This article is part of a series on intellectual property, blockchain and digital assets.(1)
IP concerns should be top of mind for anyone who wants to wade into the still-murky waters of emerging technologies such as blockchain, cryptocurrencies and non-fungible tokens (NFTs). The most relevant concerns broadly surround three common types of intellectual property: copyrights, trademarks and patents. Copyrights protect the exclusive ability of creators of original tangible works (eg, art, poetry, music and novels) to use and duplicate the original work. Trademarks are any words, designs, slogans or symbols that represent a brand, product or company. Patents grant exclusive rights to inventors to use and sell their inventions (eg, designs for tools and scientific processes).
For example, NFT owners have the right to display the digital art and resell it through other blockchain transactions but do not necessarily obtain the copyright associated with the work. The same issues can arise with trademarks and patents. Buying an NFT of a cup of Dunkin' Donuts coffee does not necessarily allow the buyer to freely use the Dunkin' Donuts logo in that NFT for any purpose. Similarly, purchasing an NFT that has patented elements would not allow the purchasers to reverse engineer that technology and sell it as their own.
Without an express agreement to the contrary, the creator may retain all exclusive rights as the IP owner. NFTs are flexible in that the seller may grant a limited license to the intellectual property associated with an NFT in the terms and conditions of sale, but such licences are granted at the discretion of the seller. NFTs by their nature can be "minted" by anyone; therefore, buyers and sellers alike should be cautious and explicit about what IP rights are being transferred with the NFT.
For further information on this topic please contact Justin E Pierce, Calvin R Nelson or William Lawrence at Venable LLP by telephone (+202 344 4000) or email ([email protected], [email protected] or [email protected]). The Venable LLP website can be accessed at www.venable.com.
(1) For a brief overview of the concepts of blockchain, cryptocurrency and NFTs, see "IP, Blockchain, and Digital Assets".