Intellectual property (IP) rights have proven to be an important ingredient in the digital world. Especially in 2022 with the evolution of web3 and NFT and the increasing illicit activities surrounding it.

Intellectual property (IP) is a fundamentally important part of a modern economy. An ancient concept dating back to the early Middle Ages, intellectual property first emerged in the 14th century. It is securing an idea of ​​one’s ownership/right, such as physical property rights and ownership records over land and other material goods.

But the thing about ideas is that they’re not rivals, and this concept of non-rivalry makes it exciting and challenging. Intellectual property has been of fundamental importance in the creation of capital goods; things one can own related to ideas and the incentives around funding and licensing those ideas.

This is becoming a central part of the business models of the industrial economy. Some of the world’s largest companies have vast amounts of their balance sheets made up entirely of intellectual property.

But then came the Internet and the ability to freely copy data and information. It begins to create problems for intellectual property, given the ease of stealing or hacking. New business models have emerged that thrive on collecting data and other information.

This has caused a shift to what is known as ‘web3’, an open source code and programming product to create a new decentralized web. Much of the ownership and fundamental economic infrastructure of web3 is open source. That is, it does not use the old industrial intellectual property system. Therefore, IP rights remain a concern with the fast traction of the web3 and non-fungible token (NFT) sectors.

Web3 and the need for IP

Blockchain is essentially a record keeping mechanism for recording things. Humans have gone through multiple iterations of ledgers to determine who owns what. This is where NFTs come in as a way to record and track ownership of digital assets.

Despite the setbacks, the NFT market continues to expand as we move towards 2023. The NFT market is even projected to reach over $230 billion by 2030. But with the rapid rise comes numerous hurdles. Minting an NFT for a virtual asset that contains artwork, song, or trademarks that the creators no longer own or do not have a valid license can land them in serious legal trouble.

One of the examples of NFT-related potential trademark infringement holders was the Hermes Rothschild lawsuit. The French luxury brand claims virtual artist Metabirkins infringed on its federally registered Birkin emblems. Although, Mason Rothschild countered that his Metabirkins were not traded goods.

The NFT community is looking forward to the final verdict as it could become a benchmark for the use of intellectual property in NFT.

IP Recognition

Many ask whether or not it is legal to take a screenshot of an NFT and if so why do people buy the NFT and not just make a copy? People are free to take NFT screenshots in the same way that they can take a screenshot of a portrait photograph. However, each NFT is interlinked with a smart contract, making it unique and authentic. Blockchain technology ensures that ownership of a particular NFT can be easily verified.

There have already been many major discrepancies and doubts over ownership claims. Buyers of popular collections of non-fungible tokens like Bored Ape Yacht Club and Moonbirds do not legally own any intellectual property rights, a Galaxy Digital report claimed.

Over the last year, many brands have wondered if this is the best time to explore web3 or if it is still too early. Some popular brands have gone full force, while others have been more reluctant, given the unclear regulation around the space.

But this also coincides with the need to protect the intellectual property rights of projects, ideas, slogans, etc. Many companies that have already begun to incorporate web3 into their business models have raised similar interests. BeInCrypto reported in early 2022 that the entertainment industry was near the top of this list.

connecting the dots

So what is the future of IP within this industry? BeInCrypto contacted maria machief strategy officer MixMarvel, to shed some light on this matter. Mary Ma suggested that ‘collective ownership would be a feasible solution to the current intellectual property dilemma’.

Further speaking, there are two broad areas to choose from for IP regulation. One of them is the Creative Commons Zero (CC0) license. This allows artists to put their work in the public domain so that anyone can reproduce it and benefit from it. The other is a compromise between “all rights reserved” and “no rights reserved” that would give NFT owners limited commercial or commercial rights.

Traditionally, protections for works of art are granted automatically through copyright regulation and are enforced through centralized establishments. The American non-profit Creative Commons company published the CC0 standard license in 2009. This allows creators to claim that their works are in the public domain.

Solutions to consider

With the creators of works classified under CC0 relinquishing ownership of these works within legal experience, everyone can use them for commercial purposes.

Mom added:

“NFT creators are increasingly choosing this “no copyright” CC0 license for their projects in recent days. Contrary to what most people think, “no copyright” does not mean that the original work will lose its value due to unrestricted duplication or that creators will no longer be able to make money from their own work. In fact, it’s the opposite”.

Robbie Broome described a similar scenario in a July 27 tweet that read:

The removal of the CC0 license’s copy, broadcast, and secondary creation limits, the self-propagation effect, will allow project owners to enjoy drawing attention without trying too hard to promote their work.

In general, various projects brewing in the space need to adopt proper IP licenses accordingly to avoid any mishaps or confusion. Especially now, when regulators are very vigilant about crafting tough laws that could further squeeze the industry.

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