Copyright 2022 Tonya M. Evans (Twitter/IG: @IPProfEvans)
On Tuesday, November, 22, 2022, the U.S. Copyright Office and the U.S. Patent and Trademark Office (USPTO) announced a joint study to examine various IP issues arising from the use of non-fungible tokens (NFTs). The Wednesday, November 23, 2022 Notice of Inquiry for the Federal Register can be found here.
This joint study follows a June 9, 2022 letter from Senate Judiciary Subcommittee on Intellectual Property leadership, Senators Patrick Leahy (D-Chair) and Thom Tillis (R-Tillis), requesting that the Copyright Office and the USPTO conduct a joint study and address issues related to NFTs and intellectual property rights in consultation with the private sector, drawing from the technological, creative, and academic sectors.
The notice seeks written public comments to several questions listed and also announces that the Copyright Office and USPTO intend to hold virtual public roundtables in January 2023.
A Closer Look at Copyright + NFTs
In late 2017 and early 2018, the era of token proliferation to leverage token issuance to raise funds to build blockchain-enabled projects (with a healthy dose of scams and unregistered securities), I began studying the intersection of copyright and blockchains, smart contracts, open source software and token standards in the Ethereum ecosystem (ERC-20 for fungible tokens and ERC-721 and later standards for non-fungible tokens).
My first law review article, CryptoKitties, Cryptography, and Copyright, presented at the 2019 BYU Copyright and Trademark Symposium and published in the American Intellectual Property Law Association Quarterly Journal, 47 AIPLA 219, 2019), examined the copyright implications of unique, scarce digital creative assets transferred and stored on blockchains, which I refer to herein generally as unique crypto assets (UCAs).
Specifically, I explored the emergence of NFTs created based on the ERC-721, a novel token standard at the time that enabled, for the first time, verifiable digital scarcity—an elusive characteristic in the world of Web 2.0. I analyzed whether ERC-721 tokens (and other non-fungible coding standards) could empower UCA holders to maintain control over their cryptographic creations in gaming, collectibles, and the full range of copyright-intensive industries, to name a few.
More recently, I examined the creative justice opportunities that might be enjoyed by systemically marginalized creatives when NFT and blockchain technology is leveraged.
- The Genesis of Creative Justice: Disintermediating Creativity, 26 Lewis & Clark Law Review 3 (2022)
- De-Gentrified Black Genius: Blockchain, Copyright & the Disintermediation of Creativity, 49 Pepperdine L. Rev. 101 (2022)
I assessed whether such web3 technologies could provide and protect the economic power and creative control the Copyright Act promised but historically failed (and fails) to secure when at odds with discriminatory practices, contractual loopholes, and statutory impediments like the copyright transfer termination right.
I hope that stakeholders from all aspect of creativity, technology, education and policy submit comments and are invited to provide testimony during any hearings in these matters. This technology has disrupted copyright-intensive industries as much as it has the financial industry. And we’ve only just begun to explore the power and promise (as well as the pitfalls), to be sure.
In working with creatives and collectors at BlackNFTArt, Umba Daima and Black@, I know firsthand how disintermediated access to platforms that connect them on a peer-to-peer basis globally and to transfer artistry for cryptocurrencies (capital assets in the US) has begun to move the needle on the income and wealth gaps (at least before the current crypto winter).
I also know that numerous issues exist for artists, collectors and exchanges: the copyright complexities in the referenced art file connected to an individual token (because the token, itself, it not the art); direct and secondary liability issues for platforms; copyminting issues; file storage; how to respond to takedown notices and decentralized file storage issues; copyright transfer termination issues; estate planning and post-mortem copyright and license management issues. The list goes on. And that is just copyright!
So there is much to discuss. What intellectual property issues do you see at the intersection of IP and NFTs?
I’ve talked about this topic to several lawyers on my podcast, Tech Intersect, so listen, subscribe, share and let’s continue to conversation:
This Article explores the intersection and disconnect between copyright law and estates law when a copyright owner dies before having the opportunity to exercise her termination right of an inter vivos copyright transfer. Specifically, I explore the impact of a statutory heir’s copyright transfer termination right on the original author’s testamentary freedom to the extent the decedent’s nonprobate disposition of assets is contrary to the “statutory will” disposition found in the Copyright Act.
Although copyright transfers made by will are not subject to a termination right, no such exception is made for an author’s lifetime transfers into vehicles controlled by the author. Examples of such transfers include those made into a performing artist’s loan-out company or a songwriter’s lifetime transfer of musical composition and sound recording copyrights into a self-settled irrevocable trust or charitable foundation.
The practical effect is that an heir (defined by the Act as a spouse, child or grandchild) who inherits the right to terminate any lifetime copyright transfer (including those just described), may exercise that right and successfully reclaim copyright ownership against the decedent’s intent to transfer copyright ownership at death to someone or some entity other than that statutorily prescribed heir.