NFTs & Blockchain: What It All Means for Patents and Copyrights
In a year when artists could not perform live, non-fungible tokens, or NFTs, exploded in popularity. Right now, it is difficult to predict whether NFTs are a pandemic-era fad, or if they represent a fundamental shift in perceptions of ownership. But today, product endorsements and licensing deals aren’t the only way for entertainers and athletes to make big money from their intellectual property – they can also issue blockchain-based securities to bring in more cash.
Liquidity in markets for cryptocurrencies like bitcoin is opening a new door for musicians and athletes to issue digital tokens in exchange for money. These tokens — called non-fungible tokens — are a unit of data stored on a subcategory of a ledger data structure, called a blockchain. The blockchain certifies the digital asset to be unique and therefore not interchangeable. Blockchain is used for the authentication of digital currency transactions, and backed by copyright, trademark or other IP assets. Some of the most successful NFTs have been new album releases, but old memes and photographs as well as Tweets are being exploited.
NFTs should be thought of as certificates of ownership for virtual assets. NFTs can contain “smart contracts” (software code) that dictate the terms of sale between the original purchaser and seller, and any potential future sales. The distinction between an NFT and the digital asset it certifies is an important one. While the receipt of the NFT transaction is reflected on the blockchain, and the purchaser can always access their NFT, the virtual asset itself usually exists elsewhere. So, although a purchaser may own their NFT forever, the underlying virtual asset may not always be within their reach.
Many purchasers and sellers have been the victims of fraud in the NFT space. While the world of NFTs is still emerging, and new issues and complications are regularly arising. This panel will discuss blockchain technology that enables NFTs, the patenting of blockchain technologies, the legal standing and status of NFTs and contract/ownership issues, how NFTs are created, and why someone would collect digital files that anyone can obtain or view for free?