What Are Non-Fungible Tokens/NFTs?
August 25, 2022
What Are Non-Fungible Tokens/NFTs?
On Tuesday, November 16, 2021, the Hollywood studio Miramax filed a lawsuit against director Quentin Tarantino for copyright infringement for his plans to sell nonfungible tokens based on the screenplay for his iconic 1994 film “Pulp Fiction.” Miramax’s lawsuit claimed that Tarantino’s venture would mislead others into believing that Miramax was involved in the project. Further, Miramax claimed the rights to the entire movie’s script, including deleted scenes.
What Are Nonfungible Tokens (NFTs)?
NFTs are part of the Ethereum blockchain, a cryptocurrency similar to Bitcoin. However, the Ethereum blockchain supports NFTs, which store extra information that makes them different. “Nonfungible” implies the uniqueness of the token that is irreplaceable—unlike a Bitcoin, which is fungible, and, when traded for another Bitcoin, will give you the same thing. In addition, NFTs give you something that cannot be copied: ownership of the work.
When you purchase an NFT, you buy the digital work’s certificate of ownership and authenticity. That certificate is unique because it includes a unique identification code and metadata. So, for example, anyone can buy a print of the Mona Lisa, but only one person can own the original. Likewise, like NFTs, anyone can copy the digital work, but only one person can own the NFT.
Why Are NFTs So Popular?
NFTs can be anything digital, but using NFTs to sell digital art is what excites people all over the world. People are paying thousands of dollars for NFTs; one NFT was recently purchased for $69.3 million. This is a great way to financially support artists and creators in today’s technologically advanced world. NFTs are a new concept, and some people treat the idea as the future of collecting fine art. Not only do you get bragging rights when you own an NFT, but you can hold on to it, hope that it goes up in value, and sell it to make some money (or a lot of money if you’re lucky).
What Is the Legal Significance?
Protecting your creation is essential. However, NFTs give rise to issues regarding copyright ownership and ownership enforcement. Since the sale of an NFT does not necessarily transfer the underlying copyright of the work, the original work of authorship is still protected under federal law. Ownership of copyright provides exclusive rights to the owner under 17 USC § 106—the right to reproduce the copyrighted work, prepare derivative works of the copyrighted work, distribute copies of the copyrighted work, display the copyrighted work publicly, and perform the copyrighted work publicly.
The creation of an NFT can be categorized as a copy or derivative of the original copyrighted work. Thus, the original copyright holder would be the only one with authority to transform the original work into an NFT. However, with NFTs becoming popular, artists and creators must protect their work. An experienced intellectual property attorney can help you with this.
If you need help filing a copyright or trademark, please contact Counxel Legal Firm at firstname.lastname@example.org or call us at 480-536-6122. Our team of skilled attorneys would love to help protect your ideas and hard work. Contact us today!
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