Section 1.1: Legal Considerations in Art Creation

Consider this scenario: a character in generative art has a shirt layer. It’s quite instinctive for an artist to want to incorporate a pop-culture reference, perhaps a logo or a brand name, on that shirt.

In the offline realm, such actions may go largely unnoticed, even if they technically constitute infringement. For instance, the chances of an artist getting a takedown notice for selling a single painting at a roadside gallery in North Carolina are minimal, likely due to the discreet nature of such transactions.

Corporate legal departments vary significantly in their vigilance. For example, some brands like Siracha aren’t even trademarked, while others, like Disney, are notorious for aggressively pursuing even the most trivial uses of their IP. I've even heard of local bakeries refraining from drawing Mickey Mouse on cakes out of fear of legal repercussions from Disney.

However, the dynamics change dramatically once you bring something online, especially in a commercial context.

Generative NFT collections typically consist of around 10,000 PNG files, each priced between $150 and $1,000. This price range is enough to attract the attention of any corporate legal professional.

Moreover, generative works come with associated metadata. When you place a Nike swoosh on your character's shirt, the property and trait might be labeled as “SHIRT: Nike,” effectively advertising that you’re selling a product featuring their IP. This is a significant legal risk.

Section 1.2: Navigating Legal Challenges

Whenever I observe brands included in the generative sets that my company develops, we advise teams to consider the potential legal consequences of retaining those brands in their work. The last thing any NFT project needs is a takedown notice, which could jeopardize the overall value of the collection.

Some teams appreciate our caution, while others deem it excessive. Nonetheless, I firmly believe that erring on the side of caution is the most sensible approach.

A compromise some teams adopt is to keep the trademark or logo in the artwork but avoid mentioning it in the metadata—e.g., retaining the Nike swoosh but labeling it as “SHIRT: Sport.” This strategy may keep the artwork under the radar, though I cannot definitively say whether this falls under “fair use” or “artistic expression.” (Consulting a lawyer is advisable!)

Ultimately, artists often wish to express their style and reference brand culture. I understand this desire, and I recommend viewing the legal landscape surrounding logos not as a limitation but as an opportunity.

For instance, use your interest in showcasing logos as a chance to cultivate your own brand. Create a unique logo for your collection and have your characters sport that logo on their apparel. This will not only enhance the aesthetic appeal of your characters but also help establish your brand, paving the way for future real-life merchandise opportunities.