As I grade law school exams, I came across a complicated scenario IRL that would make for an excellent law school exam.
The actor Seth Green revealed a trailer for his upcoming series White Horse Tavern, which uses one of the Bored Ape characters (#8398) from the NFTs he owns.
According to Buzzfeed (see below), Green told the VeeCon audience that his NFT was stolen: ““I bought that ape in July 2021, and have spent the last several months developing and exploiting the IP to make it into the star of this show. Then days before — his name is Fred by the way — days before he’s set to make his world debut, he’s literally kidnapped.”
Buzzfeed also states: “Transaction ledgers show the Bored Ape was also sold by the scammer to a pseudonymous collector known as “DarkWing84,” who purchased it for more than $200,000. The NFT was then swiftly transferred to a collection called “GBE_Vault,” which is where it currently sits.”
The Buzzfeed article also cites the view of Daniel Dubin, an IP attorney, that Seth Green might not be able to use the Bored Ape character any more: “If the current owner ‘wanted to cause trouble for Seth Green they probably could, because that person becomes the holder” of the commercial usage rights.'”
I disagree. The Bored Ape license is a non-exclusive license. Ultimately, Yuga Labs owns the copyright. As such, the non-exclusive license accompanying the NFT gives the licensee who owns the NFT no standing to sue for an unauthorized use of the Bored Ape character under copyright law. Only Yuga Labs has standing to sue. Section 501(b) of the Copyright Act clearly states: “The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it.”
Yuga Labs can also grant Seth Green a new license to use the Bored Ape #8398. As the copyright owner, Yuga can grant as many non-exclusive licenses it wants.
So, ultimately, whoever is in possession of the stolen Bored Ape NFT can’t stop Seth Green from using the character in the series.
(*I’ve put aside, for the moment, whether an innocent owner of the NFT, if the person had no knowledge the NFT stolen, could use the Bored Ape character as well, meaning whether the Bored Ape license is valid for the innocent owner. The question is whether a stolen NFT vitiates the license that accompanies the NFT, even if obtained by an innocent owner. Devilish question!)
Copyright complications for Seth Green's show using his Bored Ape, which reportedly was stolen.https://t.co/iDtDa21rv1
