The U.S. Patent and Trademark Office (USPTO), together with the Copyright Office (USCO), will study the non-fungible token (NFT) sector as part of intellectual property rights enforcement. The need arose as lawsuits against various NFT projects began to pile up.
The request to study NFT projects in the intellectual property context was filed last month by Senators Patrick Leahy and Thom Tillis. The policymakers urged U.S. agencies to examine the industry and evaluate a “burgeoning asset class” regarding its potential impact on intellectual property rights.
The USPTO and USCO have tentatively agreed on a study plan to examine the industry. The agencies’ main task will be to consult with various stakeholders on several issues relating to:
- potential intellectual property rights infringements that NFTs may cause;
- regulations related to transferring ownership of NFTs;
- licensing of NFT ownership rights;
- the legal framework for regulating ownership of NFTs;
- potential IP rights for NFT creators.
Both agencies do not limit the timing of the study. Recall that in 2022, the number of NFT-related trademark applications filed increased by 220% compared to last year.
The need to study the NFT space emerged because of the increasing number of lawsuits on various NFT projects by well-known brands and celebrities. For example, the most high-profile lawsuits were:
- Nike, the sportswear brand, sued StockX, a seller of unlicensed NFT sneakers;
- movie company Miramax sued famous director Quentin Tarantino over plans to release Pulp Fiction NFTs;
- American rapper Lil Yachty is taking legal action against a music company for using his image and name to raise venture capital to finance its NFT collection.
While NFT digital collectibles have seen a dramatic drop in interest amid the general decline of the crypto market, and NFT monthly trading volume has fallen by about 94% since early 2022, analysts predict that the NFT sector could reach $13 billion by 2027.
