What You Actually Buy When You Buy a Token
The most common mistake in the market of unique digital tokens (non-fungible tokens) is the assumption that acquiring the token means acquiring the copyright in the underlying work. Georgian law builds the relationship differently: there is no special statute for such tokens in Georgia, and the only real basis is the Law on Copyright and Neighbouring Rights. The author's personal non-property rights belong to the author independently of the property rights and remain with the author even upon their transfer (Article 17, part 3) — the sale of a token leaves authorship, the name and the integrity of the work with the author.
The list of personal non-property rights is defined directly by the law: the right of authorship, the right to the name including a pseudonym, the right to decide when and how the work is disclosed, the right to the integrity of the work, the right to respect for reputation, and the right of withdrawal. The alienation of these rights during the author's life is inadmissible (Article 17, part 4) — a clause "all rights transferred" written into a token cannot overcome this norm.
Property Rights and Their Transfer
The author or other copyright holder has the exclusive right to use the work in any form — the right to carry out, permit or prohibit reproduction, distribution, import, public display, public performance, public transmission, translation, adaptation and other uses (Article 18). It is precisely this property side that can move: the author or other holder may transfer all property rights or part of them to a successor (Article 36) — and this transfer happens by contract, in documentary form, not automatically by virtue of the token itself.
The practical conclusion cuts both ways. For the creator: when selling a token, the transfer of property rights must be defined separately and limited to specific uses. For the buyer: unless the contract or the sale terms state that property rights are transferred, the buyer owns only the token, not the right of commercial exploitation of the work.
The Special Regime of Works of Fine Art
The law gives works of fine art additional instruments. The author may demand that the owner of the work allow its reproduction, though the owner cannot be required to bring the work to the author (Article 20, part 1). Moreover, upon every subsequent sale of the original of a work of fine art or photography, the author or the author's heirs have the right to receive a royalty from the seller (part 2).
This resale royalty is calculated in price brackets, which must be presented separately: for a sale price from 500 to 100,000 GEL — 4%; from 100,000.01 to 400,000 GEL — 4,000 GEL plus 3% of the amount above 100,000.01; from 400,000.01 to 700,000 GEL — 13000 GEL plus 1% of the amount above 400,000.01. Where a digital token is perceived as a form of resale of the original, this mechanism raises the question directly — and the answer must be given through the contractual construction.
Disputes and Practical Protection
Token-related disputes usually turn on three questions: whether property rights were transferred and to what extent; whether the author's personal non-property rights were violated — for example, alteration of the work without consent; and whether the royalty is correctly determined where the work belongs to fine art. Each question requires a documentary basis — sale terms, a contract or the platform's rules.
The right of withdrawal is a separate risk: the author may demand the cessation of the use of the work, but this happens at the author's expense, and the author must compensate the user's damage, including lost profit (Article 17, part 2). For a business model built on a token this means that an author's withdrawal can prove expensive for the project. Mature projects therefore fix the scope of transferred rights and withdrawal scenarios in advance, at the documentation stage.
Frequently Asked Questions
Does buying a token transfer copyright?
No — property rights are transferred only by contract (Article 36), and personal non-property rights remain with the author even upon transfer (Article 17). Unless the sale terms say otherwise, the buyer owns only the token.
May the work be altered?
Not without the author's consent: the integrity of the work is a personal non-property right, and the author may resist alterations (Article 17). Alteration is admissible only with the author's permission.
How is the resale royalty calculated for fine art?
In brackets: from 500 to 100,000 GEL — 4%; from 100,000.01 to 400,000 — 4,000 GEL plus 3% of the excess; from 400,000.01 to 700,000 — 13000 GEL plus 1% of the excess (Article 20). The royalty is paid by the seller.
Can the author withdraw the work?
Yes — the right of withdrawal belongs to the author, but it is exercised at the author's expense, and the author compensates the user's damage, including lost profit (Article 17, part 2).
How We Help on Legal.ge
The Legal.ge team assists projects connected with unique digital tokens in preparing their documentary basis: drafting sale terms and licences, contracts for the transfer of property rights, royalty schemes and dispute conduct — for authors, platforms and buyers alike. We record precisely what is transferred and what remains, so that every transaction is transparent. Contact us to discuss your project.