Will Intellectual Property Issues Divert NFT Adoption?

By posting NFT artwork on social media, a new owner could violate intellectual property laws. A "wave of litigation has already begun".

The rapidly growing but loosely regulated non-fungible token (NFT) industry is already affecting many areas of human endeavor "from academia to entertainment to medicine to art and beyond" , two U.S. senators recently wrote in a letter to the U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office. Lawmakers were calling for a study to explain how this emerging technology fits into the world of intellectual property (IP) rights, including copyrights, trademarks and patents.

This is an area that some say is marked by ambiguity and inconsistent application of the law, and sometimes indifference from the courts. "Many believe it's time for Congress to step in and provide the predictability necessary for innovation to flourish," Michael Young, partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, told Cointelegraph. /p>

The joint study that Senators Patrick Leahy and Thom Tillis commissioned from the agencies, scheduled for June 2023, is set against the backdrop of a recent series of high-profile lawsuits – Nike v StockX, Hermès v MetaBirkins and Miramax v Quentin Tarantino - which raise difficult questions about the creation, ownership and dissemination of NFTs.

In one instance, an NFT was created - without permission - featuring sneakers with a Nike Swoosh. In another, NFT-linked digital images were created of Birkin handbags from Hermès, covered in fur, not leather, but also unlicensed. In a third, a famous filmmaker created NFTs from...