By Tapan Sangal
One of the brightest stars on the digital horizon today is undoubtedly the NFT phenomenon. From garnering staggering valuations, enticing every major industry to embrace it, to capturing the imaginations of investors, athletes and artists, the NFT phenomenon has indeed achieved enviable success. Yet it sits in an awkward place in the current array of intellectual property laws.
NFTs, in essence, are unique digital certificates of ownership/legal rights, usually of a digital asset, that exist on blockchain networks. These digital assets represent a creator’s imagination ranging from design to art, clips, quotes to images to literary work to musical notes to symbols, and even names and anything that could be conceived. Collectibles proof of ownership and uniqueness ensures that no two NFTs are alike, bespoke items please. In the real world, these creations are regulated and protected by legal and regulatory frameworks, a.k.a intellectual property rights encompassing trademark, copyright and patent laws of the country.
By a simple screen capture function, a person could acquire a digitally displayed copy of NFT but could never prove the originality and ownership of said NFT and therein lies its value. The unique nature of NFTs is one of the factors that necessitates their protection against potential infringement issues and prevents third parties from passing off NFTs of works that are not their own. The answer to this problem lies in the concept of smart contracts.
The sale of NFTs between seller and buyer is initiated through smart contracts which are self-executing codes, running on a blockchain, ensuring that the terms of the sale have been met.
These smart contracts could be designed in such a way that once the NFT is transferred to the buyer, the seller and/or the original creator would not be able to reproduce, make copies, publicly perform, exhibit or draw inspiration from the original work. of art. External data triggers such as “DPI research reports” could also be pushed into a smart contract (“Oracle data in a smart contract via an API” in technical language), validated by a trusted third party and based on this data. pushes, the smart contracts would bridge the chasm between the real world and the digital world.
IP offices should include specific NFT protection strategies as part of IP protection protocols to bridge the gaps between the digital and real worlds. The evolving NFT space is filled with ambiguity and uncertainty that can be addressed if the nuances at the intersection with the IPR are addressed competently.
The author is Founder and Chief Evangelist, P2E Pro Pvt Ltd