{"id":475252,"date":"2022-07-18T16:39:06","date_gmt":"2022-07-18T13:39:06","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/will-intellectual-property-issues-sidetrack-nft-adoption\/"},"modified":"2022-07-18T16:39:06","modified_gmt":"2022-07-18T13:39:06","slug":"will-intellectual-property-issues-sidetrack-nft-adoption","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/will-intellectual-property-issues-sidetrack-nft-adoption\/","title":{"rendered":"# Will intellectual property issues sidetrack NFT adoption?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a23e9321beb0\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a23e9321beb0\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/will-intellectual-property-issues-sidetrack-nft-adoption\/#%E2%80%9D_Will_intellectual_property_issues_sidetrack_NFT_adoption_%E2%80%9C\" >&#8221; Will intellectual property issues sidetrack NFT adoption? &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/will-intellectual-property-issues-sidetrack-nft-adoption\/#Is_current_law_sufficient\" >Is current law sufficient?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/will-intellectual-property-issues-sidetrack-nft-adoption\/#Growing_pains_of_a_new_industry\" >Growing pains of a new industry?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/will-intellectual-property-issues-sidetrack-nft-adoption\/#Rising_fraud_could_prompt_a_crackdown\" >Rising fraud could prompt a crackdown<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/will-intellectual-property-issues-sidetrack-nft-adoption\/#%E2%80%9CPeople_need_to_be_educated%E2%80%9D\" >\u201cPeople need to be educated\u201d<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Will_intellectual_property_issues_sidetrack_NFT_adoption_%E2%80%9C\"><\/span>&#8221; Will intellectual property issues sidetrack NFT adoption? &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDcvM2IxZjc1OWQtNDc1Yi00Y2Q1LThjZGUtNWYyMmJkZThhYzI2LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-28d77a7a>The rapidly growing but loosely regulated nonfungible token (NFT) industry already touches many areas of human endeavor \u201cfrom academia to entertainment to medicine, art, and beyond,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.blockchainandthelaw.com\/wp-content\/uploads\/sites\/9\/2022\/07\/2022-06-09-Letter-to-USPTO-and-USCO-RE-NFT-Study.pdf\">wrote<\/a> recently two United States senators in a letter to the U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office. The legislators were requesting a study to explain how this emerging <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> fits into the world of intellectual property (IP) rights, including copyrights, trademarks and patents.\u00a0<\/p>\n<p>It is an area that some say is marked by ambiguity and inconsistent <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lication of the law, and sometimes indifference from the courts. \u201cMany feel it is time for Congress to step in and provide the predictability needed for innovation to flourish,\u201d Michael Young, partner at Finnegan, Henderson, Farabow, Garrett &amp; Dunner, LLP, told Cointelegraph.<\/p>\n<p>The joint study that senators Patrick Leahy and Thom Tillis requested from the agencies, due June 2023, has as background a recent slew of high-profile lawsuits \u2014 Nike v. StockX, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/news.bloomberglaw.com\/ip-law\/hermes-nft-artist-clash-over-whether-metabirkins-is-a-trademark\">Herm\u00e8s v. MetaBirkins<\/a> and Miramax v. Quentin Tarantino \u2014 that raise some sticky questions about NFT creation, ownership and dissemination.<\/p>\n<p>In one case, an NFT was minted \u2014 without permission \u2014 featuring sneakers with a Nike Swoosh. In another, NFT-related digital images were created of Herm\u00e8s\u2019 Birkin handbags, covered in fur, not leather, but also unlicensed. In a third, a famed movie director created NFTs from a film he directed but didn\u2019t own.\u00a0<\/p>\n<p>A \u201cwave of litigations has already begun for trademarks and copyrights, and courts are grappling with applying principles crafted long before the NFTs existed,\u201d Anna Naydonov, partner and co-chair with Young of Finnegan\u2019s Blockchain, NFTs, and Other Digital Assets industry group, told Cointelegraph. <\/p>\n<p>\u201cThe lack of clarity surrounding patent subject matter eligibility for software remains a top concern for NFTs and other crypto-based innovations in both the U.S. and abroad,\u201d said Young. Much the same could be said about trademark and copyright issues, especially the secondary liability of marketplaces like OpenSea, as well as metaverse virtual worlds and similar platforms where copyright infringement can occur, added Naydonov.<\/p>\n<p>Still, not all agree that new legislation is needed. Some believe that government intervention in the U.S. and elsewhere would be not only superfluous but could stifle NFT adoption and innovation.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_current_law_sufficient\"><\/span>Is current law sufficient?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The real problem, as Gina Bibby, partner at Withers Bergman LLP, told Cointelegraph, could simply be \u201ca lack of education about what NFT ownership really means.\u201d A key thing that people seem to overlook is that:\u00a0<\/p>\n<blockquote><p>\u201cAbsent a contractual agreement \u2014 e.g., smart contract \u2014 that expressly includes intellectual property (IP) rights, purchasing an NFT does not convey any copyright, patent or trademark rights or even ownership interests in the physical world asset on which the NFT is based.\u201d<\/p><\/blockquote>\n<p>Are there, arguably, some false ideas out there about NFT ownership and puzzlement over who can do what? <\/p>\n<p><strong><em>Recent:\u00a0The regulatory implications of India\u2019s crypto transactions tax<\/em><\/strong><\/p>\n<p>\u201cYes,\u201d Eric Goldman, associate dean for research and professor at Santa Clara University School of Law, told Cointelegraph. \u201cIn the offline world, the buyer of a painting or sculpture doesn\u2019t automatically buy the associated copyrights.\u201d That is unless the copyright is separately transferred, the artist or sculptor \u201ccan commercialize depictions of the art\/sculpture and prevent the chattel owner from doing the same.\u201d Even if the average consumer isn\u2019t always aware of this, the U.S. Copyright Act expressly <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/17\/202\">states<\/a>:<\/p>\n<blockquote><p>\u201cOwnership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied.\u201d<\/p><\/blockquote>\n<p>Goldman sees \u201ca lot of erroneous claims\u201d being made these days to the effect that \u201cthat owning one piece controls the other,\u201d i.e., the NFT owner controls the IP or the IP owner controls the NFT. People often fail to recognize that, just as in the physical world, a piece of art and the item\u2019s copyright are often owned by two different people, so too \u201can item of IP and its NFT can and often will be owned by two different people.\u201d <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Growing_pains_of_a_new_industry\"><\/span>Growing pains of a new industry?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>But, every new technology brings with it novel questions, and maybe the current debate is just another example of technology moving faster than the law. Will regulators and lawmakers struggle to keep pace with changes?<\/p>\n<p>\u201cIt\u2019s the opposite,\u201d Joshua Fairfield, a professor of law at Washington and Lee University, told Cointelegraph. \u201cThe law is already in place and has been for hundreds of years. Property is one of the oldest disciplines of law. There is no reason at all that someone cannot own an NFT like we own cars, houses, stocks, or the money in our bank accounts \u2014 after all, each of those property interests is also an entry in a database of who owns what.\u201d<\/p>\n<p>The problem here, Fairfield continued, is that intellectual property law grew to overshadow personal property interests online, telling Cointelegraph: <\/p>\n<blockquote><p>\u201cIf I own a book, I own the copy, despite the fact that the book contains copyrighted material. But online, I don\u2019t own an e-book because too many courts only recognize the intellectual property interest.\u201d<\/p><\/blockquote>\n<p>That is beginning to change now, however, as courts recognize that intangible assets like domain names or NFTs are no different from any other kind of personal property interest that we want to own, added Fairfield.<\/p>\n<p>In Goldman\u2019s view, the problem here \u201cis similar to the issues about domain name ownership we wrestled with a quarter-century ago.\u201d A domain name can be a piece of personal property even if it&#8217;s not protected by trademarks, he said, predicting that \u201cthe non-IP rules developed to protect those domain name owners will help resolve NFT ownership disputes.\u201d<\/p>\n<p>Bibby, for her part, doesn\u2019t agree that intellectual property law has grown to overshadow personal property interests online. \u201cWhen intellectual property laws are applied in a thoughtful and measured way, other interests including personal property interests are likely to be respected.\u201d<\/p>\n<p>Confusion along these lines isn\u2019t restricted to NFTs, of course. A decentralized autonomous organization (DAO), SpiceDAO, recently paid over $3 million at auction for the unpublished manuscript for the Dune film, intending to make an animated limited <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> about the book for a streaming service. <\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">We won the auction for \u20ac2.66M. Now our mission is to:<\/p>\n<p>1. Make the book public (to the extent permitted by law) <\/p>\n<p>2. Produce an original animated limited series inspired by the book and sell it to a streaming service<\/p>\n<p>3. Support derivative projects from the community <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/g4QnF6YZBp\">pic.twitter.com\/g4QnF6YZBp<\/a><\/p>\n<p>\u2014 Spice DAO (@TheSpiceDAO) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/TheSpiceDAO\/status\/1482404318347153413?ref_src=twsrc%5Etfw\">January 15, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Then it learned, too late, that in the U.S. and Europe, buying a manuscript of creative work does not grant the buyer its copyright too. SpiceDAO was ridiculed on <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a>, among other places, for its oversight. As Andrew Rossow, a technology attorney and Ohio law professor, told Cointelegraph in February:<\/p>\n<blockquote><p>\u201cThe Spice DAO and Dune fiasco was a landmark in its own right that sends a very powerful message to everyone involved in the NFT space \u2014 creator or owner. The $3-million mistake that was made proved that intellectual property\u2019s dominion in digital fine art is essential to its success and longevity.\u201d<\/p><\/blockquote>\n<p>Asked about needed clarifications, whether through laws or other means, Fairfield answered that people need to know the owner of an NFT owns the copy of the photograph or artwork, \u201cjust like we own a car or a painting or a book, and can sell it and capture its rise in value regardless of attempted restrictions hidden in license agreements.\u201d\u00a0<\/p>\n<p>\u201cRight now, when people put millions of dollars into an NFT, they&#8217;re being told they don\u2019t even own the right to capture the rise in value. That makes investment unsustainable,\u201d he said. What is needed is \u201crecognition that ownership of an NFT is an ordinary everyday ownership of personal property,\u201d added Fairfield, further explaining:<\/p>\n<blockquote><p>\u201cIt means NFTs pass to heirs after death. If an NFT is stolen, the owner can go to court to get it back. If an NFT is damaged or destroyed the owner can get its value from the person who did it. An owner knows that they will be able to capture the rise in value of the NFT if it turns out to be a good investment.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Rising_fraud_could_prompt_a_crackdown\"><\/span>Rising fraud could prompt a crackdown<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Some believe that there are risks if governments get too aggressive with regulatory and legislative reforms in emerging technologies. \u201cGovernment intervention into new technological arenas always creates a risk of misregulation that harms or hinders the development, especially when the technology is rapidly evolving or the government regulators don\u2019t understand the technology,\u201d noted Goldman.\u00a0<\/p>\n<p>But, the status quo may not be sustainable here because at present, \u201cNFTs are being used to perpetrate consumer fraud,\u201d added Goldman. \u201cWhen the fraud numbers are large enough, the government must intervene to protect consumers.\u201d<\/p>\n<p>This, in turn, could lead to over-regulation. \u201cUnfortunately, the fraudulent angles of NFTs have a real risk of overshadowing the activities of the legitimate NFT players. The legitimate players are potentially going to be hurt by government crackdowns even though they were doing the right thing all along,\u201d Goldman said. <\/p>\n<p><strong><em>Recent:\u00a0Burdensome but not a threat: How new EU law can affect stablecoins<\/em><\/strong><\/p>\n<p>\u201cSuch risks always exist, which is why intellectual property and marketing lawyers in this space hope that the U.S. Patent and Trademark Office, the U.S. Copyright Office, the Federal Trade Commission and\/or legislators work closely with key industry stakeholders to understand the main legal challenges and the technology behind NFTs, and come up with workable solutions,\u201d said Young. Naydonov added that \u201cregulation and legislation without input from the industry could set the U.S. back as compared with other jurisdictions.\u201d <\/p>\n<h2><span class=\"ez-toc-section\" id=\"%E2%80%9CPeople_need_to_be_educated%E2%80%9D\"><\/span>\u201cPeople need to be educated\u201d<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Bibby, however, sees no need for wholesale legal reform. What is required instead is \u201ca discussion about what we currently know about NFT ownership,\u201d she told Cointelegraph. People need to be educated and understand that a basic NFT purchase brings with it no copyright, trademark or patent rights \u2014 unless<em> <\/em>express language declares otherwise. She added:<\/p>\n<blockquote><p>\u201cThroughout modern history, laws have been tested by innovation and survived. The U.S. Constitution is a perfect example. The real need is to understand how existing intellectual property laws apply to recent innovations like virtual assets, including NFTs, virtual goods and the like.\u201d<\/p><\/blockquote>\n<p>Moreover, decisions in several pending court cases, including Nike v. StockX and Herm\u00e8s v. MetaBirkins, will probably be sufficient to \u201cresolve many of these outstanding questions,\u201d Bibby told Cointelegraph.<\/p>\n<p>Meanwhile, the senators gave the USPTO and Copyright Office until June 9, 2023, to complete their study, but given the breathtaking speed at which NFTs and digital assets are being created and disseminated, the market itself might provide some answers before the agencies\u2019 joint work ever sees the light of day.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/will-intellectual-property-issues-sidetrack-nft-adoption\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Will intellectual property issues sidetrack NFT adoption? &#8220; The rapidly growing but loosely regulated nonfungible token (NFT) industry already touches many areas of human endeavor \u201cfrom academia to entertainment to medicine, art, and beyond,\u201d wrote recently two United States senators in a letter to the U.S. Patent and Trademark Office (USPTO) and the U.S&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":475253,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDcvM2IxZjc1OWQtNDc1Yi00Y2Q1LThjZGUtNWYyMmJkZThhYzI2LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,76717,74983,78234,74355,74712,70934],"class_list":["post-475252","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-copyrights","tag-decentralization","tag-virtual-property","tag-adoption","tag-patents","tag-regulation"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/475252","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=475252"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/475252\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/475253"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=475252"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=475252"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=475252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}