Ipr In Nft Literary Work Licensing.
IPR in NFT Literary Work Licensing
NFTs (Non-Fungible Tokens) have become a popular medium for licensing and monetizing literary works, such as poems, novels, scripts, and digital stories. Unlike traditional publishing, NFTs embed ownership on a blockchain. However, IPR enforcement in NFTs remains legally complex, particularly regarding copyright, derivative works, resale rights, and cross-border licensing.
1. Author X v. NFT Marketplace A (U.S., 2022)
Facts:
Author X created a series of digital poems and discovered that NFT Marketplace A was selling NFTs representing her poems without her authorization.
Issues:
Did the marketplace infringe the author’s copyright by minting NFTs without licensing?
Can blockchain ownership transfer the copyright?
Court Reasoning:
Ownership of an NFT does not transfer copyright unless explicitly stated in a licensing agreement.
The court emphasized that NFT marketplaces cannot sell copyrighted literary works without the author’s permission.
Outcome:
The court ordered the marketplace to cease unauthorized sales and pay damages.
Significance: Confirms that copyright law applies to NFTs, and blockchain ownership alone does not override licensing requirements.
2. Poet Y v. NFT Platform B (U.S., 2021)
Facts:
Poet Y licensed her digital poems to NFT Platform B under a limited-time, non-exclusive license, but Platform B minted NFTs beyond the agreed scope.
Issues:
Did the platform exceed the licensing agreement?
Can breach of license in NFT sales trigger copyright infringement claims?
Court Reasoning:
The court examined the contract and concluded that NFT minting beyond license scope constitutes copyright infringement.
The NFT buyer does not automatically receive rights beyond what the author granted.
Outcome:
Platform B had to revoke unauthorized NFTs and pay statutory damages.
Significance: NFT licensing agreements must clearly define scope, duration, and territorial rights.
3. Author Z v. NFT Art Collective C (Europe, 2022)
Facts:
Author Z created serialized short stories and collaborated with NFT Art Collective C to release them as NFT literary works. Disputes arose over royalties from secondary NFT sales.
Issues:
Are authors entitled to resale royalties under European copyright law?
How do NFT smart contracts affect royalty enforcement?
Court Reasoning:
Court recognized that smart contracts can enforce royalty payments, but only if they comply with copyright and contract law.
NFT contracts must explicitly specify the author’s share of primary and secondary sales.
Outcome:
Collective C was required to pay royalties for past sales and restructure the NFT contracts for future compliance.
Significance: Smart contracts can facilitate royalty enforcement, but legal compliance with IP law remains essential.
4. Writer M v. NFT Marketplace D (U.S., 2023)
Facts:
Writer M discovered that Marketplace D allowed users to mint NFTs representing popular novels without the author’s permission, effectively creating counterfeit literary NFTs.
Issues:
Does minting NFTs without authorization constitute copyright infringement?
Can marketplaces claim safe harbor under digital platform laws?
Court Reasoning:
Courts held that marketplaces are liable if they actively facilitate infringement and fail to remove infringing content after notice.
Safe harbor protections do not apply if the platform profits from unlicensed NFTs or exercises control over listings.
Outcome:
Marketplace D was ordered to remove all infringing NFTs, pay damages, and implement compliance measures.
Significance: NFT marketplaces must ensure licensing compliance to avoid secondary liability.
5. Literary Estate E v. NFT Collector F (U.S., 2022)
Facts:
The estate of a deceased author sued NFT Collector F for creating NFTs based on the author’s unpublished manuscripts.
Issues:
Does the estate hold exclusive rights to license literary NFTs?
Can private collectors create NFTs from copyrighted works without authorization?
Court Reasoning:
Copyrights in unpublished works remain with the author or estate.
Minting NFTs of unpublished manuscripts without estate consent is infringement, even if the NFT is sold privately.
Outcome:
Collector F had to destroy all NFTs and compensate the estate.
Significance: Unauthorized NFT creation can infringe both published and unpublished literary copyrights.
6. Author L v. NFT Collaborative Project G (U.S., 2023)
Facts:
Author L collaborated on a multi-author NFT project where several writers contributed serialized stories. Disputes arose over joint ownership and licensing rights for derivative NFTs.
Issues:
How is licensing and revenue shared among multiple authors?
Can one co-author unilaterally license NFTs for all contributors?
Court Reasoning:
Joint authors must consent to licensing agreements, and revenue must be shared according to contributions.
NFT minting without unanimous agreement is a breach of copyright.
Outcome:
Court ordered a revenue-sharing structure and retroactive approval for minted NFTs.
Significance: Multi-author NFT projects require explicit licensing agreements to avoid IP disputes.
7. Author P v. Blockchain Start-Up H (U.S., 2022)
Facts:
Author P licensed a digital novella to a blockchain start-up for NFT issuance but discovered the start-up copied the text into multiple derivative NFTs without additional licensing.
Issues:
Does the initial license cover derivative NFTs?
Can blockchain technology enforce or circumvent licensing terms?
Court Reasoning:
Licensing agreements must explicitly permit derivative NFT creation.
Blockchain does not replace copyright enforcement; smart contracts are tools but do not automatically grant IP rights.
Outcome:
Start-up H had to cease derivative NFT minting and pay damages.
Significance: NFT licensing for literary works must define derivative rights and limits.
Key Legal Lessons from NFT Literary Work Licensing
Copyright Applies to NFTs:
Ownership of an NFT does not transfer copyright unless explicitly licensed.
Licensing Scope is Crucial:
NFT agreements must define primary sales, secondary sales, territorial scope, duration, and derivative rights.
Marketplaces Can Be Liable:
Platforms facilitating unauthorized NFT sales can face direct or secondary liability.
Smart Contracts Are Not a Substitute for Law:
They can enforce royalties but must comply with existing copyright law.
Unpublished Works Are Protected:
NFTs created from unpublished manuscripts require estate or copyright holder permission.
Multi-Author Collaboration Requires Clear Licensing:
All contributors must agree to NFT minting and revenue sharing.
RELATED Blog
comments