As digital technology evolves, so too does the world of investing. One of the latest waves in advanced digital technology is the world of “Non-Fungible Tokens.” Over $25 BILLION was spent on NFTs in 2021, and even with signs of those sales slowing and values dipping significantly, the world of NFTs appears here to stay.
We could spend this entire blog trying to explain the nuances of NFTs and what a “Non-Fungible Token” is, but that’s not our focus so please refer to this handy article if you’re looking for that.
If you know what an NFT is and are either already in the market or looking to dive in, it’s important to understand the intellectual property implications of these “tokens.” With NFTs being stored on the blockchain (which we defined in a previous blog), there is an added layer of nuance for these platforms. There are few court rulings addressing intellectual property rights as they relate to NFTs; at this stage it appears that established intellectual property laws will apply to NFTs similarly as they do for other scenarios.
Obtaining federal trademark protection for your NFT is possible, though there are some tricky nuances that should be considered when developing your strategy. For example, should you trademark the name of an NFT? Many people designate specific names for their NFT, market, or wallet, and securing a trademark for the name of your portfolio can give you a leg up on the competition.
How should you approach protecting a collection of NFTs? A copyright application may be the right choice to protect the collective original works of authorship. Copyright registrations allow you to pursue legal remedies from others who copy your work. Visual images, audio recordings, video clips, and other similar expressive works are eligible to obtain a copyright registration, and most NFTs fall into one of these categories.
Many companies are seeking to protect their work from being misrepresented or used in the creation and sale of NFTs. Recently, a district court ruling protected famous fashion brand Hermés in the case of Hermés International, et al. v. Mason Rothschild. In this case, Rothschild was using famous Birkin bags in the production of NFTs, and Hermés claimed trademark infringement due to the damaging nature of the use. The NFTs represented the bags as if they were made using animal fur, which Hermés argued wasn’t discernible enough from their own works and allowed Rothschild to benefit from their works. The district court ruled in favor of Hermés, upholding their previous trademark protection.
In other similar cases, companies have taken down their NFT platforms because of impending lawsuits. It’s important to consider the repercussions of attempting to capitalize on someone else’s work instead of creating your own original work in the NFT marketplace.
If you operate in this space you should be prepared to navigate these new waters. Intellectual property law doesn’t often undergo major changes. Instead, attorneys and courts find new ways to interpret the laws as they apply to new technology and forms of media. At CLARK.LAW, we aren’t afraid to take on cases involving NFTs, cryptocurrency, and other forms of digital technologies on the blockchain. Contact us for a data-driven law firm with an eye on the future.
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