Study Finds that Existing Law is Sufficient to Address Infringement of NFT Applications
Recently, in an NFT joint study by the United States Patent and Trademark Office (USPTO) and the United States Copyright Office. Officials found that the enforcement mechanisms currently in effect can effectively handle infringement concerns regarding non-fungible token (NFT) applications.
What Prompted the NFT Joint Study?
In June 2022, the Senate Judiciary Subcommittee on Intellectual Property issued a request for the USPTO and Copyright Office to examine:
- Current and potential applications of NFTs
- How existing intellectual property (IP) laws could apply to NFTs
- What IP challenges may arise from using NFTs
- Possible methods for securing IP rights with NFTs
After soliciting public comments, conducting multiple roundtables, and thoroughly examining case law and legislation, the joint study was concluded, and the results were released in March 2024.
The Results of the Study
The USPTO and Copyright Office are continuously engaged in efforts to examine new technologies and the impact of those technologies on IP rights. Included in the ongoing effort the joint study was requested by the Senate Subcommittee. The two Offices were directed to focus on NFTs and their potential effect on intellectual property.
The report acknowledged numerous issues raised via public comments and roundtables, including the following:
- The potential for artists to secure remuneration for resale
- The ability of trademark owners to increase the appeal of their brand
- The possibility that NFTs could promote copyright and trademark infringement
Many commenters and stakeholders expressed specific concerns about artificial intelligence (AI) and NFTs. AI-generated assets have faced patent scrutiny in recent years, and the Copyright Office launched an initiative on this issue in 2023. This study did not address AI and only focused on NFTS, although people can expect more developments on the intersection of AI and IP rights this year.
Copyright
Regarding copyrights, the study found NFTs provide an opportunity to require continued remunerations due to smart contracts. NFTs could also assist copyright owners in providing digital rights management tools as well.
Trademark
Regarding trademarks, the study found that brand owners are embracing the potential of NFTs to strengthen their brand identity. Some trademark owners are already using their trademarks in connection with the NFT markets. The study did provide USPTO guidance on how to file applications for NFT goods and services and did note the likelihood of confusion analysis in this space is still determined by the courts.
Conclusion
The study concluded that current statutory and case law can appropriately address infringement issues, and no changes are needed at this time. The USPTO and Copyright Office highlighted the need for education efforts and transparency to increase understanding about NFTs and their impact on intellectual property rights.
Ever-changing technologies and evolving legal guidelines can make navigating trademark and copyright registration challenging. If you are confused or overwhelmed by the process or want to ensure your registration is done correctly, contact the IP attorneys at EmergeCounsel. Our attorneys have helped countless entrepreneurs and businesses protect their intellectual property. Contact us today for a free consultation.