Ownership is one of the most important aspects of non-fungible tokens (NFTs). They reflect the evolution of performance and ownership of art, content, music, in-game assets, etc. because they are digital assets with a distinct identity that can be verified on the blockchain network.
However, they have also created a new dimension to the discussion around interaction and the gray area around copyright, intellectual property (IP) and trademark laws.
In a recently highly publicized cryptographic review, the independent central crypto organization (DAO) Spice DAO was ridiculed for believing that ownership of a copy of the unpublished Dune movie script also gave it copyright. DAO had intended to create an “original animated series” inspired by the book that would be sold to the copyright-protected streaming service. The book was won at Christie’s last November for more than $3 million.
In this case, copyright laws dictate that copyright lasts for the life of creators and up to 70 years after their death, which means that the DAO cannot create an animated series without the permission of live collaborator Alejandro Jodorowsky. Cointelegraph discussed the incident with Andrew Russo, a technology attorney and law professor at Ohio State, who said:
“The Spice DAO and Dune’s failure were a milestone in and of themselves that sends a very powerful message to all those involved in the NFT space – creators or owners. The $3 million blunder proved that the dominance of intellectual property in digital art is critical to success and longevity.”
While it is no secret that ownership of NFT does not necessarily mean that the underlying copyright in the work has been transferred to the owner, this does not seem obvious to all market participants. Rousseau explained that copyright law gives an author six “bundles of rights,” or exclusive rights that collectively establish his copyrights. The first four rights are essential to NFT at the moment – the right to reproduce the work, the right to create derivative works, the right to distribute, and the right to public performance.
Marie Tachibo, director of marketing at crypto exchange Gate.io, spoke to Cointelegraph about Dion’s failure, noting that anyone who has done proper research and due diligence will know that selling a copy of the book has nothing to do with copyright. She said, “It appears that there is still a broader misconception about what NFTs are and what goes into the cost of buying or replacing NFTs in the space. As the industry evolves, educational resources and a broader understanding of the market will make this happen as well.”
Lawsuits began to appear
In this case, brands and companies have started cracking down on NFT projects that infringe on copyright, intellectual property and trademarks. On February 4, Nike sued StockX for trademark infringement of the Nike NFT sneaker. The sneaker company filed a 50-page complaint alleging that the retailer sold about 500 Nike NFT sneakers, affecting Nike’s reputation and legitimacy. In addition, shoe maker StockX was accused of selling NFT sneakers at high prices amid “purchase and ownership requirements.”
Even French luxury fashion house Hermes recently got into a legal battle with Mason Rothschild, the creator of the Hermes Birkin bag inspired by the NFT MetaBirkins bag. In its lawsuit, Hermes stated: “Defendant’s trademark MetaBirkins simply dissociates itself from the well-known Hermès Birkin trademark by adding a generic ‘meta’ prefix to the well-known Birkin trademark.” In response, the creator compared himself to Andy Warhol, who painted Campbell’s soup cans, creating art from a well-known commercial photo.
Jeff Gluck, CEO of CXIP Labs, an NFT mining platform, discussed upcoming lawsuits with Cointelegraph. Gluck is also an intellectual property and copyright attorney with over 14 years of legal experience. he decided:
“Dozens of artists are preparing lawsuits against OpenSea for selling infringing NFTs. These examples are a brief glimpse into the wave of lawsuits en route into space. But they are useful because they will ultimately help provide some guidance when it comes to clear legal standards and recommendations for space.”
Gluck also noted that one of the biggest problems NFT markets currently face is that if they create an NFT for their users and/or provide a level of regulation, they are not protected by the DMCA. ) thus can be directly sued for copyright infringement by the creators.