Sally Yoon is an IPilogue Writer and a 3L JD Candidate at Osgoode Hall Law School. This article was written as a requirement for Prof. Pina D’Agostino’s IP Intensive Program.

More recently, we have seen digital art open doors for artists to experiment with conceptual artwork like never before. Stijn van Schaik, a second-year Advertising student, sold his soul on OpenSea, making it the first human soul ever sold. In addition, Vortic hosted Aitken's exhibition Open in four galleries, allowing visitors to view the exhibition alongside others around the world, within the same virtual space. As a result, VR works are increasingly seen as not just a “referential pointer to the physical but a place of primary experience, worthy of being collected”.

Doug Aitken, installation view of Open on Vortic VR. © Doug Aitken. Courtesy the artist; 303 Gallery, New York; Galerie Eva Presenhuber, Zurich; Victoria Miro, London; and Regen Projects, Los Angeles

Last year, LACMA released a 7-part series titled “NFTs and the Museum”, to examine how NFTs affect institutions that collect digital art, and highlighted that NFTs may possibly be the “unifying mechanism” used to package [work] done in the digital space. As well as encouraging the collection of natively digital art, NFTs are a way for artists to financially benefit from works traditionally non-commodifiable (ex. conceptual or performative). But before we all scatter to “NFTize” our souls, we need to address some legal issues surrounding the overall sustainability of digital artworks.

Are smart contracts “smart” enough?

Part 2: Legal Issues for Acquisitions discusses one of the most commendable features of NFTs - the automatic resale royalties. Blockchain smart contracts track payments and distribute a percentage of the resale profits back to artists. However, there are ways to get around resale royalties for NFTs, which include transacting on a marketplace platform on another blockchain, so that the NFT’s smart contract is not notified of the resale. Therefore, keeping collectors transacting on platforms that recognize the existing code triggering the resale royalty remains a constant challenge. For now, the best way to avoid this issue remains a specifically drafted contract with a resale royalties provision, tailored to the individual NFT.

Sustainable Models and Practices for Digital Conservation

A sustainable model will offer benefits to both the artists and the collectors. Allowing for collector’s royalties ensures that collectors are committed to the integrity of the resale royalty process and increases the likelihood of the system functioning as it should. Sustainable practices involve the artists’ clear statement about the rights and licences being transferred with the work. Would the artist allow the owner to transfer the work to another platform in the event of blockchain issues or technological obsolescence? Can the owner lend the work to other venues? A digital work's conservation depends on these legal considerations.