Moonbirds ruffles some holders' feathers with abrupt copyright switch

Moonbirds, a popular non-fungible token (NFT) project, has abruptly changed its copyright model. Now, some of its holders are not happy about it — and a copyright lawyer says they have a point. 

Moonbirds co-founder Kevin Rose explained in a Twitter thread on Thursday that Moonbirds and its sister project, Oddities, will adopt the Creative Commons CC0 copyright code. That means the art is now in the public domain and can be freely distributed, augmented and commercialized without the owner’s consent.  

“In this new future, true ownership is dictated by what is recorded on-chain, the way it should be, not by a record housed by a government or corporate entity,” Rose wrote. The project's terms of services will be updated to reflect this change, and DAOs managing the Moonbirds and Oddities will be formed to prevent scams, hate speech and violence surrounding these projects.  

But some have taken to social media to push back, arguing that why had bought into the project believing they had exclusive rights to their NFT — and now they feel these have been taken away without prior notice.  

“Would have been nice to implement a voting mechanism for holders,” a Twitter user by the name of Cathsimard posted. 

“I disagree with the decision to go with CC0 months after launch, taking rights away from holders,” wrote Twitter’s Head of Consumer Product Marketing Justin Taylor, adding that he doesn’t own a Moonbird. “Artists and creators, I believe, should make the decision upfront, as consumers bought with an expectation.”  

Moonbirds has the legal right to waive the project's copyright through a creative commons license, according to Sohaib Mohammad, an NFT-focused intellectual property lawyer (who goes by delawyer.eth online). However, Mohammad said the decision to not notify holders before waiving the copyright highlights a lack of protection for NFT buyers. 

"The consumer protection issue for me is that major decisions that affect the value of an NFT are occurring post-mint and following significant secondary market sales. If the CC0 was declared pre-mint, I would have no issue with this decision." 

Moonbirds are relatively expensive to purchase. The so-called floor price, or the supposed minimum price to buy a piece for the collection, was 16.5 ETH (around $30,000 USD) as of writing. Holders may have invested in their Moonbird to build a commercial brand around their asset, only to find out now that anyone can commercialize their Moonbird, Mohammed said. 

The collection’s floor price fell 3 ETH following the CC0 announcement, according to the crypto data tracker CoinGecko.  

One Moonbirds owner claimed to have lost financial prospects due to the copyright shift. “Shortly after the Moonbirds CC0 announcement, I actually lost a six- figure licensing deal that I’d been working on for a while,” a Twitter user named Lakoz.eth said. “I understand the decision, but the approach by the team could’ve been much better.” Lakoz.eth did not respond to The Block's request for an interview.   

Murky copyright rules have characterized several high-profile NFT projects, including CyptoPunks. At this point, Bored Ape and CryptoPunk owners generally believe that they have exclusive rights to their assets. Other projects, like Nouns, make it clear that they permit anyone to use the art for personal or commercial use. Moonbirds is the first “blue-chip” project to adopt this standard.  

According to Mohammed, disgruntled Moonbird holders could try to sue the project over the abrupt copyright change. However, their argument “would be much stronger if the Moonbirds team had promised some aspect of exclusivity accompanying the commercial rights to a holder’s NFT,” he said. “But as far as I understand it, they didn’t.”