NFTs (or non-fungible tokens) continue to raise new legal issues, including the enforcement of intellectual property rights and those rights specifically against malicious persons.
Take Seth Green, an actor and comedian, as an example. Green was the owner of an NFT titled Bored Ape Yacht Club # 8398, which depicts a Bored Ape avatar named Fred Simian. The Bored Ape Yacht Club is an NFT collection of 10,000 ape avatars, each with its own unique visual characteristics, each worth thousands of dollars (and possibly millions of dollars). Bored Ape Yacht Club To take advantage of NFT’s excellence and create a new kind of series in the fame that surrounds NFT, Green has developed an animated show called White Horse Tavern with Fred as the main character. Then, in May 2022, the Green NFT was hacked, raising a number of legal issues regarding its ability to generate revenue from NFTs that it could no longer own or control.
Green’s NFT hack raises interesting and novel copyright issues. Generally, under copyright law, the copyright of a work is not transferred from the creator of the work to the purchaser without a contract or transfer of rights. In First Sale Doctrine, when the creator of a copyrighted work sells the work, only the right to “sell or otherwise dispose” of the work is transferred along with the physical ownership of the work. This means that the owner of the tangible work himself can resell, lease, rent, assign, or destroy the material item (which may apply under state law in the United States or the Visual Artists Rights Act of 1990). According to the moral rights of the author of a sexual artist). However, the creator of the work creates a derivative of the work by copying, adapting, publishing, publicly executing and displaying the exclusive rights granted to the copyright owner under copyright law. Retain ownership of the right.
For example, in the traditional copyright principle, the purchaser of the poster print of the artist Jean-Michel Basquiat’s “Untitled” (1982) should purchase the copyright from the original work Jean-Michel Basquiat’s property at the same time. there is no. That is, the buyer can resell or transfer the poster, but cannot make and sell a copy of the poster or create a new derivative of a painting (for example, “Untitled” (“Untitled”). 1982) featured product).
NFT license for rights and enforcement
Currently, in the area of unknown digital products, NFT creators are changing the rules through a new licensing model.
But the plans for Green’s White Horse Tavern are: 4 NFTs stolen From his collection on May 8, 2022, including the boring Ape Yacht Club # 8398, through a phishing attack. Green that he connected his crypto wallet to what turned out to be another NFT collection fake website. This validation allowed phishing hackers to use Green’s approved credentials to transfer four NFTs from Green’s collection to other users.
In addition, NFT hacking scams have been reported to increase, and phishing scams are targeting valuable NFT collectors.
Without ownership of Bored Ape Yacht Club # 8398, Green theoretically retains the interests of use, copy, display rights, and creative derivative works rights granted through the Bored Ape license. plug. In effect, Green has lost the underlying intellectual property rights to commercialize the new series of Character Fred.
After the incident, the green Turned to social media, And begged the new owner of Bored Ape Yacht Club # 8398 to return the job. Since Bored Ape Yacht Club # 8398 was illegally transferred from Green’s wallet Green Claim Contacting the new owners, they are “cooperating to prosecute the original thief.”
The NFT Marketplace Green, which was currently used to purchase Bored Ape Yacht Club # 8398, has the online marketplace “capacity to buy” when the site receives a “notice of potentially stolen items” through a request form. There is a stolen item policy that says “disable”. Sell or transfer stolen items. ” The online marketplace marks NFTs that may have been stolen as “infringed”. The question is how and if the marketplace will be involved in regaining ownership of the user if the NFT is transferred to a third party collection without permission. In the case of Green, he reportedly paid nearly $ 300,000 to retrieve Bored Ape Yacht Club # 8398 from a user who purchased an NFT from a hacker. Green seems to have resumed development of the White Horse Tavern series.
In Light Green’s plight, the key question is how future proceedings regarding the legal enforcement of NFT ownership may develop. New York State Senator Kevin Thomas has proposed a bill to regulate cryptocurrency theft and fraud, and the Justice Department has a task force focused on cryptocurrency cybercrime. However, neither initiative seems to address how cybercrime affecting cryptocurrencies and NFTs affects owners’ intellectual property rights. It is also unclear how the creators of NFTs will respect the granting of intellectual property licenses to use, copy, view, and create derivatives even if the NFT’s assets are stolen.
NFT owners should be aware of fake links and frequent hacking and scams through websites that look like legitimate NFT marketplaces. There is uncertainty about how traditional intellectual property rights apply in the context of NFTs, and now there is even more uncertainty about the enforcement mechanism of those rights.