NFT Trademarks: a government study that BAYC could help with

Welcome back to Decentra Daily, where today we are talking the government...and not just about The Fed crushing the global economy!

Estimated read time: 2 minutes 30 seconds

Table of government incompetence:

• How do trademarks apply to NFTs?

• Winner and Losers of the day

How do trademarks apply to NFTs? A government study wants firmer answers by July 2023

A joint study by the U.S. Copyright and Trademark Offices is set to examine NFTs, focusing on “how NFTs fit into the world of intellectual property rights.”

Interestingly, senators Patrick Leahy and Thom Tillis, who sit on an Intellectual Property subcommittee and called for the study, do seem open to looking at how NFTs might evolve property rights in the coming years.

Leahy and Tillis’ letter, filed last month, asked for the study to answer these 5 NFT questions by July 2023, each of which has a pretty wide scope:

(1) How do NFTs in their current form affect IP?

(2) How might NFTs affect IP in the future?

(3) For current and future NFTs:

• What happens to the IP of linked assets when NFTs are transferred?

• Does licensing cross from an asset to an associated NFT?

• What IP rights and infringement protection are available to NFT creators, especially if they aren’t the creator of a linked asset?

(4) How can NFTs help secure and manage IP rights?

(5) How do current copyright protections apply to NFT marketplaces and are they enough?

Why are lawmakers and politicians concerned?

Potential headaches for prosecutors:

• Are there trademark infringements when NFTs are used as receipts for physical goods

• Are NFTs shielded by copyright laws like fair use or the first sale doctrine?

• Do NFTs that reference movies, music, and art infringe on prior copyright status? (Does the fact that Tarantino reserves the right to the Pulp Fiction screenplay mean that he has a claim over all Pulp Fiction NFTs?)

Also, federal bodies are keen to work out how – or if – NFTs can fit into existing legal structures, meaning that they need an agreed legal definition.

One judge, ruling on the Hermès NFT court case this May, defined NFTs as “units of data stored on a blockchain that are created to transfer ownership of either physical things or digital media,” specifiying that assets do exist separately from their associated digital token.

The same judge suggested that trademark rights for physical goods may extend into the metaverse.

Will the study results change anything?

Critics of the Copyright Office study say that, with a year-long deadline, any conclusions could be outdated by the time they’re published, or answered by real-life precedent as marketplaces continue to evolve – plus, there’ll likely be a whole bunch of new questions to ask and answer about digital property in a year’s time.

A case that could establish some form of precedent is Yuga Labs (Bored Ape Yacht Club), suing Ryder Ripps for trademark infringement, false advertising, unfair competition and cybersquatting. These allegations stem from his NFT collection RR/BAYC.

The fact that NFTs don’t fit neatly into the current understanding of IP and ownership also makes things more complex. And cases like the above have the potential to set precedent that could hurt or help NFT adoption, either way more legal clarity is needed.

Each NFT project has different IP rights associated with their project and associated NFTs, understanding the difference between the IP itself and a token that merely represents it is important, but unclear in many instances (due to legal ambiguity).

Owning an NFT doesn’t always confer full rights to a linked asset (see Wednesday’s DD on the Da Vinci NFT), meaning that proof of NFT ownership might in some instances, not get you as far as you’d think in a legal dispute – so be careful out there when purchasing NFTs, and look at the IP rights you are receiving (if you care).

Read the full story from The Fashion Law.

Winners and Losers

The projects that have stood out to us the most in the past 24 hours, the good, and bad. Only today, we have two winners and NO losers, surprise!

Winners and…. Winners?

Winner 1.0: Tableland Rigs - Floor price up 320% in the last 24 hours (0.1 ETH → 0.42 ETH)

Can’t put my finger on why I like this so much, but clearly I’m not the only one as the floor price is up 320% in the past 24 hours. It checks a lot of boxes:

• Cool Art - What seems to be a pretty fully fleshed out future desert dystopia world. I’m a sucker for dystopias, what can I say

• Interesting tech - I think the project is a showcase for Tableland, a protocol for using tables to store changeable data on the blockchain

• Upgradeable NFTs - The ability to add on to your NFT via community interaction or (I’m assuming) purchasing upgrades.

If they end up making a P2E game, I’m in.

Winner 2.0: The Asylum Halls Genesis - Floor Price up 186% in the last 24 hours (0.03 ETH → 0.086 ETH)

Been watching this one for a few days, the asylum residents have now been revealed and are a cute/scary horror themed profile pic. Little bit like goblins. What I really liked about this project was the marketing. Another no discord/no roadmap project, but they created these videos for their twitter that were creepy and mysterious about what was to come. Some of the videos had clues, and if you could figure it out you got access to…. Something? Still not sure but I liked it.

Headlines of the day

• Why are NFT platforms opening up physical gallery spaces?

• Rare CryptoPunk Sells for $2.6M as Collection Continues Resurgence

• A DAO for Diseases: How Vibe Bio Plans to Retool Biotech Funding

Disclaimer: Nothing in this article/newsletter should be considered financial advice. The purpose is to inform readers of the current trends and news in the web3 space. We encourage every reader to do their own research and not act upon information put forth by Decentra Daily.