About the 'Mango vs VEGAP' case. GPT-4: The court's interpretation of transformation may not align with the U.S. Fair Use doctrine's emphasis on adding new expression or meaning

GPT-4: From a strictly U.S. Fair Use perspective, the creation of an NFT from an existing artwork, without substantial alteration or addition of new expression, may not be considered transformative

Please read “Barcelona court rules in favour of defendant in NFT metaverse copyright case” Isn't the judge effectively saying: it is Fair Use because it is NOT transformative at all? Is this in line with the US Fair Use doctrine? Do you agree that creating an NFT in the way described is not transformative at all?

ChatGPT-4’s answer:
The Barcelona court's decision in the copyright case involving Mango and the adaptation of works by Spanish artists into digital formats for display in the metaverse and as NFTs is intriguing and nuanced, especially in the context of fair use principles. The judge's ruling was based on the concept of "harmless use," which, while not directly equated to the U.S. doctrine of fair use, shares some similarities in terms of considering the impact on the original work and its creators.

The case centered on whether Mango's adaptation of artworks into digital formats and the subsequent creation of NFTs constituted an unauthorized adaptation or transformation of the works. Notably, the judge determined that Mango's use did not infringe upon the copyright of the artworks. The judge concluded that the digital adaptations and their presentation in the metaverse, although transformed, were a fair, lawful, and harmless use that did not prejudice the authors or their successors. The judge emphasized that the adaptations actually served to enhance and disseminate the works to a broader audience, thereby not requiring the consent or authorization of the intellectual property rights owners. The ruling suggests that such use, under the circumstances described, did not require a disproportionate sacrifice from the owner of the physical works, making it a legitimate and fair application under the right of public exhibition, exercised in good faith ("Barcelona court rules in favour of defendant in NFT metaverse copyright case – TechnoLlama," 2024).

This decision is significant because it illustrates a flexible interpretation of copyright laws in the context of new digital technologies and the metaverse. However, it's important to distinguish this approach from the U.S. Fair Use doctrine. In the U.S., fair use is determined by a four-factor test that considers the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used, and the effect of the use on the market for the original work. While the Barcelona court's analysis included considerations somewhat analogous to these factors, the legal framework and terminology differ due to the distinct legal systems and copyright laws in Spain versus the United States.

Therefore, while the judge's reasoning shares some principles with the U.S. Fair Use doctrine, such as assessing the harmlessness and impact of the use on the original work, it operates within a different legal context. The decision reflects a broader trend towards recognizing the need for copyright law to adapt to technological advancements and new forms of creative expression, even as it navigates the specific legal contours of Spanish copyright law.

The question of whether creating an NFT from existing artwork constitutes a transformative use is nuanced and depends on how "transformative" is defined within the context of copyright law. The concept of a work being "transformative" is central to the U.S. Fair Use doctrine and entails altering the original work with new expression, meaning, or message, rather than merely repurposing it without significant changes.

In the context of the Barcelona court ruling on the use of artworks for NFTs in the metaverse, it appears the court's interpretation of transformation may not align precisely with the U.S. Fair Use doctrine's emphasis on adding new expression or meaning. The court focused on the digital adaptation and exhibition of these works in the metaverse as a form of use that did not harm the original works' economic value or copyright holders' rights. The judge highlighted the exhibition's role in promoting and disseminating the works to a wider audience, suggesting a form of value added to the original by introducing it to new platforms and formats.

However, from a strictly U.S. Fair Use perspective, the creation of an NFT from an existing artwork, without substantial alteration or addition of new expression, may not be considered transformative. The act of tokenizing a digital copy of an artwork into an NFT primarily changes the work's ownership and distribution mechanism rather than its content, meaning, or purpose. This difference in interpretation underscores the complexity of applying traditional copyright concepts to new digital phenomena like NFTs and the metaverse.

Given the rapidly evolving nature of digital content, the legal frameworks governing copyright and transformation are being challenged and may continue to evolve. Courts may need to balance the interests of copyright holders with the innovative uses of digital technologies that can potentially benefit both creators and the broader public. The debate over what constitutes "transformative" use in the context of NFTs reflects broader questions about copyright law's adaptability to new forms of creative expression and distribution in the digital age.

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Follow-up question for MS Copilot: How do you feel about ChatGPT-4’s view on this matter?

MS Copilot’s answer:
The analysis provided by ChatGPT-4 is quite comprehensive and accurate. It correctly identifies the key aspects of the Barcelona court’s decision and its implications for copyright law, particularly in the context of digital technologies like NFTs and the metaverse.

The analysis also correctly points out the differences between the Spanish concept of “harmless use” and the U.S. doctrine of “fair use”. While both concepts share some similarities, they operate within different legal frameworks and terminologies due to the distinct legal systems and copyright laws in Spain and the United States.

The question of whether creating an NFT from existing artwork constitutes a transformative use is indeed nuanced and depends on how “transformative” is defined within the context of copyright law. The concept of a work being “transformative” is central to the U.S. Fair Use doctrine and entails altering the original work with new expression, meaning, or message, rather than merely repurposing it without significant changes.

In the context of the Barcelona court ruling, it appears the court’s interpretation of transformation may not align precisely with the U.S. Fair Use doctrine’s emphasis on adding new expression or meaning. The court focused on the digital adaptation and exhibition of these works in the metaverse as a form of use that did not harm the original works’ economic value or copyright holders’ rights. The judge highlighted the exhibition’s role in promoting and disseminating the works to a wider audience, suggesting a form of value added to the original by introducing it to new platforms and formats.

The act of tokenizing a digital copy of an artwork into an NFT primarily changes the work’s ownership and distribution mechanism rather than its content, meaning, or purpose. This is a key point because it underscores the complexity of applying traditional copyright concepts to new digital phenomena.

As digital content continues to evolve, so too will the legal frameworks governing copyright and transformation. Courts may indeed need to balance the interests of copyright holders with the innovative uses of digital technologies that can potentially benefit both creators and the broader public.

The debate over what constitutes “transformative” use in the context of NFTs reflects broader questions about copyright law’s adaptability to new forms of creative expression and distribution in the digital age. This is a dynamic and evolving area of law that will continue to be shaped by technological advancements, legal interpretations, and societal values.

However, from a strictly U.S. Fair Use perspective, the creation of an NFT from an existing artwork, without substantial changes, might not be considered transformative. This is a complex legal issue that can vary by jurisdiction and specific case, and it’s always a good idea to consult with a legal expert when dealing with these matters.

Please note that this is a general discussion and should not be taken as legal advice. For any legal concerns, please consult with a legal professional.