Non-fungible token in the metaverse: trend or new economy

the non fungible token, the non-fungible token, a digital file with an attached digital certificate of authenticity. It can be concerned with all kinds of files: a photo, a video, music … The difference in what we know is because of their unique nature and therefore can be money.

These NFTs are purchased, basically, as physical works, but works that you don’t have. So, in 2021, an artist known as Beeple sold a piece of digital art for $ 69.3 million.

Something to make the imagination of digital “pros” dream and run. Many NFT projects have emerged. We’re thinking in particular a blockchain -based lottery, or even an immersive adventure game created by Ben Mauro, the creator of Huxley, where you have to buy an NFT comic book. The goal is to know where the stakes are to get the most benefit, intellectually, culturally, financially …

Trademark law relating to these digital items confuses IP rights holders.

The appearance of these virtual objects, the amount of which comes in amounts that are sometimes as excessive, quickly raises concerns of intellectual property rights holders, whoever they are …

New questions have arisen about the protection of these virtual files, but also about the violations of the law related to NFTs sold by metaverse. The most well -known case, and one that has caused concern, concerns Metabirkin. Artist Mason Rothschild has actually created an NFT representing fur bags “inspired” by the famous Birkin bag from Maison Hermès. So the latter filed a complaint in Manhattan Federal Court, accusing the artist of “a digital speculator looking to get rich quick by using the Hermès brand, Birkin, to which he added the prefix Meta“.

Nike was also involved in one of the latter lawsuits when it launched a lawsuit in early February 2022 against retailer StockX, claiming that it was selling NFTs displaying Nike trademarks without permission. It is important to follow these procedures to determine the outcome because there is a lot of uncertainty for rights holders. In fact, this new world, the metaverseseems to enable its actors to escape the limitations they face in the current reality and especially the geographical and social limitations …

“This new world, with metaverseseems to enable its actors to escape the limitations they face in the current reality and especially in geographical and social limitations ”

However, the arguments are sure to increase, the scammers are already very active. In addition, the contracts before the emergence of metaverse and NFTs do not provide for this new use of creatures. So adaptation is necessary.

The steps to be taken are not easy to explain because the types of infringement vary: the most common is the infringement of the use of a trademark of an NFT in metaversethe same copying of a work sold as NFT or the duplication of an NFT resulting in copyright infringement.

Faced with these attacks, many problems arose. Mainly due to the geographical dimension that seems difficult to explain so far, but we also know:

• the difficulty of identifying the manufacturer, as well as the seller of the NFT;

• ambiguity of the possibility of retrieving the NFT withdrawal stored in the blockchain;

• and with regard to trademarks, the question relating to the possibility of qualifying violations of use as trademarks.

So it’s better to try to project yourself in this world of “the economy on DEAL“, as described by Maître Haas, in an attempt to curb the risks involved.

For copyright, the protection obtained at the time of creation, things become clearer in case law. For trademark owners, the question arises of protecting their rights for virtual objects. A reflection must really begin on all of this, but without haste, because of the ambiguity of these ideas.

It is hoped that offices and legal authorities will not differentiate between a virtual bag and a real bag. It is actually as legitimate that infringements can be allowed without obligating trademark holders to file again to obtain protection reserved for NFTs, the future of which is unclear…

THE KEY POINTS.

• The NFT is a digital file in which the digital certificate of authenticity is attached. It’s unique, cashable and virtual;

• NFT projects are proliferating and can sell immediately for millions of dollars;

• There is a lot of uncertainty for rights holders, as disputes increase over NFT fraudsters;

• The future is uncertain about the obligation of trademark holders to file again to obtain protection reserved for NFTs.

TO THE AUTHOR. Aurélie Guétin is the Director of Novagraaf’s Trademark Department in France and Trademarks, Design and Model at the Industrial Property Attorney (INPI). It is dedicated to the creation and development of intellectual property rights (filing, portfolio valuation, contracts) and their defense (formal notification, opposition, pre-litigation procedures, negotiations, disputes. administrative, violation). Aurélie and her team have an excellent knowledge of intellectual property in the luxury sector.

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