Who owns the intellectual property rights of NFTs?


NFTs, or non-fungible tokens, are regularly in the news these days, with some auctioning off for mind-boggling amounts. A recent and high profile example is the publication by Sir Tim Berners-Lee, the inventor of the World Wide Web, of a small number of NFTs containing part of the source code of his original Internet invention, in the form of a files accompanied by an animated visualization and a digital code poster.

NFTs often include representations of artwork or design, or other creations that were previously created and captured in a different form or medium. This can lead to difficulties regarding exploitation rights, where the owner of a TVN is not necessarily the owner of the intellectual property rights in the underlying creation or may not even have a license at all in relation to it. these underlying rights.

Technology and intellectual property expert Jon Moorhouse takes a closer look at the legal issues surrounding NFTs and their intellectual property status.

What is an NFT?

Unlike fungible (i.e. indistinguishable and interchangeable) digital assets such as bitcoin or other crypto currencies, non-fungible tokens are unique assets that cannot simply be exchanged for an identical replacement. Their authenticity is certified through “distributed ledger technology” such as blockchain. As unique digital assets, they can be very valuable and highly sought after, potentially generating additional payments to the original token creator each time the token is sold, on top of the original purchase price.

Intellectual property rights and NFT

The protection of intellectual property rights relating to DTVs is an interesting area. Just because a TVN is created and represents an underlying work of art or other creation, does not mean that the creator or any subsequent owner of the TVN will own the underlying intellectual property rights, for example the right to ‘author.

An owner of TVN should be aware that he should expressly acquire an assignment or license of the underlying rights from the creator or author of the original work or any subsequent owner of such rights, in order to be able to reproduce the underlying work itself. The owner of the underlying intellectual property rights may choose to grant a license but impose other constraints on how the work in question may be used in the NFT.

An example often used is that of the NFT for a video of a slam-dunk by famous American basketball player LeBron James, released as part of a limited edition digital trading card series of NBA clips that can be purchased. and sold on the “Top Shot” market. The dunk card may sell for a large sum of money, but the NBA still owns the copyright to the original video, and any reproduction of that video is still subject to the NBA’s licensing terms.

If you are lucky and wealthy enough to acquire one of the few NBA NFTs, you are still not allowed to edit the video moment captured in your NFT, or sell any merchandise related to your NFT, without the prior consent of the NFT. NBA. In addition, the terms of the license require you not to place the “moment” next to “images, videos or other forms of media that depict hatred, intolerance, violence, cruelty or anything else that could reasonably be considered to constitute hate speech or otherwise. infringe the rights of others.

If you violate the terms of the license, platforms like Top Shot marketplace may reserve the right to suspend or delete your account, or in the case of Top Shot, remove your NFT “moment” from its app – at its own. discretion and without you any advice.

The NFTs published by Sir Tim Berners-Lee have generated considerable interest and will undoubtedly sell for a high price.

As the owner of the copyright in the original source code, Sir Tim has no license restrictions and has the right to reproduce the code during the creation of the NFT.

Software protection

The software itself can be protected in several ways. Protection can be sought through patents if the invention is captured as a technical system implemented using particular software, rather than the software itself. More often than not, software encoding is protected by copyright in the exact expression of the encoding in any medium, and perhaps also by confidentiality – protecting the value of the encoding, or the captured algorithm (s). in coding, not sharing it with others.

In the case of the World Wide Web source code, Sir Tim made the famous decision to make his invention available to the public at the time, for the good of all: no concern for confidentiality or copying of the source code by others. .

However, if another software developer was tempted to reveal valuable source code in NFTs available to a few lucky buyers, they should think very carefully about how to handle this. It may not be possible to impose privacy restrictions on the owner of the NFT, but they should certainly impose appropriate intellectual property rights license limitations and ensure that any license restrictions have been passed on to everyone. subsequent owner.

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