Under new 2022 commercial license, can CryptoPunks owners now sue V1 Punks or V1 CryptoPunks for alleged copyright infringement?
nftjedi
DISCLAIMER: this analysis is NOT legal advice. It’s for academic research on the development of De-Collab licenses in Web3. For more about De-Collab, read my essay by clicking here.
The new CryptoPunks 2022 commercial license reopens the Pandora’s box that had erupted earlier this year, but quieted down after Yuga Labs acquired the IP rights to the CryptoPunks from Larva Labs.
To make a very long story short: due to a coding error made by Larva Labs at the launch in 2017, there was an initial version–now commonly called V1 CryptoPunks or V1 Punks–that had the error, but was abandoned in place of new smart contracts that fixed the coding error. Weirdly, both V1 and CryptoPunks point to the exact same artwork files. If you want to read more about the V1 CryptoPunks, read my essay by clicking here.
The new CryptoPunks 2022 commercial license announced this week applies only to the CryptoPunks (at the smart contract: address 0xb47e3cd837ddf8e4c57f05d70ab865de6e193bbb). It does NOT apply to the old V1 Punks.
In other words, the owners of the CryptoPunks now get an exclusive license from Yuga Labs, including the right to sue third parties for infringing their CryptoPunks characters.
Clause 3(c) of the license states:
(c) Actions. To the extent applicable law authorizes you to bring a claim for infringement based upon the unauthorized use of Your CryptoPunk Art, you agree that:(i) any such claim shall be based solely upon the unauthorized use of Your CryptoPunkArt, not other CryptoPunk Art—for example, on the ground that the other CryptoPunkArt is substantially similar to Your CryptoPunk Art; and (ii) Yuga Labs may, in its solediscre2on, join and, unless it would materially prejudice your rights, elect to take over the control of the prosecution of, any such action.
Under copyright law, owners of rights under exclusive licenses have standing to sue for alleged copyright infringement.
Of course, being able to file a copyright lawsuit is different from being able to win a copyright lawsuit.
The quirky facts involving the V1 Punks, which were, in fact, created and initially authorized by Larva Labs, the original copyright owner, make the case far more contestable than a situation in which some random third party copied the CryptoPunks and started reselling them as new NFTs.
No one wants to see a lawsuit between CryptoPunks and V1 Punks. And hopefully it never happens. But, given how contentious things were in the past, it wouldn’t surprising.
