Part 2 of our 5-part series of articles
It is clear that copyright protection must also exist in the metaverse. However, it is questionable what differences there are from a copyright perspective compared to Web 1.0 and Web 2.0. According to Section 2 II UrhG, works are protected by copyright if they are personal intellectual creations, i.e. products that represent something new through their content or form.
I. Protected objects of the platform operator
The software of a platform is protected as a copyright work pursuant to Sections 2 I No. 1, 69a I UrhG. The question of whether the programming interfaces (API) are also eligible for protection becomes problematic. Animated user interfaces, in which moving images are often only created through movement in virtual space, are generally not eligible for protection. The images are generated solely by the software and not by a human being. The situation is different when individual protectable works are combined to form a multimedia work. For example, objects from virtual worlds can generate moving images that represent a personal intellectual creation due to the processing.
An avatar can enjoy copyright protection if it is considered a work of visual art in accordance with Section 2 I No. 4 UrhG. In the case of NFTs, a distinction is made between rights in the NFT and rights arising from the NFT. The NFT itself is software, but it often lacks the necessary human creative effort, so that copyright protection of the NFT as a computer program (Section 69a UrhG) is ruled out.
II. Acts of exploitation
1. Right of reproduction and right of communication to the public
The author has the exclusive right to exploit his work or to grant third parties a right of use. Reproduction within the meaning of Section 16 UrhG does not only apply to a simple copy of a work, but also to the digitisation or storage of a work. However, these provisions take a back seat to the more specialised right of making available to the public (Section 19a UrhG). This right covers all performance results that are displayed to users in the Metaverse.
In the case of NFTS, a communication to the public may exist if a new token is created for a blockchain network (mining). A token describes a sequence of related characters or bits. The work associated with the token is then both reproduced and made publicly accessible through regular uploading.
2. Distribution right
Section 17 UrhG describes the right to offer the original or copies thereof to the public. Section 17 UrhG does not apply to digital copies of works, even if a code can be physically transferred by storing it on a data carrier. However, if software is purchased online, the purchaser may reproduce it.
3. Resale right and smart contracts
The resale right presupposes that the author is involved in the resale of the work of fine art (Section 26 I 1 UrhG). This right is not applicable to NFTs due to the lack of embodiment on a fixed data carrier. Smart contracts are a widespread phenomenon. These consist of a code that stipulates that each transfer of the NFT costs a certain percentage to which the author is entitled. Whether these contractual terms are to be regarded as an application (Section 145 BGB), which is accepted by the acquisition of the NFT (Section 147 BGB), must be interpreted on a case-by-case basis.
III. Limitations
In the Metaverse, the author’s exploitation rights are also limited by statutory restrictions. Important paragraphs here are Section 44a UrhG, which authorises acts of reproduction under certain conditions, as well as Sections 69e, 69d III UrhG.
IV. Utilisation of rights
The right of use pursuant to Sections 31 ff. UrhG, the copyright is exploited. As an unknown type of use, NFTs may entitle the author to remuneration (Section 32c UrhG) and may oblige the rights holder to exploit the rights (Section 31a I 3, 4 UrhG). This should definitely be taken into account in new licence agreements.
V. Enforcement of rights
In the event of copyright infringements, the law of the country for which protection is claimed must be applied (protected country principle). If the copyright of several countries is infringed, each infringement is judged according to the law of the respective country of protection (mosaic principle).
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Part 1 in issue 16-17/2023: Overview
Part 3 in issue 19/2023: Contract and competition law
Part 4 in issue 20/2023: Trade mark law
part 5 in issue 21/2023: Data protection