Someone tried to make a Magic: The Gathering NFT system and Wizards of the Coast isn't having it

The mtgDAO whitepaper was published on January 3, 2022. The 7-page document lays out a plan to verify the scarcity and ownership of Magic: The Gathering cards using NFTs. Yes, that is an actual sentence I just wrote. But here's what they wrote about it:

In order to be allowed to play a card in the mtgDAO format, players will need to show proof of ownership of an NFT for each card in their deck. In order to play the game, players will need to own both the NFT for their card and also the actual card used to play. We are not creating NFTs licensed by WotC, only adding an additional layer of scarcity to be able to play Wizard's cards in a new format. Players will need the actual card in order to legally play the game, whether that be a paper card, a card on Arena, or a card on MTGO. The NFTs aren't meant to establish ownership of the card, it will only be used to allow that card to be played in the mtgDAO format. We are not building gaming software or printing copies of official cards. Games will still be played using Arena, MTGO, or tabletop with real cards. NFTs can be thought of as tickets to enter tournaments or a way to represent temporary ownership in a cube draft, not as ownership of the copyrighted card. Maybe someday we can raise enough money to pay licensing fees to Wizards so these NFTs would work directly with their software, like Arena, or possibly mtgDAO could become an officially sanctioned tournament type. In the meantime, this is not needed, and we can have a lot of fun exploring this format on our own and organizing our own matches and rankings.

After the token generation event, all MTG that will ever exist will be either held by the community controlled mtgDAO treasury, or in circulation, held by community members. No more MTG can ever be created. MTG is used to control the scarcity of cards in the mtgDAO format and is locked when a player wants to mint an NFT for a card they want to play with. 

Like the recent Dune NFT debacle, the question here is about whether owning a copy of a thing also gives you the right to create a unique digital artifact of that thing, which you can then in turn trade and sell. That's the most generous interpretation I can give it, anyway.

But perhaps unsurprisingly, Wizards of the Coast — the company that makes Magic: The Gathering and owns all the affiliated intellectual property — was not fond of someone taking their intellectual property and turning into a new and separate profitable venture.

From the company's email to mtgDAO:

You appear to be operating under the mistaken assumption that the project would be legal because you would allow the reproduction of MAGIC cards in the form of NFTs only by a player who had purchased a physical card, a card on Arena, or a card on MTGO. This is not correct. It is the exclusive right of the copyright owner to reproduce the copyrighted work, such as a MAGIC card, in any format. While there is an exception in the copyright statue for making a backup or "archival" copy in some circumstances, "this privilege extends only to computer programs and not to other types of works."

Here's what mtgDAO had to say about it in a series of follow-up tweets:

I don't know shit about copyright law, so I'm trying not to discuss it much, but I'll tell you that mtgDAO NFTs being IP infringement is not intuitive to me.

Making a copy of a magic card and selling it as an NFT would be copyright infringement. mtgDAO NFTs are just a protocol tool to track who's allowed to use the card in our Magic tournaments.

It's like the difference between making a copy of a book vs giving someone an invite to bring a book to a book club. I never would have thought you would need to get permission from the author before doing the latter.

But I'm certainly not an expert.

There is actually an interesting copyright discussion to be had here. Wizards of the Coast is arguing here that I have no legal right to make a personal copy of a physical thing I own, such as a card or a book. By that logic, I can't scan my Dungeon Master's guide into PDF for my own personal use. Legally speaking, I suspect they're correct, because US copyright law is messed up and invasive (see also: the entire DMCA).

That being said, "NFTs of Magic cards I own" is still ridiculous.

Image: Michael Coghlan / Flickr (CC-BY-SA 2.0)