CRYPTO and NFTs under the Lens of Trademark and Copyright Law

Can you trademark your NFT? What about trademarking cryptocurrency? This article will discuss this in depth.

New forms of digital property, such as cryptocurrencies and non-fungible tokens (NFTs), are not yet fully addressed by existing intellectual property law. Let’s finally take a deep dive into these technologies, shall we?

Bitcoin, Matic, Dogecoin, and Ethereum. We all know them as cryptocurrency. A cryptocurrency, Merriam-Webster dictionary defines, is any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions.

But NFT is a newer technology. An NFT, or non-fungible token, is a digital asset based on blockchain technology used to power cryptocurrency. Investopedia describes NFTs as cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other.

The practical uses of cryptocurrency in the modern world are for transmitting value, i.e., payment, across a decentralized network of users without government intervention. NFTs, however, are used to verify ownership of digital goods.

Simply stated, NFTs represent digital goods while cryptocurrencies are for digital money. It is important to remember that the key characteristic of NFTs is exclusivity.

Authenticity and Brand Protection

Because NFTs offer exclusivity, it has become a means for rights owners to attach authenticity as an integral element to their digital properties. It is for this precise reason that NFTs have become a new and possibly better approach to protect brands from fraud, forgery, and infringement – crimes that hamper the e-commerce industry.

Is NFT an Intellectual Property?

This has become a subject of debate up to this date. Is it copyright or a trademark? To resolve these legal issues, let’s step back a bit.

Intellectual Property

Generally, according to the World Intellectual Property Office (WIPO), intellectual property refers to creations of the mind, such as inventions; literary and artistic works; designs; symbols, names, and images used in commerce.

Trademark

Specifically, the United States Patent and Trademark Office (USPTO) defines a trademark as any word, phrase, symbol, design, or a combination of these things that identifies your goods or services.

Copyright

The United States Copyright Office (USCO) describes copyright as a type of intellectual property that protects original works of authorship as soon as an author fixes the work in a tangible form of expression.

Distinction Between NFTs and IPs

So, from a legal perspective, an NFT is not akin to a trademark or copyright. Although an NFT is, at one point, a creation of the human mind, it is unlike a trademark that serves as a source indicator of goods and services. It is also not copyright that protects authorship of original works. However, we should be on the lookout for legal luminaries who may offer alternative schools of thought on this matter.

While the world is yet to reconcile NFT and IP, let’s talk about what we know so far – both share similarities and are complementary.

An NFT may not be a tool for consumers to identify one business from others, it offers a means for them to validate the authenticity of the goods and services.

An NFT may not protect the rights of the author of original work, it does offer a means for copyright owners to autograph their original creations.

Does this mean NFT can be trademarked?

Yes. If you designated a brand to your NFTs, then you have an NFT Trademark which can be registered at the USPTO.

A trademark registration gives you a bundle of rights, one of which is the exclusive right the use your brand in connection with goods and/or services identified in the registration. Simply put, by registering your NFT brand, you obtain the ability to prohibit others from registering and using marks that may be similar to yours.

The modern world has become more and more competitive and you don’t want to risk your NFT brand by putting it out there without a trademark registration.

At the USPTO, the first NFT trademark to register is SCULPTSY SCULPTURE FOR THE MODERNIST IN YOU (U.S. Registration No. 6590459) registered on December 14, 2021.

One of the latest registered as of the date of the writing is ANYONE GLOWS ((U.S. Registration No. 6731817) registered on May 24, 2022.

Another popular NFT trademark that obtained registration is KOLEX (U.S. Registration No. 6741210) which, according to its website, “has developed the most advanced and feature-complete platform for creating, distributing and trading NFTs at scale.”

Does this mean NFT can be copyrighted?

Not quite. It is the original work that is automatically protected as the copyright, not the NFT because an NFT is just a representation of the underlying work and not the work itself. Copyright owners have to initiate actions, i.e., converting original digital copyrights into NFT. However, when it comes to selling NFTs, having a copyright registration is an advantage.

NFTs free copyright infringement – Copyright registration tells your buyer you did not just transform someone’s original work as NFT. It gives your NFTs legal integrity, thus increasing their value.

Copyright as an independent property – If you sell an NFT, the copyright to the material is not automatically transferred because it is a property on its own. As such, it has to be subject to another agreement which is an avenue to earn more with NFTs.

OpenSea is a marketplace where one can create, sell and buy NFTs.

Any work in the platform is originally created by someone who from the moment of creation is the copyright owner by default. By putting work in the NFT marketplace, the creator can sell it as an NFT. If another person buys it, he will now become the owner of NFT, but not the copyright to the work. An express agreement has to be in place to transfer the copyright to the buyer.

If you have a copyrighted work that is being traded-in any NFT marketplace without your authorization, then you have a cause of action against the service provider. OpenSea has a copyright infringement report system in place.

Why is Copyright Registration Important for NFT?

Under the relevant copyright laws, the creation of an NFT constitutes a copy or a derivative of the original work. As such, only the copyright owner has the exclusive authority to upload or attach NFTs to the original work.

Hence, copyright registration confers copyright owners the right to prevent others from offering copyrighted works as NFTs without authorization.

Register your NFT trademark or copyright with Trademark Angel. If you been geeking out about NFTs and IPs recently and thought of incorporating these to scale up your business? You’ve come to the right place. Email or call us with your questions.