Copyright and intellectual property concerns have become crucial as non-fungible tokens (NFTs) transform the digital art industry. NFTs give collectors new opportunities to own digital property and give artists new sources of income, but the legal difficulties surrounding ownership rights are forcing a careful analysis of how these digital assets relate to current copyright regulations.
NFT Boom Spurs Legal Complexities
According to DappRadar, the NFT industry grew rapidly to a worth of $24.9 billion in 2021, drawing a wide range of corporate players, artists, and collectors. Many people, including musicians and visual artists, have adopted NFTs as a new revenue stream. Creators may tokenize digital assets and sell them on decentralized platforms thanks to NFTs, which are based on blockchain technology.
Unlike cryptocurrencies, NFTs are unique and non-interchangeable, making them ideal for representing ownership of one-of-a-kind digital works. But this uniqueness introduces a core legal dilemma: does owning an NFT equate to owning the copyright to the digital asset it represents?
The Fine Line Between Ownership and Rights
Ownership of an NFT does not automatically grant copyright. Courts have weighed in on this issue, underscoring the legal grey area. In Rosenfeld v. Bittrex, a U.S. court considered whether purchasing an NFT included rights to the underlying artwork. Similarly, in Miroslav Dimitrov v. Frank Ape LLC, it was reaffirmed that unless explicitly transferred, copyright remains with the original creator, even after an NFT sale.
Such misunderstandings often mislead buyers, many of whom wrongly assume that buying an NFT equates to full rights over its content—a notion that may lead to disputes if not properly addressed in licensing agreements.
Infringement and Unauthorized Sales on the Rise
The ease of minting and selling NFTs has also sparked a wave of copyright violations. As an example of how creators might lose control—and money—when their work is exploited on blockchain platforms, well-known digital artist Krista Kim discovered that her work had been tokenized and sold without her permission.
One of the most well-known examples is perhaps Miramax v. Tarantino, in which the movie studio sued Quentin Tarantino for trying to sell NFTs relating to Pulp Fiction. Crucial problems are brought up by the case: who has the authority to market famous works of art, and how should those rights be distributed in the digital era?
Trademark Disputes Enter the Arena
Brands, too, are grappling with the rise of NFTs. In Hermès International v. Rothschild, the luxury fashion house sued artist Mason Rothschild for creating “MetaBirkins” NFTs—digital versions of its iconic Birkin bag. While the court acknowledged the work as art, it also sided with Hermès, citing likely consumer confusion and trademark infringement.
This landmark case is shaping how courts balance freedom of artistic expression against the enforcement of intellectual property rights in digital spaces.
To navigate this new terrain, creators are urged to:
Use licensing agreements: Clearly state what rights are included with NFT purchases. Templates from platforms like OpenSea exist but are often non-binding.
Leverage smart contracts: Automate royalty payments and enforce licensing terms.
Register copyrights: Official registration adds a legal layer of protection and helps resolve disputes efficiently.
For Brands
- Companies must adapt their intellectual property strategies by:
- Monitoring NFT marketplaces for potential infringements.
- Educating internal teams on how NFTs intersect with existing IP laws.
- Trademarking digital assets: Proactive registration can help defend against unauthorized uses.
- Enforcing rights through cease-and-desist notices or litigation, as Nike has aggressively done in the metaverse space.
Conclusion: The Road Ahead
NFTs sit at the crossroads of innovation and regulation. As cases like Hermès v. Rothschild and Miramax v. Tarantino demonstrate, courts are still defining the boundaries of ownership, copyright, and creative freedom in the digital economy.
For creators, collectors, and corporations alike, the stakes are high. Clear legal frameworks and ongoing collaboration between artists, legal experts, and tech developers will be essential to ensuring that the NFT ecosystem evolves with integrity and fairness.
Staying informed, proactive, and legally diligent will be key to thriving at the intersection of art, blockchain, and intellectual property in the years to come.
