2022 is the year for minting, buying, and selling NFTs. Understanding your intellectual property rights has never been more essential. Unfortunately, while many want to invest in NFTs, few understand the potential NFT copyright issues on the horizon. Tim spoke on this exact issue back in November 2021 before an international audience of intellectual property attorneys at the International Intellectual Property Law Association (IIPLA)’s annual meeting, so we decided to share some of those insights here.
In this post, Tim Billick and the TBillick Law team will walk you through the NFT intellectual property pitfalls you should be aware of when minting or buying NFTs. But before we dig in, let’s first examine some NFT legal issues and IP basics.
What Are NFTs?
NFTs stand for “non-fungible tokens.” These are digital assets that represent real-world items—for example, works of art or articles of clothing. NFTs can be minted from any source or work and are bought and sold online. They are most often bought and sold using cryptocurrency.
NFTs are unique in that they allow a buyer to own the original digital work. Each NFT contains an authenticating token and can be identified on the blockchain. Blockchain technology is one of the many NFT intellectual property issues that make NFTs both attractive and complex. NFTs can be tracked and authenticated using blockchain, so they have only one, easily authenticated owner. This gives an NFT real value, even if others can view the token and enjoy it.
NFT Legal Issues
No Guaranteed Transfer of Underlying NFT Copyright
Similar to the purchase or sale of other types of works, the purchase or sale of an NFT does not necessarily transfer the work’s copyright that underlies the NFT to the buyer. NFTs are a recent phenomenon, so the answers to the NFT copyright question are only beginning to unfold.
Minting an NFT can be categorized as copying or even creating a derivative of the original work. Therefore, the actual *copyright* holder is the only one with the authority to transform their original work into an NFT. That said, one need only peruse social media to observe the outcries of dozens of artists who have been subject to individuals offering the artists’ works as NFTs without permission.
If you have purchased or minted an NFT and have concerns about the underlying copyright, contact TBillick Law. As an experienced Seattle-based intellectual property lawyer, and having educated other lawyers on the subject, Tim is on the cutting edge of copyright issues associated with NFTs.
Possible Misuse of Trademark
Trademarks are often reproduced in NFTs. Think of images of Nike shoes or Louis Vuitton handbags. More often than not, these marks are reproduced without the trademark owner’s consent. This unauthorized use raises questions of possible trademark infringement.
A literal interpretation of trademark law might expose trademark holders to serious NFT intellectual property issues. Because the goods and services offered in the metaverse and the real world are different, it would be possible for a court to find no trademark infringement. In that case, it could be open season on otherwise well-protected brands.
If you have concerns about protecting your brand, TBillick Law can help. Our experienced team can help you identify ways to monitor NFT marketplaces and track your trademarks to help protect yourself in the metaverse and beyond.
How TBillick Law Can Help
Counselor. Musician. Builder. Geek. Tim Billick is the kind of IP lawyer who understands the business of intellectual property because he lives it every day. Our team can help guide you through the strange new world of NFTs and protect your intellectual property as you do it. Contact us today for a consultation.