Dune, DAO and Copyright

NFTs and Spice DAO (which stands for Decentralised Autonomous Organisation) have made the news for thinking that the laws of copyright don’t apply to the virtual realm and having their error corrected publicly by users on Twitter.

Jodorowsky’s Dune

Back in June 2021, POF considered the question of what a purchaser is actually acquiring when they buy a non-fungible-token (NFT) associated with a digital work. The purchase of an NFT provides the buyer with a token that contains meta data and a link to the website where the digital work is stored, not the digital work itself. In our earlier article, we raised the issue that the purchase of an NFT does not give the purchaser ownership in the underlying rights associated with the NFT or associated digital works. The purchaser is provided with a website address – which can be likened to the directions to an art gallery where you can view the work.

Much like buying a physical painting, the purchaser of an NFT has the right to view the work, but they are unable to distribute or reproduce it. These rights remain with the copyright owner unless they have been assigned. Under s196(3) of the Copyright Act, any assignment of copyright needs to be in writing and signed by the assignor. However, current technology means that it is much easier to copy and share the digital works sold with the NFT.

But what happens when real world works are purchased with the idea that they will be turned into an NFT? Spice DAO, an anonymous NFT group, spent EU€2.66million to purchase a copy of a rare art book known as ‘Jodorowsky’s Dune’. The Dune movie that is presently in cinemas is but one in a long list of attempts to create films out of Frank Herbert’s epic science fiction novels. In 1974, filmmaker Alejandro Jodorowsky embarked on a process to create a film adaptation of Dune. Mr Jodorowsky’s Dune was to be quite the undertaking with the likes of Salvador Dali and Orson Welles starring, and Pink Floyd creating the score for this 14 hour long epic. It was ultimately never made, and the project fizzled out. The legacy of this project, however, was an extensive book of concept art that Mr Jodorowsky presented to studio executives. These books, known as ‘Jodorowsky’s Dune’, commonly come to market but usually sell for between US$25,000 to US$40,000.

Spice DAO bought the book, from crowdsourced funds, with the intent to make the book public, produce an animated limited series inspired by the book, and to issue a collection of NFTs based on the book. They intended that once the book was made publicly available, they would destroy the physical copy of the book. Spice DAO’s plans unravelled when the internet kindly informed them that what they had bought was a very old, very expensive book. None of the rights necessary to carry out their intentions came with the exorbitant price. Not to be deterred Spice DAO are continuing to pursue this project, although given that any adaptation or derivative work would require licenses from the estate of Frank Herbert, or Mr Jarodowsky at the very least, this NFT saga is likely to encounter the same fate as the original project.

A timely reminder of why having a basic understanding of copyright is important in any business endeavour!

Spice DAO has highlighted the need to understand what you are buying both in the virtual world and the physical world. Simply owning a book or an NFT doesn’t automatically assign underlying intellectual property rights.

If you need help navigating intellectual property laws in the metaverse POF is always here to help.

Melissa Wingard - Special Counsel

Melissa Wingard, Former POF Attorney

BA(Eng&Hist) LLB(Hons) GradDipLegPrac GradDipAppFin&Inv MCyberSecOps

Melissa Wingard is a senior commercial technology lawyer, with over 15 years’ experience, assisting software, cybersecurity, and technology companies, across the Asia Pacific region, grow their business and meet strategic aims, whilst managing risk and regulatory compliance.