This article has been written by Samridhi Chauradiya, pursuing a
and has been edited by Oishika Banerji (Team
).
It has been published by Rachit Garg.
Non-fungible tokens (NFTs) have been a prime source of discussion for over a decade now. With something new on the market, the craze for NFTs has grown, as they come with the ability to promote innovation, thereby producing revenue for both creators and purchasers. Nevertheless, as and when the NFT market gets associated with creative aspects, the deal comes with issues surrounding intellectual property rights. NFTs can ideally refer to or contain valuable intellectual property rights, such as branded goods, digital artwork, or logos created virtually. Therefore, for any kind of NFT project to be successful and safeguarded from infringement, focusing on intellectual property rights should be paramount. It is the legalisation of cryptocurrencies that can facilitate the seamless trading of NFTs in India. Legislative clearance to eliminate ambiguity in the subject-matter of NFTs is therefore appreciable. It is obvious that NFTs have become more prevalent in recent months, but when it comes to their future, the same remains questionable. Although critics worry about the market being a bubble that will burst soon, robust protection remains the only way out. This article deals with the use of NFTs for IPR protection.
NFTs are non-fungible tokens that cannot be exchanged for one another, which means that each token is unique. Fungible tokens such as Bitcoin can be changed for another Bitcoin, but non-fungible tokens are unique and hence not interchangeable. Many blockchains have NFTs, but the most popular is the .
Have you ever come across a ‘first copy’ of branded goods? If yes, you would have noticed the striking resemblance to the original branded goods. Many people are conned into buying first copies of original branded goods for ‘cheap prices’ and ‘discounted goods’ but in fact they end up paying more than their value. Lots of money is invested in building a brand. Each brand has its own story. The IP protection mechanism kicks in when these IP rights are violated, which helps in safeguarding the brand.
NFTs are uniquely identifiable tokens minted using blockchain technology that can be used to define ownership for digital assets. In the case of NFT, ownership of an asset is secured by blockchain, so no one can modify the record of ownership of the asset. NFT can be used as a digital certificate of authenticity to represent art or collectables. This is the sole reason why it requires intellectual property rights to protect itself.
Limited edition branded goods have high value because they are produced in limited numbers, but many times customers get cheated into buying fake limited edition goods as there is little or no difference between a fake and an original. This problem can be solved by attaching an NFT QR code to the product so that, in case of resale, its origin and ownership can be verified. Many companies, such as , , , , etc., that sell limited edition branded goods have started using NFTs.
One must be aware that original paintings by famous painters are expensive. It is a known fact that the value of artwork, especially paintings, shoots up when it’s artist dies because it becomes unique and there is no chance of similar artwork being produced again. A common man cannot buy Leonardo Da Vinci’s class of paintings, but they can own a fraction of them with the help of NFTs. Say a painting is worth $10,00,000 and it has 1000000 NFTs, so you can easily co-own the copyright of this art work.
NFTs can be used by musicians to tokenize their songs and albums and sell them for money. NFTs can transform how music is produced and distributed. Fans can directly purchase digital tokens and trade them. This will eliminate music producers and distributors in the coming years.
NFTs are individual digital tokens that serve as proof of authenticity and validation of ownership. They can easily replace holograms as proof of authenticity. Let’s say if I want to invest in an expensive wine, before investing in it, I can scan the QR code and verify its origin. NFTs can be freely minted on platforms such as “Open Sea”, which will motivate traders who sell GI labelled products to adopt them on a large scale.
Yes, there are fake NFTs. If you have heard about NFT in the last 5 years, you may have heard about and . These are the most popular NFTs ever sold at unreasonably high valuations, and they are also more prone to fake NFT scams. Fake NFTs are made to look similar to genuine NFTs, but they do not have the same unique attributes and cannot be verified on the blockchain.
There are all sorts of scams in NFT, such as swapping NFT at a fake exchange and theft of NFTs due to Instagram and Discord account hacks.
NFT contents can be duplicated or copy-pasted. There are doubts about whether NFTs can be duplicated / copy-pasted. But we have seen hackers cross the limit every time since the last set bar for cybercrime was reached. As per , the exists, so there are chances that NFTs can be copied and pasted. The blockchain trilemma means that not all three features of blockchain would work on a highly voluminous blockchain. The three features of blockchain are scalability, security, and decentralisation.
The growth of technology has no halt to it, and therefore, when we talk about the future of NFTs, it stands in alignment with IPR protection, for that is the only way for a secure future for NFTs. When it comes to intellectual property rights, as have been discussed previously as well, NFTs yield a number of benefits from the same, namely,
Thus, what can be inferred from the above points is that NFTs and IPRs have a bright future in the days to come if utilised properly.
Although NFTs can help us build brand reputation and instil consumers trust in their favourite brands, there are chances that due to technical glitches there can be losses as well. We have witnessed the value of various NFTs plummet because they were not marketed properly or there were no buyers for them after a certain period, even though they were published by original artists. The main difference between NFTs and cryptocurrencies is their uniqueness. NFTs are unique digital assets that cannot be replicated, while cryptos are digital assets that can be replicated. NFTs are not divisible; each NFT is unique. These features make NFTs eligible to be used for verification in the transaction of limited edition goods and the authentication of GI goods. Thus, put simply, IPR and NFTs have to work together with each other so as to have a secured future.
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It has been published by Rachit Garg.
Introduction
Non-fungible tokens (NFTs) have been a prime source of discussion for over a decade now. With something new on the market, the craze for NFTs has grown, as they come with the ability to promote innovation, thereby producing revenue for both creators and purchasers. Nevertheless, as and when the NFT market gets associated with creative aspects, the deal comes with issues surrounding intellectual property rights. NFTs can ideally refer to or contain valuable intellectual property rights, such as branded goods, digital artwork, or logos created virtually. Therefore, for any kind of NFT project to be successful and safeguarded from infringement, focusing on intellectual property rights should be paramount. It is the legalisation of cryptocurrencies that can facilitate the seamless trading of NFTs in India. Legislative clearance to eliminate ambiguity in the subject-matter of NFTs is therefore appreciable. It is obvious that NFTs have become more prevalent in recent months, but when it comes to their future, the same remains questionable. Although critics worry about the market being a bubble that will burst soon, robust protection remains the only way out. This article deals with the use of NFTs for IPR protection.
What is an NFT
NFTs are non-fungible tokens that cannot be exchanged for one another, which means that each token is unique. Fungible tokens such as Bitcoin can be changed for another Bitcoin, but non-fungible tokens are unique and hence not interchangeable. Many blockchains have NFTs, but the most popular is the .
Importance of IPR protection
Have you ever come across a ‘first copy’ of branded goods? If yes, you would have noticed the striking resemblance to the original branded goods. Many people are conned into buying first copies of original branded goods for ‘cheap prices’ and ‘discounted goods’ but in fact they end up paying more than their value. Lots of money is invested in building a brand. Each brand has its own story. The IP protection mechanism kicks in when these IP rights are violated, which helps in safeguarding the brand.
NFTs are uniquely identifiable tokens minted using blockchain technology that can be used to define ownership for digital assets. In the case of NFT, ownership of an asset is secured by blockchain, so no one can modify the record of ownership of the asset. NFT can be used as a digital certificate of authenticity to represent art or collectables. This is the sole reason why it requires intellectual property rights to protect itself.
Examples where NFT is used for IPR protection
NFT as protection against trademark infringement
Limited edition branded goods have high value because they are produced in limited numbers, but many times customers get cheated into buying fake limited edition goods as there is little or no difference between a fake and an original. This problem can be solved by attaching an NFT QR code to the product so that, in case of resale, its origin and ownership can be verified. Many companies, such as , , , , etc., that sell limited edition branded goods have started using NFTs.
NFT as protection against copyright infringement
One must be aware that original paintings by famous painters are expensive. It is a known fact that the value of artwork, especially paintings, shoots up when it’s artist dies because it becomes unique and there is no chance of similar artwork being produced again. A common man cannot buy Leonardo Da Vinci’s class of paintings, but they can own a fraction of them with the help of NFTs. Say a painting is worth $10,00,000 and it has 1000000 NFTs, so you can easily co-own the copyright of this art work.
NFTs can be used by musicians to tokenize their songs and albums and sell them for money. NFTs can transform how music is produced and distributed. Fans can directly purchase digital tokens and trade them. This will eliminate music producers and distributors in the coming years.
NFT as GI protection
NFTs are individual digital tokens that serve as proof of authenticity and validation of ownership. They can easily replace holograms as proof of authenticity. Let’s say if I want to invest in an expensive wine, before investing in it, I can scan the QR code and verify its origin. NFTs can be freely minted on platforms such as “Open Sea”, which will motivate traders who sell GI labelled products to adopt them on a large scale.
Issues with NFTs
Are there fake NFTs
Yes, there are fake NFTs. If you have heard about NFT in the last 5 years, you may have heard about and . These are the most popular NFTs ever sold at unreasonably high valuations, and they are also more prone to fake NFT scams. Fake NFTs are made to look similar to genuine NFTs, but they do not have the same unique attributes and cannot be verified on the blockchain.
NFT scams
There are all sorts of scams in NFT, such as swapping NFT at a fake exchange and theft of NFTs due to Instagram and Discord account hacks.
Can NFTs be duplicated or copy-pasted
NFT contents can be duplicated or copy-pasted. There are doubts about whether NFTs can be duplicated / copy-pasted. But we have seen hackers cross the limit every time since the last set bar for cybercrime was reached. As per , the exists, so there are chances that NFTs can be copied and pasted. The blockchain trilemma means that not all three features of blockchain would work on a highly voluminous blockchain. The three features of blockchain are scalability, security, and decentralisation.
Future of NFTs and IPR
The growth of technology has no halt to it, and therefore, when we talk about the future of NFTs, it stands in alignment with IPR protection, for that is the only way for a secure future for NFTs. When it comes to intellectual property rights, as have been discussed previously as well, NFTs yield a number of benefits from the same, namely,
- NFTs can be used to create digital scarcity, which comes as a necessity for safeguarding intellectual property rights. Digital scarcity limits the number of available tokens thereby restraining people from using the same. Unauthorised copying and distribution can be prevented in such a way.
- NFTs are an exciting new development that contributes to the growth of new opportunities that can help facilitate both businesses and consumers.
- The use of NFTs can assure original creators that their intellectual property remains exclusively theirs, thereby restraining others from copying or reproducing the same.
- Tracking usage and licensing rights are some of the few other benefits that NFTs associated with IPR can yield.
Thus, what can be inferred from the above points is that NFTs and IPRs have a bright future in the days to come if utilised properly.
Conclusion
Although NFTs can help us build brand reputation and instil consumers trust in their favourite brands, there are chances that due to technical glitches there can be losses as well. We have witnessed the value of various NFTs plummet because they were not marketed properly or there were no buyers for them after a certain period, even though they were published by original artists. The main difference between NFTs and cryptocurrencies is their uniqueness. NFTs are unique digital assets that cannot be replicated, while cryptos are digital assets that can be replicated. NFTs are not divisible; each NFT is unique. These features make NFTs eligible to be used for verification in the transaction of limited edition goods and the authentication of GI goods. Thus, put simply, IPR and NFTs have to work together with each other so as to have a secured future.
References
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Students of regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.
LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:
Follow us on and subscribe to our channel for more amazing legal content.
The post appeared first on .