Copyright Laws & Trademark Infringement for NFTs

traverselegal - October 21, 2022 - Non-Fungible Tokens (NFTs)


Thinking about buying or creating an NFT? Whether you are looking to make your non-fungible token to sell or you’re looking to buy an NFT as an investment, you need to be aware of copyright and trademark laws that might apply to your NFT. Trademark infringement litigation is expensive and time-consuming. Many times, individuals are not aware they are infringing on a trademark. Trademark rights can be even more confusing to navigate in the world of NFTs. 

Are NFTs (Non-Fungible Tokens) Considered Intellectual Property?

As NFTs become more intertwined into our creative and financial worlds, it is important to understand what an NFT is, how it is classified, and the different ways creators of NFTs can protect their interests. In short, the name of a non-fungible token project and the name of the linked digital file can be considered intellectual property, and the original owner of the NFT has the exclusive right to transfer IP rights to the new owner if they choose to do so. 

What is Intellectual Property?

Intellectual property or IP is a creative work or invention that holds rights. Manuscripts, designs, and art can all be classified as intellectual property. Some may not realize that video games are also considered intellectual property. The characters, world, and stories that facilitate a unique gaming experience together form an IP that belongs to the respective game studio. There are four main types of intellectual property rights; patents, trademarks, copyrights, and trade secrets.

What is a Non-Fungible Token?

An NFT, or “non-fungible token” is a token added to a blockchain that links ownership to unique digital items (images, video files, audio files, artworks, etc.). These could be images or unique assets and items used in online games or virtual worlds. Non-fungible tokens have been designed to give a person ownership of something like modern-day digital collectibles. An NFT shows proof of ownership for a digital object.

Can NFTs Reflect Ownership License Rights or Other IP?

Yes, nonfungible tokens can be an indicator of intellectual property rights. The NFT project owner needs to secure the IP rights from the copyright owner before linking and minting the NFT.  If you create an NFT that uses third-party IP without the permission of the IP owner, you are infringing on someone else’s intellectual property rights and are at risk for litigation. If the NFT project then sells the NFT linked to a digital work to an NFT buyer, that NFT buyer would also be infringing.  Ownership and licensing (copyrights & trademarks) are vital when dealing with NFTs. 

Copyrighting  vs. Trademarking NFTs

You want to protect your ideas and hard work as an artist and creator. Just as music artists protect how their music is sold and listened to, nonfungible token creators have a right to protect how their work is sold and used. Can you and should you copyright and/or trademark your unique asset before adding it to the blockchain as an NFT?

How are Copyrights Used?

Copyrights are a form of intellectual property law that protects original authorship works, including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture. Your work is protected by copyright law from the moment it is  “created and fixed in a tangible form that it is perceptible either directly or with the aid of a machine or device.” Registering for copyright protection is voluntary but necessary if you wish to file copyright infringement litigation. 

How are Trademarks Used?

Trademarks are another form of intellectual property that protects “words, phrases, symbols, or designs identifying the source of the goods or services of one party and distinguishing them from those of others”. Essentially, trademarks protect the brand names and logos of goods and services. You are not required by law to register your trademark. However, it is highly recommended that you do. This will also help with any future litigation and trademark protection. 

Should You Copyright Your Unique Assets Linked to an NFT and & Trademark Your Project Name?

Some benefits of copyright and trademark registration for NFT projects include the following:

  1. National protection, in addition to local protection
  2. Ability to register with customs providing protection from foreign companies
  3. Proof of validity
  4. It acts as a deterrent 
  5. Provides clarity (often individuals are unaware they are infringing on copyrights or trademarks)

There are benefits to registering your copyright and trademark to protect your NFT project, and we recommend you do so with the help of an expert Traverse NFT lawyer.

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This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney Enrico Schaefer, who has more than 20 years of legal experience as a practicing Business, IP, and Technology Law litigation attorney.