Intellectual Property (IP) rights have proven to be an important part of the digital world. Especially in 2022, due to the development of web3 and NFT and the resulting increase in illegal activities.
Intellectual property (IP) is a fundamentally important part of today’s economy. An ancient concept dating back to the early Middle Ages, IP first appeared in the 14th century. It is the offering of ideas about one’s property/rights, such as physical property rights or records of ownership of land or other tangible objects.
But what makes ideas special is that they are non-competitive, and this notion of non-competition is what makes ideas exciting and complex. Intellectual property has played a fundamental role in the creation of capital goods. This includes ideas and the incentives associated with funding and licensing those ideas.
It is an important part of the business model of the industrial economy. Some of the world’s largest companies have balance sheets that consist entirely of intellectual property.
But then came the Internet and the ability to copy data and information at will. This is starting to cause problems for intellectual property given that it can be stolen or hacked. New business models have emerged based on the collection of data and other information.
This led to a transition to what is called “web3,” an open source programming product and code for creating new distributed networks. web3’s underlying economic infrastructure and many of its properties are open source. This means that the old industrial intellectual property system is not used. For example, intellectual property rights continue to be a concern due to the rapid development of web3 and the non-exchange token (NFT) sector.
Web3 and the Need for IP
Blockchains are essentially a ledger mechanism for keeping track of things. People have gone through the ledger many times to determine who owns what. This is where NFT comes in as a way to record and track ownership of digital goods.
Despite the turmoil, the NFT market continues to grow through 2023; the NFT market is expected to exceed $230 billion by 2030. Rapid growth, however, comes with many obstacles. Pursuing NFT of virtual assets containing artwork, songs, or trademarks that creators no longer own or have valid licenses for can lead to serious legal problems.
A notable example of potential trademark infringement against NFTs was the lawsuit against Hermes Rothschild. The French luxury brand alleged that virtual artist Metabirkins infringed on their federally registered Birkin decal. Mason Rothschild objected that their Metabirkins are not merchandise.
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Many people ask if it is legal to take a screenshot of an NFT. So why do people buy NFTs instead of making copies of them? You can take a screenshot of an NFT just as you would take a screenshot of a portrait photo. However, each NFT is unique and trusted because it is linked to a smart contract. Blockchain technology makes it easy to verify ownership of a particular NFT.
There are already many serious discrepancies and questions about ownership. According to a Galaxy Digital report, purchasers of popular collections of non-redeemable tokens such as Bored Ape Yacht Club and Moonbirds do not legally own the intellectual property rights.
Over the past year, many brands have wondered if now is the best time to consider web3 or if it is too early to tell. Some popular brands are going all out to move forward, while others are more cautious given the unclear regulations of the space.
But this also coincides with the need to protect intellectual property rights to designs, ideas, slogans, etc. Many companies that have already integrated web3 into their business models have expressed similar interest; BeInCrypto reported that the entertainment industry is at the top of that list in early 2022.
Connecting the Dots
BeInCrypto contacted Mary Ma, Director of Strategy at MixMarvel, to shed light on this issue. Mary Ma suggested that “collective ownership may be a possible solution to the current IP dilemma.
In addition, there are two main areas of IP regulation to choose from. One is the Creative Commons Zero (CC0) license. One is the Creative Commons Zero (CC0) license, which allows artists to place their work in the public domain so that anyone can reproduce it and profit from it. The other is the “all rights reserved” or “no rights reserved” decision, which grants commercial or limited commercial rights to the owner of an NFT.
Traditionally, protection for artistic works has been granted automatically through copyright regulations and enforced by a centralized agency. In 2009, Creative Commons, an American non-profit organization, published the CC0 licensing standard. This allows creators to claim that their work belongs in the public domain.
Solutions to Consider
The creators of CC0 works relinquish ownership of these works as part of their legal experience, so anyone can use them for commercial purposes.
Mom added the following.
“Increasingly, NFT authors are choosing this ‘no-rights’ CC0 license for their projects. Contrary to popular belief, “No Rights” does not mean that the original work is worthless for unlimited copies, or that the creator can no longer make money from his or her work. In fact, it’s just the opposite.”
Robbie Bloom described a similar scenario in a July 27 tweet
By removing the CC0 license restrictions on copying, distribution, and derivative works, the self-distribution effect allows project owners to enjoy the benefits of attention without having to expend a great deal of effort to promote their work.
In general, the various projects being developed in this area require the proper use of appropriate intellectual property licenses to avoid mistakes and confusion. Regulators, in particular, are closely watching the introduction of stricter laws that could further restrict the industry.