IP infringement rife in NFTs, but new laws not needed: US gov report

Changing United States intellectual property (IP) laws aren’t needed right now, even though piracy and IP infringement are common on nonfungible token (NFT) marketplaces, claims a U.S. government report.

On March 12, the U.S. Copyright Office and Patent and Trademark Office (USPTO) concluded a joint study focusing on IP law and policy implications regarding NFTs.

It noted that NFT technology cannot prevent unauthorized copying and claimed that “trademark infringement and misuse is prevalent on NFT marketplaces.”

“In addition, trademark enforcement efforts are complicated by the decentralized and anonymous nature of NFT platforms, and the decentralized nature of the blockchain networks on which NFTs are stored.”

Despite the findings, the agencies didn’t believe changes to IP laws “are necessary or advisable at this time.”

“To the extent an NFT contains or links to an unauthorized copy of a copyrighted work, the creation or marketing of that NFT will implicate copyright law the same way as any unauthorized reproduction or display,” the report said.

It noted there are existing enforcement tools available to address NFT-linked infringements just as they are for other online infringements.

Source: USPTO on X

Under Secretary of Commerce for Intellectual Property and USPTO Director Kathi Vidal stated that NFTs “offer unique opportunities for creators to leverage their IP rights, but also present new challenges in keeping their work secure.”

Consumer confusion about IP rights and the legal status of smart contracts was also raised. However, it was concluded that these concerns would be better addressed with education and consumer protection rather than IP law changes.

Related: What are some ways to avoid IP infringements in the NFT space?

There were no specific proposals for using NFTs or blockchain technology in U.S. patent and trademark registrations, but their potential will continue to be explored, the report stated.

The study and report was prepared after a 2022 request from an IP subcommittee of the…

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