U.S. Copyright Office and USPTO Conclude Joint Study on Non-Fungible Tokens; U.S. Copyright Office, March 12, 2024

U.S. Copyright Office; U.S. Copyright Office and USPTO Conclude Joint Study on Non-Fungible Tokens

"Today, the U.S. Copyright Office and the U.S. Patent and Trademark Office (USPTO) (collectively the “Offices”) published the results of their joint study on the intellectual property (IP) law and policy implications of non-fungible tokens (NFTs). The Offices conducted the study in response to a June 2022 request from then-Chair of the Senate Committee on the Judiciary Subcommittee on Intellectual Property Patrick Leahy and Ranking Member Thom Tillis.

During the joint study, the Offices solicited public comments via a notice of inquiry, held three public roundtables, and examined existing literature and case law. 

In their report, the Offices acknowledged commenters’ views that NFTs may enable artists to secure remuneration for downstream resales of their works; aid trademark owners in expanding their brand appeal; and play a supportive role in the management, transfer, or licensing of IP rights. They also recognized concerns that buyers and sellers do not know what IP rights are implicated in the creation, marketing, and transfer of NFTs and that NFTs may be used to facilitate copyright or trademark infringement. The Offices concluded, however, that existing statutory enforcement mechanisms are currently sufficient to address infringement concerns related to NFT applications and that changes to IP laws, or to the Offices’ registration and recordation practices, are not necessary or advisable at this time. Rather, public education initiatives and product transparency play an important role in ensuring greater awareness and understanding about NFTs.

“We are pleased to share the results of our joint study with Congress, stakeholders, and the public,” said Shira Perlmutter, Register of Copyrights and Director of the U.S. Copyright Office. “The report reflects extensive input from a broad spectrum of commenters, including creators, brand owners, innovators, academics, and practitioners. We look forward to continuing to engage with stakeholders on emerging technologies and implications for IP rights.”

“NFTs offer unique opportunities for creators to leverage their IP rights but also present new challenges in keeping their work secure,” said Kathi Vidal, Under Secretary of Commerce for Intellectual Property and Director of the USPTO. “At the USPTO, we continue to work side-by-side with industry and government collaborators such as the Copyright Office to better understand the IP implications of these evolving technologies through initiatives such as our Artificial Intelligence (AI) and Emerging Technologies (ET) Partnership. We look forward to continuing these efforts and our ongoing work to ensure USPTO’s practices and U.S. policy evolve to address emerging technologies so that we best serve the needs of our nation’s creators and innovators.” 

The full study is available on the Copyright Office’s website and the USPTO’s website."

NFTs are creating trademark problems. For these Minnesota lawyers, expertise is a commodity; Star Tribune, March 8, 2023

 Nick Williams, Star Tribune; NFTs are creating trademark problems. For these Minnesota lawyers, expertise is a commodity

"For NFT creators, knowing what they can register for trademark or patent protection is not clear-cut, either. That's a significant piece of the NFT-law equation, considering the U.S. Patent and Trademark Office has received more than 10,000 trademark applications for NFT-related goods and services over the last few years, said Kathi Vidal, undersecretary of commerce for intellectual property and director of the U.S. Patent and Trademark Office, during a recent online panel.

"And we expect that number to grow," she said.

The U.S. Patent and Trademark Office and U.S. Copyright Office are working on a study with input from industry experts to determine how the nation should proceed with NFT laws. The study, a response to a request from the U.S. Senate subcommittee on intellectual property, will help officials determine what policies are to be supported, and what position the U.S. takes on the matter, Vidal said."

Trademarks in the metaverse — artistic expression or commercial product?; Reuters, January 5, 2023

Dorothy R. Auth

, Howard Wizenfeld

 and A.J. Harris

, Reuters; Trademarks in the metaverse — artistic expression or commercial product?

"While the Rogers decision was initially limited to movie titles, courts have variously expanded its application to books, songs, video games, and even commercial items such as dog toys, with particular expansion occurring in the 9th U.S. Circuit Court of Appeals. The extent of its scope is now at issue at the U.S. Supreme Court. While virtual goods present issues different from physical goods, how courts determine the metes and bounds of the Rogers test will be determinative of how NFTs are analyzed."

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.”"

How does copyright law affect the sale and distribution of NFTs? (rerun); Marketplace, January 2, 2023

KIMBERLY ADAMS AND SASHA FERNANDEZ, Marketplace; How does copyright law affect the sale and distribution of NFTs? (rerun)

"Non-fungible tokens exist in a gray area of copyright law … for now. “I think most of the people buying NFTs have no idea what it is they're actually buying,” says Aram Sinnreich of American University."

Some of Trump’s New NFTs Look Like Photoshops of Google Search Results; PetaPixel, December 16, 2022

JARON SCHNEIDER, PetaPixel; Some of Trump’s New NFTs Look Like Photoshops of Google Search Results

"After hyping a major announcement, Donald Trump revealed his next major project: NFTs. But reverse image searches of some of the “digital trading cards” revealed them to be edits of clothing easily found in Google search, raising copyright questions...

While these images aren’t what most would consider to be the height of photographic art, they are still photos that are presumably owned by a manufacturer and using images — even e-commerce photos — without permission in this manner brings up copyright questions: it may not be legal, not to mention unethical, to just take photos off web stores, turn them into “art,” and then sell them for $99 each.

Gizmodo says it reached out to the manufacturer of both pieces of clothing to ask if either granted the former U.S. President permission to use their images, but neither immediately responded." 

The Owner Of Seth Green's Stolen Bored Ape Said They Have No Plans To Return It; BuzzFeedNews, May 25, 2022

Sarah Emerson, BuzzFeedNews; The Owner Of Seth Green's Stolen Bored Ape Said They Have No Plans To Return It

"BuzzFeed News reported on Tuesday that the theft of Green’s NFTs could present complications for his forthcoming series, White Horse Tavern, which incorporates characters from the actor’s extensive NFT collection. It’s possible that after losing his Bored Ape to a phishing scam this month, Green also lost his license to commercially adapt the monkey. In what has become something of a hostage scenario, Green has since tried to negotiate the return of what he has called his “kidnapped” ape."

What Is Happening to the People Falling for Crypto and NFTs; The New York Times, May 5, 2020

Farhad Manjoo, The New York Times; What Is Happening to the People Falling for Crypto and NFTs

"In the past year Yuga Labs, the well-funded start-up that makes Bored Apes, has embarked on a parade of new and even farther-out digital spinoffs of its simians. Its latest ventures have highlighted the head-scratching, money-burning, broken-casino vibe of what’s being called the internet’s next big thing. Cryptocurrencies, blockchains, NFTs and the constellation of hyped-up technologies known as “web3” have been celebrated as a way to liberate the internet from the tech giants who control it now. Instead what’s happening with Bored Apes suggests they’re doing the opposite: polluting the digital world in a thick haze of errors, swindles and expensive, largely unregulated financial speculation that ruins whatever scrap of trust still remains online...

But how many people have to lose their shirts before we realize that web3 isn’t a solution to any of our problems?"

Trademark and copyright considerations for NFTs; Reuters, May 2, 2022

Sharon Urias, Reuters ; Trademark and copyright considerations for NFTs

"NFTs are mostly used to verify ownership of digital goods. An easy way to understand NFTs is to think of them as unalterable certificates of authenticity for digital goods. For example, if someone purchases a piece of digital art, the NFT acts to validate and verify ownership and authenticity of the artwork. In the "real world," the closest analogy is an autographed original painting that is authenticated by the artist's signature or a certificate of authenticity issued by a reputable source...

One common question asked by clients is whether, when they purchase NFTs, they also obtain the copyright associated with it. The answer is: Not necessarily. It is important to understand what is included in the smart contract that confers the purchaser's rights to the digital asset. Similar to the purchase of a physical painting in our analogy above, although the purchaser has acquired the right to display the work, and to resell it, ownership of the copyright is not automatically conveyed.

The artist owns the copyright unless the author assigns it to the purchaser...

NFTs present interesting and novel questions for trademarks as well...

One of the questions to be resolved is whether traditional trademark legal doctrines, such as the first-sale doctrine, protects a seller, such as StockX, or whether the NFTs are new, distinct products that seek to capitalize on the trademark owners' marks...

It is always challenging for the law to keep pace with the expansion and development of new technologies and innovations. It is no different with NFTs. With the increased growth of NFTs, the need for protection also grows. Although NFTs present many opportunities for businesses, it is essential that NFT sellers clearly delineate in the smart contract what is and is not permitted with respect to intellectual property rights. In that way, both NFT sellers and buyers will be able to protect themselves and best monetize these assets."

COPYRIGHT, WHAT YOU NEED TO KNOW; Hackaday, February 4, 2022

Jenny List, Hackaday; COPYRIGHT, WHAT YOU NEED TO KNOW

"Last week brought the story of a group of crypto enthusiasts who paid well over the going rate for a rare sci-fi book, then proposed encoding scans of all its pages in a blockchain before making and selling NFTs of them. To guarantee their rarity the book was then to be burned. Aside from the questionable imagery surrounding book burning in general, one of the sources of mirth in the story was their mistaken idea that in buying a copy of a rare book they had also acquired its copyright rather than simply paying too much for a book.

It’s an excuse for a good laugh, but it’s also an opportunity to talk about copyright as it affects our community. I’m not a lawyer and I’m not here to give legal advice. Instead this is based on the working knowledge gathered over decades working in the content publishing industries."