Non-fungible tokens or NFTs are all the rage these days. Renowned pillars of the Internet we know today, including the creators of Twitter and the iconic Nyan Cat, are sealing their mark in history by putting commemorative items up for sale in the NFT realm. On the other, digital artists are seemingly becoming more receptive to this medium to get paid for their craft. Likewise, brands like Dole’s banana collection with artist David Datuna are leveraging NFT-form art to raise funds for promoting a cause.
To an onlooker who has only a slight idea of how gallery auctions work, NFTs may sound like a quirk that only obscures the trade. Similarly, they may wonder if it is any different from trading limited edition or autographed collectibles like baseball cards or action figures.
Maybe just as confused are those who are trying to keep up with matters relating to intellectual property being creators themselves, with this word that’s been exchanged frequently but yet to be fully understood, here’s a rundown of NFT facts and how it changes how intellectual property rights are claimed:
What Are Non-Fungible Tokens?
Let’s first discuss what non-fungible tokens are not, in other words, fungible assets. An asset is said to be fungible if one unit of it could be readily exchanged with another unit because they hold the same value. A perfect example is good old currency, wherein one penny is worth the same as another penny, or bitcoin.
On the other hand, non-fungible tokens are assets like photos, art, videos, and music rendered in digital format. Its valuation is contained in the so-called Ethereum, a blockchain that has its own cryptocurrency. Every NFT is unique and may never be interchanged with each other, much like how a custom-made one-of-a-kind sports card cannot be exchanged for one that was mass-produced.
So, if one may ask if purchasing NFTs is just like buying art off of an auction, the answer is yes, at least by principle. Depending on demand, the price of an NFT in the form of digital art can soar just as framed gallery art does.
Why Is There a Sudden Popularity?
No matter how it got many scratching their heads, NFTs have skyrocketed in popularity in recent years. Market skeptics would agree that it did in the same fashion as when trading limited-edition miscellaneous items like movie and sports merchandise became a hit back then. The more it is sought out, the higher its value becomes.
Especially during the pandemic when digital means continue to ease selling and buying transactions, the NFT craze is yet to die down. This is a particular case for the sports industry, so much that a record sale is broken in a matter of weeks. As of writing, the robust trade amounts to over a million dollars. Overall, the NFT playing field entices not only hobbyists and collectors but also adventure-seeking investors.
Considerations for Claiming IP Rights
Questions arise, especially for NFTs whose images are all over the Internet, and whether their ubiquity ever diminishes its blockchain value. The quick answer to that is no. This brings us back to the non-fungible nature of these digital assets. A copy can never cost as much as the original.
This value exclusivity gives all the more reason for creators to monetize their craft through NFTs. Many people may maintain a level of reluctance, thinking it will take a more complex process to protect their intellectual property rights. Often, this can be resolved with the help of a trademark lawyer.
A license is essentially granted to the owner for brand trademarks, published books, artworks, movies, or an action character. In the same manner, a creator can lobby to get their work licensed by blockchain developers. This step is relatively easy.
What complicates it is when an IP owner has previously granted third-party licenses. Later on, licensees can assert rights over aspects such as design and copyright. It is, therefore, crucial for a creator to identify ahead what works he’s willing to grand third-party licenses to and those that are exclusively meant to be licensed as NFTs. Just as crucial is registering one’s IP with the copyright and trademark offices. That way, filing complaints and taking legal action against infringement will be easier in the case.
We live in such an exciting era wherein ideas are exchanged more seamlessly. In a way, NFTs have democratized channels through which ingenious and thought-provoking ideas are appreciated for their value. It’s only fitting that creators maximize this platform.