Non-fungible tokens (NFTs) serve as agile mechanisms to verify the authenticity of underlying assets and/or ownership related to them.
As of now, issuing NFTs to commercialize digital artwork on blockchain domain names remains one of the most popular schemes to use NFTs.
Background
The ongoing dispute between French luxury brand Hermès International and artist Mason Rothschild continues, with a trial set to begin on January 30, 2023. Plaintiff Hermès alleged that MetaBirkin NFTs infringed its rights.
Birkin trademark. Rothschild said that NFTs are works of art and therefore
Rogers vs Grimaldi, 875 F.2d 994 (2d Cir. 1989) held that use of the name or mark for artistic purposes does not necessarily constitute infringement. in particular,
Rogers The test is “infringing unless the title has no artistic relevance to the underlying work, or even if it does, the title is expressly misleading as to source or content.” The claim does not apply to titles of creative works.” the work. ” Ditto. at 999. In 2022, before setting a trial date, the United States District Court for the Southern District of New York denied Rothschild’s motion to dismiss the case, but Rogers The test has been applied and you are ready for your next trial.
The United States District Court for the Central District of California recently ruled in another case (Yuga Labs, Inc. v. RippsNo. CV 22-4355-JFW(JEMX), 2022 WL 18024480, at *1 (CD Cal. Dec. 16, 2022)) Rogers The test does not apply to NFTs in digital artwork.
Plaintiff Yuga Labs Inc. (Yuga), the creator and marketer of the NFTS (Yuga Bored Ape images) of the famous “Bored Ape Yacht Club” collection, has filed a complaint against conceptual artist Ryder Ripps (Ripps). Gano
boring ape yacht club Trademarks and other marks, including logos and acronyms (BAYC Marks) associated with Ripps’ own Ryder Ripps Bored Ape Yacht Club (RR/BAYC) NFT collection. Ripps claims the Yuga Bored Ape image was created as part of an alt-right conspiracy. Yuga denies this.
in contrast to Hermes vs Rothschildthe California District Court, Rogers Due to the fact that RR/BAYC’s image is an exact copy of Yuga’s boring monkey image, and thus does not constitute an expressive work of art, no test exemption was applied. The court said that the content of Ripps’ website “is all commercial activity intended to sell infringing products and is not expressive artistic expression protected by the First Amendment.” 2022 WL 18024480, at *5. On December 27, 2022, Ripps filed a series of counterclaims (the Ripps Counterclaims). It contains two surprising legal issues related to the copyright of plaintiffs’ digital artwork.
Artificial intelligence and digital artwork
Ripps argues that there is a dispute as to whether Yuga Bored Ape’s images qualify for copyright protection because they are generated by an automated computer algorithm. Ripps claims no humans were involved in determining which of the 10,000 Yuga Bored Ape images he chose from over 1.3 billion possible permutations. Case No. 2:22-cv-04355-JFW-JEM, Dkt. No. 65, ¶ 79 (CD Cal. 27 December 2022).
As explained in a recent blog post by Holland & Knight, “Image-Generating AI: Trends and Legal Challengesthe U.S. Copyright Office considers works created in part, but not wholly, by artificial intelligence (AI) to be copyrighted. Thaler v. Vidal, 43 F.4th 1207, 1209 (Fed. Cir. 2022)The protective coverage of Yuga Bored Ape’s images will therefore set an important precedent in virtual environments for how courts may interpret the nature of images that are partially or wholly created by AI.
Copyright owners and NFT holders
Ripps’ counterclaim also addresses the issue of whether plaintiff Yuga retains copyright in the Yuga Bored Ape image that it sold and no longer owns.
According to defendant Ripps, Yuga’s terms of service and its public statements support the idea that purchasers of Yuga Bored Ape’s images retain all intellectual property (IP) rights to NFT.
These aforementioned legal issues may set an important precedent regarding the rights that copyright claimants have with respect to NFTs.
Plaintiff Yuga Labs’ original complaint, on the other hand, contained no copyright claims. However, 1) Yuga Labs has filed a Digital Millennium Copyright Act (DMCA) takedown notice against Ripps for copyright infringement and 2) Yuga Labs owns several US copyright registrations for Yuga Bored Ape’s images. doing.
Issues with brands and images used in NFTs are still unresolved
Courts that deal with disputes Hermes vs Rothschild, Yuga Labs v. Ripps A similar case helps setting some parameters and guideposts, but other issues are still open. These include the use of disclaimer applicability to distinguish one set of images from other NFT collections, the first sale doctrine, and the fair use doctrine.
Takeaway
Among other factors, such as blockchain ledger and platform interoperability, more clarity on IP legal issues related to NFTs will encourage businesses and industries to become more open about using NFTs and conducting commerce in virtual environments. will have the direction of
The content of this article is intended to provide a general guide on the subject. You should seek professional advice for your particular situation.
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