightful Twitter threads — to help shape the licenses. It also worked with law firms Latham & Watkins LLP and DLA Piper, as well as unspecified portfolio companies.

Furthermore, the license terms themselves have been released for free via an open source code, Creative Commons Zero (CCO) license, which means they can be freely used, remixed and distributed by Web3 creators.

The “Can’t Be Evil” brand is inspired by Google’s original “Don’t Be Evil” mantra, but adapted to reflect the supposed immutability of blockchain networks. Andreessen Horowitz also says that the licenses themselves are legally irrevocable, meaning that NFT buyers can trust that the terms offered will remain in effect once a license is distributed.

“By making the licenses easy (and free) to incorporate, we hope to democratize access to high-quality licenses and encourage standardization across the Web3 industry,” the authors wrote. “Wideer adoption could lead to incredible benefits for creators, owners and the NFT ecosystem as a whole.”

Andreessen Horowitz’s NFT licenses follow soon after publication of a research report from investment firm Galaxy Digital, which alleged that almost all prominent NFT projects do not effectively grant IP rights to holders – and that some projects may have “misled” buyers as to the rights they obtain by purchasing an NFT.

In particular, the Galaxy Digital report called out the Bored Ape Yacht Club license for unclear and contradictory language about IP ownership. It also suggested that Proof was deceiving Moonbird’s NFT buyers about their IP rights, given the recent announcement that it would open such commercialization rights to all— not just NFT owners.