Posts Tagged: "non-fungible tokens"

On November 23, the U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office published a joint notice of inquiry in the Federal Register announcing that the two agencies would be collaborating on a study regarding intellectual property legal issues related to digital assets known as non-fungible tokens (NFTs). The announcement follows the dramatic rise in mainstream attention on NFTs due to their wildly fluctuating value, which has in turn created a great amount of confusion surrounding IP rights to NFTs and the underlying digital files used to create them.

Can something called a “Bored Ape” be embodied in a non-fungible token (NFT) and be associated with smart contracts? How could this present unique and challenging issues regarding copyright law? Over the course of the last two months, the general public has tracked what started out as a phishing scam involving actor Seth Green’s NFT from the Board Ape Yacht Club. It then evolved into a public quest to regain the NFT and the rights to develop a broadcast program based on the character depicted in the digital image. The trials and tribulations related to Seth Green’s efforts to ultimately regain his “lost” NFT made for interesting media clicks. It also raised awareness to copyright issues that are yet to be fully resolved. Seth Green may rest easy knowing he is again the rightful owner of his Bored Ape NFT, but the legal community should not be as quick to move on.

There are not many trademark cases that are of equal interest to high fashion, the art world and cutting-edge tech. The ongoing “MetaBirkin” lawsuit is unusual, however, in that it involves a designer brand and two of the latest, trending topics – non-fungible tokens (NFTs) and the metaverse. In a case that has bagged global attention, luxury design house Hermès is suing artist Mason Rothschild in New York for trademark infringement and dilution, misappropriation of its BIRKIN trademark, cybersquatting, false designation of origin and description, and injury to business reputation.

StockX, which describes its e-commerce resale platform as “[t]he current culture marketplace,” is primarily used by consumers to resell and buy sneakers, among other items. In January 2022, StockX announced its plans to launch The Vault, which uses non-fungible tokens (NFTs) to allow buyers to track ownership of physical products resold on its e-market and warrant their authenticity, including Nike shoes. Swiftly thereafter, Nike sued StockX in the United States District Court for the Southern District of New York (SDNY), alleging that StockX’s use of Nike’s famous marks in connection with its NFTs constitutes trademark infringement. Nike, Inc. v. StockX LLC, 1:22-cv-00983-VEC. In its original February 3, 2022, complaint, Nike alleged that StockX mints NFTs using Nike’s trademarks without authorization and sells them to consumers, who either believe or are likely to believe that StockX’s NFTs are connected with Nike when they are not.

If you follow Reese Witherspoon on Twitter, you may notice she has been tweeting about non-fungible tokens, or NFTs, a lot. She currently features an NFT as her Twitter profile picture (abbreviated “pfp” for those in the know). In October 2021, Witherspoon became a partner in an NFT art collection called World of Women, or WoW, which was created and illustrated by the artist Yam Karkai. Through an auction-style bidding process, the WoW collection is currently available on OpenSea, one of the largest NFT marketplaces. As of publication, an individual WoW NFT auction starts at around 7 Ethereum (ETH), the cryptocurrency used to purchase on OpenSea, which currently equates to approximately USD 20,000.

Non-fungible tokens, or “NFTs,” have captured headlines, offering the perfect mix of poorly understood technology and incredible sale prices. The first patent NFT auction by True Return Systems and the newly announced patent NFT exchange under development by IPwe and IBM could not be better timed to take advantage of the buzz. With all of the hype, companies understandably wonder whether they need to “tokenize” their patent portfolios to NFTs in this first wave simply to get ahead of the inevitable transition. For most companies, prudence counsels stepping back and letting the technologies and the markets mature. First, blockchain technology, as it currently exists, only creates clarity of ownership though harsh outcomes. Second, creating highly liquid patent license markets may interfere with the existing patent strategies of many patent owners.

From the advent of the internet, digital commodities and technologies have ceaselessly presented new hurdles for intellectual property (IP) owners and protectors. The cycle of copyright law trying, and generally failing, to adapt and keep pace with emerging technology has meant copyright stakeholders have been always at a disadvantage because legal enforcement lagged so far behind innovative infringement. But during a year in which vast swaths of life moved online, the internet has forged and driven to prominence a powerful new tool for protecting copyright owners’ unique assets: the non-fungible token (NFT).