In the shadow of the recent cryptocurrency crash, the question of how and how much governments should regulate the wild wild west of non-fungible tokens (“NFTs”) is especially keen. The question of “whether” left the building long ago.
Cryptocurrencies are fungible tokens. They are different from NFTs, but the two markets are related and intertwined in ways still not wholly understood. But even beyond questions of market stability (which, incidentally, has likely poked big holes in the pockets of many potential NFT investors), artists without those deep pockets are, in many cases, left out of the rush to create additional value through the use of their own works in NFTs. And while some analog artists have embraced the digital market, not all want to. There are many questions to answer in the study, but one will certainly be how to protect those artists’ IP as well as the IP of those who are participants in the NFT space.
At the request of Congress, the United States Patent and Trade Office and the U.S. Copyright Office have launched a joint study into the intellectual property issues that arise from the creation, use and sale of NFTs. The offices are seeking public comment and they are especially keen to hear from members in the industry as well as from scholars on the topic.
The Federal Register notice seeking public comments can be found here and more information on the study is available here.
Public comments can be submitted online here before the January 9, 2023 midnight (ET) deadline. If that link expires or fails to direct properly, you can navigate to www.regulations.gov, search the docket number PTO-C-2022-0035, and click the “Comment” button associated with the study.
The U.S. Patent and Trademark and U.S. Copyright Offices have also scheduled three public round tables, split by subject matter:
- Patents: Tuesday, January 10, 2023
- Trademarks: Thursday, January 12, 2023
- Copyright: Wednesday, January 18, 2023
Requests to participate as a panelist for any of the round tables must be submitted by 11:59 p.m. (ET), 12/21/2022. The study is expected to be completed by June 2023.
Three key cases will likely inform the matters to be reviewed:
- The Andy Warhol Foundation v. Goldsmith – the transformative fair use case about Warhol’s Prince series based on a photograph by Lynn Goldsmith. The US Supreme Court heard arguments in the case last October. The decision is expected late spring or early summer of 2023 (see the Supreme Court’s docket here).
- Nike Inc v. StockX LLC is examining whether use of Nike’s swoosh and the Jordan “Jumpman” logo on virtual products in the Metaverse is trademark infringement, false designation of origin and/or dilution through blurring. The case is pending before the United States District Court for the Southern District of New York.
- Also in SDNY, and also likely to be pivotal is Hermes v. Rothchild, a case examining an artists’ sale of METABIRKIN: NFTs displaying Hermes Birkin Bags.
It is hoped that the above cases and the outcome of the study will provide some clarity to a form of IP use not yet well understood.