Friday, January 6, 2023

USPTO and Copyright Office Announce Joint Study and Request for Comment on the Impact of NFTs on Intellectual Property Rights; Ropes & Gray, December 23, 2023

Ropes & Gray; USPTO and Copyright Office Announce Joint Study and Request for Comment on the Impact of NFTs on Intellectual Property Rights

"An NFT is a unit of data stored on a blockchain that offers a unique certificate of ownership of a digital asset. They frequently represent real-world assets like art, music, and videos protected by intellectual property rights.

The interplay between NFTs and intellectual property rights has been the subject of a flurry of lawsuits over the last few years. Nike is embroiled in litigation with StockX in the Southern District of New York (S.D.N.Y) based on allegations that StockX created NFTs displaying Nike’s trademarks without authorization. Another S.D.N.Y. court recently denied an artist’s motion to dismiss trademark infringement, dilution, and cybersquatting claims brought by fashion brand Hermès over the creation of NFTs that depict the company’s Birkin bags and are branded as “MetaBirkins.” In November 2021, production company Miramax brought copyright and trademark infringement allegations against director Quentin Tarantino in the Central District of California over Tarantino’s alleged plans to auction off “exclusive scenes” from the 1994 movie Pulp Fiction in the form of NFTs. In another California lawsuit, rapper Lil Yachty claims that two music companies used his name and likeness without his permission to raise $6.5 million in venture capital funds for a line of NFTs. Yuga Labs, the creators of the popular Bored Ape Yacht Club (BAYC) NFTs, brought trademark infringement allegations in the Central District of California against another NFT creator for creating and selling a line of NFTs using BAYC imagery.

In June, the top two members of the Senate’s intellectual property subcommittee, Sens. Patrick Leahy, D-Vt., and Thom Tillis, R-N.C., called for the USPTO and Copyright Office to study NFTs and their impact on intellectual property rights in light of their growing popularity. “NFTs can be found in nearly all spheres — from academia to entertainment to medicine, art and beyond,” the letter states. “Thus, it is imperative that we understand how NFTs fit into the world of intellectual property rights — as said rights stand today and as they may evolve as we move into the future.”"

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