Litigation of NFTs and Intellectual Property

If you’re in the business of making products, you likely know what intellectual property is. It’s been a concept for a long time, and it’s been a driving factor behind litigation regarding patents, trademarks, and various other things since before anyone reading this was born. 

However, it has become more complicated over the last couple of decades.

With the advancement of technology, and the advent of the digital age, intellectual property, and how that IP is protected, are a much bigger concern in the modern era.

As such, while you likely understand the very basic principles of intellectual property and how it works, it’s just as likely that you’re missing some key concepts and an in-depth understanding of how litigation surrounding intellectual property works.

Here’s a comprehensive introduction to intellectual property, some recent technological concepts that have complicated it, and some key points that you should know to protect your property or know what you can and can’t do when making your own products.

What is Intellectual Property?

In the simplest terms, intellectual property is something you have created with your mind. Typically, this is an idea that has been translated into a product.

Some easy-to-understand examples of intellectual property are in your everyday life even if you wouldn’t think to consider them IP.

A painting or drawing that someone has made is something that they specifically made from their own mind, and while there is a physical product available, it is still considered purely intellectual. Other people can paint their own images, but they can’t copy someone else’s and sell it as an original.

Practically every non-food item you buy is also intellectual property. For example, if you bought a new filet knife for your next fishing trip, the specific features of that knife would be someone’s IP. Things such as logos, special features such as unique handle shapes, and more can all be trademarked or patented to protect them as IP.

The music industry is another great example. There are cases all the time regarding artists sampling another artist’s piece, with or without permission, and in many cases, litigation is used to resolve issues that pop up with that. While the product isn’t a tangible thing, it is still protected.

In the modern day, this has gotten more complicated, though. It’s not just regarding things that are patented, and there aren’t always tangible products attached to IPs anymore, but they’re still protected.

NFTs are a great example of this.

What is an NFT?

NFTs are one of the best examples of intellectual property evolving into something far different than what it initially covered. It’s a product of the digital age, and it has led to some unique changes to the litigation process.

Before we get into that, you should probably understand what it is, though. This is still a concept that many individuals have trouble understanding.

An NFT, or non-fungible token, is a new product on the blockchain. It’s similar to the cryptocurrency that has taken the world by storm in recent years.

To many, this is just a simple image that is often similar to the clipart you find in word-processor programs. They’re very simple images that people pay a lot of money for.

However, they’re more complex than that.

NFTs are made in limited numbers, and they’re tracked via the blockchain. This adds to the scarcity that provides value to any normal product. NFTs fluctuate in price based on availability, and since they’re trackable, one can reasonably expect to treat an NFT like an investment.

NFTs can also be a digital representation of a physical, tangible, object. NFTs are frequently used to exchange various high-value pieces of property via the blockchain.

Another new use for NFTs is to represent digital items and facilitate their trade. A big market for this is the gaming industry. A trending usage is to offer gamers an NFT that represents an in-game item they can purchase or earn, and then unlike in the past, they actually own that item. If a sequel comes out, and they want to use that item, features are being developed to allow for the importance of the item in the new game. Players who own high-value items in a game also gain the ability to sell their NFT-attached game items to other players; allowing gamers to earn a bit of income from their hobby.

Intellectual property laws cover NFTs. Even though NFTs rarely attach to a physical asset, they are still the products of someone’s mental ability to create. As such, they are protected by law, and if someone copies, steals, or distributes them without permission from the owner of that intellectual property, they can find themselves in a legal case.

The Ins and Outs of Intellectual Property

On the surface, not infringing on someone’s intellectual property seems as simple as not blatantly copying their ideas or what they’re putting out.

However, it’s not that simple. There are various ways that IPs are protected, and there are some situations when your ability to protect your IP is considered null and void. Like all things in the legal field, there are numerous situations for you to understand.

First, let’s talk about how intellectual property is protected.

1: Copyright

This is typically used to protect the IP that is generated in the creative field. For example, books, songs, videos, and similar forms of media are protected by copyrighting them.

Actually filing to copyright creative material is commonplace, and generators of such content often pay to have the copyright put on file.

However, just because something isn’t officially copyrighted does not mean that you can blatantly copy it and use it as your own. We’ll talk more about that later.

2: Patents

Patents are typically used for new inventions, industrial designs, and similar products. These include in-depth visual and text-based descriptions of the design being patented, the inventor applying for the patent, and if it is accepted as an original design, the patent is processed and put in the books to ensure that the new design is protected as intellectual property. As such, other manufacturers, business professionals, etc… cannot copy the design for their own products without the possibility of a legal response.

3: Trademarks

Trademarks are typically used to protect logos, fonts, slogans, and other pieces of brand imagery. A trademark can be officially filed for, and if you do trademark the material, the visual design (when applicable) and overall logo are protected.

For example, McDonald’s golden arches are trademarked. Another fast-food restaurant, or any company, cannot use giant golden arches to brand their company.

4: Innate IP Laws

Just because a piece of intellectual property isn’t officially protected against one of the previously mentioned legal means does not mean you are free to see an idea, take it as your own, and use it as-is in any capacity.

Intellectual property is protected from the moment of its inception. For example, if an indie author writes a book and self-publishes, they might not file for copyright. However, that does not mean a well-known author can come along, like the book, and copy/paste it into their own manuscript before publishing it themselves.

The indie author would still have legal grounds to take the more well-known author to court.

This is true for most things. However, there are plenty of cases where intellectual property laws will not protect a design or other product from being used.