Legal dispute at the intersection of IP and NFT – Meczyki.Net

May non-fungible tokens Digital assets may revolutionize the way we own and transact in the 21st century, but they are no different from old-fashioned physical assets in one important way: they are governed by a legal framework, which in many ways contained in. 20th century.

One area, in particular, fraught with uncertainty is the intersection of NFTs and intellectual property law. Federal copyright and trademark laws were not written with NFTs in mind, which means that it is up to the courts to decide disputes pursuant to existing laws until the amended federal law goes into effect.

In the meantime, let’s review some of the most interesting and important IP legal issues currently affecting the creation, transfer, and use of NFTs.

NFTs as Trademark Infringement and Artistic Expression

One of the closest IP and NFT cases currently underway has brought a lawsuit by Herms against artist Mason Rothschild over a collection of 100 “Metabirkin” NFTs – handbags for the digital world – that Herms created that infringed their trademarks. has done.

Rothschild sought to dismiss the case, arguing that the NFTs he made and sold (for tens of thousands of dollars) were a form of artistic expression protected under the First Amendment of the US Constitution – as Andy Warhol in his Campbell Soup label used. art.

For NFT makers, it is important to think about and document what IP rights they wish to transfer as part of the sale.

While the matter still has a long way to go until its final resolution – unless it is settled in the interim – the US District Court presiding over it recently gave us a glimpse of how courts deal with trademark claims and NFTs. How can you explain the associated defenses?

Denying Rothschild’s motion to dismiss Herms’s suit, the court explained that while Rothschild’s bag-making may have been a form of artistic expression, that was not sufficient reason to dismiss Herms’s suit. The case proceeds, possibly to trial.

The court relied on a well-established body of prior cases—not involving the NFT—to reach its decision. It is noted that “the use of NFTs by Rothschild to authenticate images”, as opposed to simply selling a digital image that has not been molded as NFT, is an analysis of artistic expression defense under current law. does not change the method.