The arrival of non-fungible tokens (NFTs) makes it possible to sell digital works while ensuring control of intellectual property. What is the dimension of intellectual property.
For several weeks now, NFTs have been making headlines in tech news. These cryptographic tokens that are traded at a high price are used to authenticate any object as unique and unfalsifiable, thanks to blockchain technology. The promise has definitely been convincing, as NFTs have gradually spread to many fields, such as art, music, (virtual) real estate, and even sports. Nevertheless, these NFTs regularly raise the question of copyright. Can we “tokenize” an existing work that does not belong to us and reap the benefits of its sale? What happens in case of a “composite” image, featuring different elements protected by different copyrights?
Copyright in the world of NFTs
The subject of copyright in the world of NFTs is at the heart of this sale. The model and actress Emily Ratajkowski has announced the release of an NFT to reclaim her image. It is a photograph of her posing in front of a work sold by an artist and representing a photograph of her from her Instagram account, itself from a magazine image. Didn’t you understand anything? That’s normal, and it will be more telling in pictures.
Resale rights and the NFT
Visual artists have long called for a revision of the Copyright Act to introduce a resale right. The introduction of this right has even been recommended by the House of Commons Standing Committee on Canadian Heritage.
This type of copyright, which does not exist in Canadian law, would ensure that artists receive a share of royalties on the resale of their works, particularly in the context of auctions.
The application of this resale right could be facilitated by NFTs and other blockchain-based technologies. By associating an NFT, the artist will know to whom his work is sold and for what amount, and will be able to program and automate a percentage of royalties on these sales.
Without an effective Copyright Act to enforce their copyrights, digital artists would have the ability to enforce this copyright themselves. Small consolation limited only to a sub-market.
Multiple big players
IPwe has announced plans to represent patents as Non Fungible Tokens (NFTs) by working with IBM (NYSE: IBM) to create the infrastructure to represent patents as NFTs and store the records on a blockchain network. Tokenization of intellectual property (IP) will help patents be more easily sold, traded or simply exchanged and bring liquidity to this asset class for investors and innovators.
Non-fungible tokens, digital certificates of authenticity: a boon for artists with opportunity for fraudsters
Just like an electronic signature that certifies a .pdf file, the NFT contains both the coveted digital file and its certificate of authenticity. Moreover, backed by the blockchain, the date of creation, the transactions, and the current portfolio owner are publicly traceable.
This timestamp characteristic of the blockchain makes it a desirable alternative to the Soleau envelope allowing the artist to demonstrate his anteriority .
Aware of the power of these characteristics, coupled with their speculative nature, several platforms were then proposed to allow artists to create the NFT of their works.
On these well-named websites such as Super Rare or Known Origin, for 20 or 30 euros, the pretenders deposit a digital file in order to obtain the NFT signature, this precious token.
Occasionally, they can also include additional rules to the token, such as a right of resale: for each transaction the token is used, a percentage will be paid to the depositor.
Thus, as a certificate of authenticity, a traceability solution, and a manager of economic rights, the non-fungible token contains so many features of intellectual property rights that are extremely interesting for artists.
However, a major problem tarnishes the process: not all platforms take the trouble to ensure that the depositor of the digital file is the creator !