Trademarks and NFTs
And create value
As we explained before, a non-fungible token (NFT) is not a form of intellectual property (IP). Instead, it’s more like a receipt for a single piece of intellectual property, to show you own it — like a pink slip for a car or the deed to a house.
Although NFTs are not IP, they are surrounded by a world of IP rights.
For example, NFT art is created by an artist (or by an AI using model components created by an artist). As we mentioned earlier, and as the New York Times reported:
Artist Mike Winkelmann, also known as Beeple, just sold an NFT to a record $69.3 million, the third-highest price achieved by a living artist. The sale, at Christie’s, of the purely digital work was the strongest indication yet that NFTs, or “non-fungible tokens”, have taken over. art market by storm, making the leap from specialized websites to major auction houses. Beeple, a newcomer to the fine art world who first heard of NFTs five months ago, is the most high-profile artist to profit from the huge sales boom of these high-profile products. but misunderstood.
If the party selling the NFT is not the same as the artist (as in the case of Beeple), then the actual artist must sell or license their IP rights to the NFT publisher – just like an author would sell or license the rights to a novel to a traditional book publisher.
Things are complicated in the IP/NFT world at the moment because NFT rights weren’t on anyone’s radar when a lot of IPs were created, and are therefore not covered by the contracts established at the time.
As we discussed in this BlogQuentin Tarantino shoots seven scenes from his film’s script pulp Fiction into non-fungible “secret” tokens. His handwritten script is a tangible artifact, which he owns, but the words in it are IP. Miramax, owner of the film version of pulp Fictionclaims that the NFT would infringe his rights.
Like Ledger Information reports,
Yuga Laboratoriesthe founding company of Bored Ape Yacht Club NFT collection, has purchased the intellectual property (IP) rights to the non-fungible token (NFT) collections CryptoPunks and Meebits from Larval laboratories. Yuga Labs now also has 423 CryptoPunks and 1711 Meebits. A key aspect of the deal is that CryptoPunk NFT owners will now be able to commercially exploit the intellectual property rights of their characters.
As the article notes,
CryptoPunks was one of the first NFT projects to attract a digital community of loyal followers. In June 2017, its founders launched 10,000 cartoon-like digital characters, one of the first NFT collections ever, which were free on a first-come, first-served basis. It took a while for the project to kick off, but several individual CryptoPunks have sold for millions of dollars since then. The cheapest sell for around $182,000.
(It is also important to note that the NFT market is extremely volatile and prone to fraud. As The Independent reported, NFT sales have fallen 92% since September.)
NFT publisher Bored Ape Yacht Club (BAYC) recognized early on the value of the intersection between NFTs and intellectual property. Like Ledger Information Remarks,
Individual owners of Bored Apes have partnered with brands to use their NFTs almost like a celebrity in the metaverse. music artist Timbaland started a music label based on Bored Apes with some of the collectibles as artists. Universal music started a music band in the metaverse with four monkeys as band members. blockchain game company Animoca announced a play-to-earn game with Yuga Labs and Adidas bought and marked a Bored Ape. The idea is that the intellectual property of each collectible is owned and managed by its owner (which is sometimes Yuga Labs), which increases the scope of opportunities for marketing and popularizing the collections. Through each individual partnership, the profile, usefulness and value of the collection increases for each owner.
Just like the haiku above, we like to keep our posts short and sweet. I hope you have found this brief information useful.