Non-Fungible Tokens and Their Foreplay in Intellectual Property Rights Arena

SUMMARY OF RIGHTS RELATING TO INTELLECTUAL PROPERTY

An overview of intellectual property rights would be beneficial before delving into the paper’s subject matter. The safeguarding of intellectual property rights has grown in significance in the current globalised and knowledge-driven economy. The legal rights that safeguard intangible assets like inventions, literary and artistic creations, trademarks, and other imaginative manifestations of concepts and information are referred to as intellectual property.[i]

With protection of the inventions of the creative minds of pioneering creators and scholars, intellectual property laws got created and, therefore, someone else should not touch their products without their permission. Objectives of this endeavor are to create an ambiance which will be conducive for the ideas and solutions to thrive as well as to attract investments which will in turn benefit companies that will compete vigorously and gain a sustainable advantage by this. The gigantic theoretical scope is covered by intellectual property laws among which are trade secrets, copyrights, patents, trademarks, and other individuals’ rights which enabled producers protection.[ii]

1. “The patents are an intellectual property of the original idea of the inventions and other comparable technical creation. They in fact render the creator the absolute rights over making, utilizing and commercializing the invention during the fixed interval of time, while the disclosure of the invention to the public is provided in return.”[iii]
2. “While the former is used to protect identifiers or symbols that distinguish products or services in the marketplace, the latter is aimed at protecting signs or symbols which are used to exclusively identify a good or service.”[iv]
3. “Copyright is to original writings by authors that fall in one of the following categories: books, music, films, and software. This provies the creator with a sole licence to prepare copies of its work for distribution, display it and to create derivative works to attach to it . Trade secrets safeguard intellectual property and practical information like formulas, processes and customer lists that provides an advantage over others in terms of C Make the given sentence more expressive.”[v]

Protecting the interests of artists, inventors, and investors as well as fostering innovation, creativity, and economic progress depend on intellectual property rights. They support the equitable distribution of the advantages of creativity and invention among all parties involved as well as the preservation and protection of the rights of inventors and creators.

Nonetheless, the domain of safeguarding intellectual property rights is intricate and dynamic, necessitating a meticulous equilibrium of conflicting concerns and interests. For instance, there is conflict between the need to guarantee that intellectual property rights do not hinder competition or impede access to necessary products and services, and the need to offer incentives for innovation and creativity. There is also a tension between the need to protect intellectual property rights and the need to promote access to knowledge and information, especially in areas such as public health, education, and cultural heritage.[vi]

Artificial intelligence, blockchain, and the internet of things are just a few of the new technologies that have emerged in recent years, posing both possibilities and difficulties for intellectual property law and policy. For instance, the emergence of online markets and digital platforms has facilitated the distribution and accessibility of creative works, but it has also complicated the monitoring and enforcement of intellectual property rights. New concerns concerning the ownership and veracity of digital assets, as well as the consequences for copyright and other types of intellectual property protection, have been brought up by the usage of blockchain technology and NFTs.[vii]

Overall, the Intellectual Property Rights Arena is a complex and dynamic field that requires ongoing attention and adaptation to new technologies, business models, and legal and policy developments.

NFTs AND HOW ARE THEY LINKED WITH INTELLECTUAL PROPERTY RIGHTS

NFTs, namely, non-fungible tokens, are digital tokens that stand for special-type assets that could not be substituted, such as arts, digital music, videos or other assets in the digital world. Unlike cryptocurrencies, such as Bitcoin, which are fungible tokens and which you can hazard an opportunity with interchanging, these NFTs are non-fungible and cannot be replicated nor exchanged for something else. The fact that NFTs use the blockchain to create a permanent, hack-proof record of ownership and authenticity create a channel for the original creators and the rights holders to receive their royalties and ensure that the credit line are all attributed to the right owner.[viii]

NFTs are rapidly gaining prominence not only within art but far beyond it, with creative artists having their digital artworks as NFTs change with millions of dollars. NFTs, by now, give the creator the possibility to monetise his/her work in a brand new and innovative manner, and, furthermore, they represent a new source of income for those who used to find hard to generate income from digital content. NFTs hence, opens a new avenue of accountability, authenticity, and incorruptibility of how creative assets are resold or used.

The field of Intellectual Property Rigths under the NFTs involves the advantages and challenges on this type of digital property. On one hand, NFTs can be used to summarize and maintain the existence and authenticity of digital assets, which are made to unlawfully copy and exploit. Through the recording of permanent and immutable ownership along with real&most authentic records using blockchain technology, NFTs can be used to reduce the risks like copyright infringement and other forms of IP theft.

Interchangeably, NFTs are paving the way for IP rights and policies, therefore, IP regulations and policies have to be addressed and challenges due to NFTs also. The example is, what will be the copyright law stay like for NFTs (Non-fungible tokens)? Can those be utilized for ownership transfer of copyright properties? The matter of their taxation,how does it look like? What are the possible scenarios we can expect with regard to copyright and the creative industries in the near future?

The fact that NFTs have surfaced points out the need for us to change our traditional notion of IP Rights as it applies to the digital era. As NFTs are capable of conferring many advantages in terms of copyright and lucrativeness to creators and right holders, a large part of these tools, however, have raised new questions which will need to be answered for NFTs to be further utilized.

Author: Kaustubh Kumar, in case of any queries please contact/write back to us via email to [email protected] or at IIPRD.

REFERENCES

[i] What is Intellectual Property?, WIPO, https://www.wipo.int/about-ip/en/ (last visited May 04, 2023).

[ii] Benefits of intellectual property rights, European Commission, https://policy.trade.ec.europa.eu/enforcement-and-protection/protecting-eu-creations-inventions-and-designs/benefits-ipr_en (last visited May 04, 2023).

[iii] Patents, WIPO, https://www.wipo.int/patents/en/ (last visited May 04, 2023).

[iv] Trademarks, WIPO, https://www.wipo.int/trademarks/en/ (last visited May 04, 2023).

[v] Copyright, WIPO, https://www.wipo.int/copyright/en/ (last visited May 04, 2023).

[vi] Miriam Brett, Intellectual property must be transformed to put the public good before private profits, Open Democracy (Jul. 30, 2020, 01:32 PM) https://www.opendemocracy.net/en/oureconomy/intellectual-property-must-be-transformed-put-public-good-private-profits/.

[vii] Pravertna Sulakshya, NFT and Its Relationship with IPR, Khurana & Khurana, Advocates and IP Attorneys (Nov. 15, 2021, 04:34 AM), https://www.khuranaandkhurana.com/2021/11/15/nft-and-its-relationship-with-ipr/.

[viii] Mitchell Clark, NFTs, explained, The Verge (Jun. 06, 2022, 06:00 PM), https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq.