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Andreessen Says Its 'Can’t Be Evil' NFT Licenses Will Help Avoid Legal 'Ambiguity'

Amid confusion over what IP rights are granted to NFT holders, the VC giant—with help from Punk6529—attempts to standardize options.

4 min read
NFTs have become a multi-billion dollar industry. Image: Shutterstock

In brief

  • Venture capital firm Andreessen Horowitz has released a series of “Can’t Be Evil” licenses for NFT projects to use.
  • The free licenses, created with the help of Punk6529 and others, let projects decide how NFT holders can tap into and commercialize IP.

Many popular NFT projects—most notably the Bored Ape Yacht Club—grant holders the right to use their owned images to create and sell derivative artwork and products. However, there are questions over whether such IP licenses are legally durable, or if creators have even misled buyers. Venture capital giant Andreessen Horowitz says it wants to help.

The VC firm today announced the release of “Can’t Be Evil” NFT licensing terms that are available for any project creators to freely use. The licenses provide an array of different approaches for NFT projects, ranging from limited personal use terms to broader licenses that let anyone use the artwork for any purpose—even if they don’t own an NFT.

These aren’t new concepts; in fact, the licenses are inspired by and similar to those offered by Creative Commons. But the firm’s General Miles Jennings and Chris Dixon write that the licenses have been tuned for decentralized Web3 projects to remove ambiguity, minimize confusion around IP rights grants, and perhaps avoid future legal troubles.

“There’s currently significant ambiguity and legal risk across the NFT ecosystem,” Jennings, the firm’s general counsel and head of decentralization, tweeted this morning. “A lack of standardization makes it difficult for NFT purchasers to know what rights they’re getting, and creating customized licenses is expensive. All of this acts as a drag on the industry.”

An NFT is a blockchain token that can serve as a deed of ownership for an item, including digital creations like artwork, profile pictures, and collectibles. The NFT market surged in 2021, yielding $25 billion worth of trading volume, with about $20 billion more generated in the first half of 2022.

Andreessen Horowitz has its fingers in many Web3 pies, and has invested in some of the largest NFT creators around—including Bored Ape Yacht Club creator Yuga Labs, Gary Vaynerchuk’s VeeFriends project, and most recently Kevin Rose’s Proof (Moonbirds). It has also invested in leading marketplace OpenSea, among many other crypto projects.

The idea of a massive VC firm guiding NFT licensing terms might rub some 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 have themselves been released for free via an open-source, Creative Commons Zero (CCO) license, which means they can be freely used, remixed, and forked as Web3 creators see fit.

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

“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. “Greater adoption could lead to incredible benefits for creators, owners, and the NFT ecosystem as a whole.”

Andreessen Horowitz’s NFT licenses arrive soon after the publication of a research report from investment firm Galaxy Digital, which alleged that nearly all prominent NFT projects are not effectively granting IP rights to holders—and that some projects may have “misled” buyers in regards to the rights that they attain 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 deceived Moonbirds NFT buyers about their IP rights, given its recent announcement that it would open up such commercialization rights to everyone—not just NFT owners.

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