In the past few years, cryptocurrency has received a lot of financial attention and is still getting the attention and the entire buzz. The underlying blockchain technology has been praised as a solution for everything from voting to food supply tracking by its proponents. Due to its increasing prevalence, it is very well known that every area of law will need to evaluate this technology, as this process has already has been started in some legal sectors of the country, including trademark law. Even though blockchain technology is considered a “revolutionary” technology, courts have had minimal issues applying substantive trademark law to it. Despite this, whoever the trade markers owners have built up an issue in these blockchain techniques. Crypto currency, crypto-art, and NFTs are all commonly perceived as mysterious worlds. NFTs, for instance, can act as a substitute for physical assets or as proof of validity. How does this impact intellectual property rights even though it establishes legal ownership? NFTs are a legal murky area for copyrights in particular for a number of reasons that need studying and a lot of research.
NFT Stands for
Non-fungible tokens are referred to as NFTs. They are distinct digital assets that may be traded just like any other type of property, or “one-of-a-kind” assets. While many NFTs only exist in the digital realm, some may be connected to real estate (like an oil painting or a card), allowing trade in the underlying asset without ever moving the physical item itself.
Let’s first define what NFT entails before moving on. First of all, these assets are digital tokens, which are essentially tokenized versions of currency, usually held on the Ethereum blockchain in this case. These tokens hold more data about the associated asset than other crypto coins do, though.
Copyright Trademarks
A phrase, term, or design that uniquely distinguishes your business and its goods or services can be considered a trademark. A trademark can assist in separating you from your rivals and bar others from exploiting it. There are trademarks at the state and federal levels, and each has a different registration procedure.
Original works of authorship, such as songs, novels, movies, essays, and much more, are protected by copyrights. The most important requirement is that the work must be on a tangible or digital medium, such as paper, film, or a computer file. A copyright grants you the sole authority to use a work in a variety of ways, including reproduction, sale, distribution, display, performance, and the creation of derivative works. When the original work is created, copyrights are automatically granted, but registration is advised to make the copyright claim part of the public record.
Having a trademark prevents rival businesses from registering the same or confusingly similar marks in the same classes of goods or services as yours. In addition to enabling you to utilize the ® symbol and creating a public record of your trademark ownership, registration helps you build credibility and customer confidence while deterring counterfeiters. A federal trademark also paves the path for you to register your mark in other nations and gives you more tools to enforce the mark. The absence of legislative certainty for digital assets, and notably cryptocurrencies, limits the scope of this protection.
NFT and Copyright Trademarks
NFTs have a few benefits over more conventional assets, notwithstanding the lack of regulation. For instance, compared to their counterparts in the actual world, NFTs are more liquid and simpler to transmit. Digital markets have multiplied in response to the recent increase in NFT use, catering to a wide user base and ready market. Additionally, new NFT platforms are introduced every day, with the main goals being to increase user experience, lower transaction costs, and increase the accessibility of digital assets. NFT ownership, meanwhile, still does not always imply ownership of the copyright, unlike with a physical item.
The proprietor of copyright is given exclusive rights to the underlying creative asset’s use, reproduction, distribution, public display, and performance. For instance, US copyright laws stipulate that the sole authority to transform an original work into an NFT belongs to the copyright holder. Larva Labs’ CryptoPunk NFT project, which has 10,000 distinct NFTs, filed a copyright complaint against Foundation, an NFT platform. According to CryptoPunk, Foundation is showing NFTs from its collection. Ryder Ripple, who asserts to be their creator, provided Foundation with the NFTs in question.
Even though the claim is still pending, it does highlight the difficulty caused by the absence of explicit copyright regulations in the NFT area. Reproductions and derivative works pose a challenge since they significantly widen the field of potential infringement.
NFTs also give authors the ability to demand royalties on subsequent sales of their works, something that is not generally accepted in traditional market settings. Additionally, using NFTs, marginalized producers like meme makers can profit from their popular memes.
Meme NFTs, however, does not impose any restrictions on the meme’s use or dissemination. It merely implies that those who create memes market the “original meme.” So the original picture, meme, song, music, painting, or any kind of art would be belonging to the person having the original art piece.
Conclusion
NFTs, like cryptocurrencies and blockchain, do not easily fit into established legal frameworks, such as copyright. This is partially due to the fact that blockchain technology was developed with the goal of upending established structures. The absence of widespread adoption of NFTs and blockchain technology is the other factor. Regulatory authorities will be pushed to adopt a more proactive strategy to protect creator or ownership rights through copyrights and other intellectual property protection as more individuals start to own and use NFTs. To stop copyright theft, NFT platforms will need to put in place tougher procedural controls. Even though some platforms are putting in place mechanisms for starting DMCA takedowns, they might need to go further to prevent more serious problems, such as a section 1201 lawsuit that could hold them accountable for promoting unauthorized use of copyrighted works.
