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Can Intellectual Property Rights Protect Web3 and NFT Evolution?

Digital IP rights are crucial. Especially in 2022 as web3 and NFTs evolve and illicit activities increase.

Modern economies rely on IP. Intellectual property originated in the 14th century. Securing an idea of belonging/right, such as physical property rights and property registries over land and other material goods.

Idea non-rivalry makes it exciting and challenging. Capital goods—things one can own based on ideas and incentives to finance and licence them—have relied on intellectual property.

Industrial business models are incorporating this. Large portions of the world’s largest companies’ balance sheets are intellectual property.

The internet allowed free data copying. Given the ease of stealing or hacking, intellectual property issues arise. Data-driven business models are emerging.

This has led to “web3,” a decentralised web created by open-source programming and code. Web3’s economic infrastructure and property are mostly open source. The old industrial intellectual property system isn’t used. As the web3 and NFT sectors grow, IP rights remain a concern.

Blockchain is a ledger. Humans have used multiple ledgers to determine ownership. NFTs register and track digital goods ownership.

In 2023, the NFT market grows despite setbacks. NFT sales could exceed $230 billion by 2030. The rapid rise brings many challenges. Creators who mint an NFT for a virtual asset with artwork, a song, or trademarks they no longer own or have a licence for can face serious legal consequences.

The Hermes Rothschild lawsuit over NFT trademark infringement made headlines. The French luxury brand claims that virtual artist Metabirkins infringed its federally registered Birkin emblems. Mason Rothschild countered that Metabirkins were not commercialised.

The NFT community awaits the verdict, which may set a standard for intellectual property use in NFTs.

If taking a screenshot of an NFT is legal, why do people buy it instead of copying it? NFTs can be screenshotted like portraits. Each NFT is unique and authentic due to its smart contract connection. Blockchain technology verifies NFT ownership easily.

Many ownership disputes have arisen. Galaxy Digital reported that Bored Ape Yacht Club and Moonbirds buyers do not legally own IP rights.

Many brands have debated whether web3 is ready for prime time in the past year. Given the unclear regulation, some popular brands have gone all out, while others have been more cautious.

However, protecting intellectual property rights for projects, ideas, slogans, etc. Many web3-using companies have similar interests. In early 2022, BeInCrypto reported that the entertainment industry was near the top.

This industry’s IP future? BeInCrypto asked MixMarvel Chief Strategy Officer Mary Ma for clarification. Mary Ma suggested ‘collective ownership would be a feasible solution for the current IP dilemma.’

IP regulation has two main categories. CC0 is one. Artists can put their work in the public domain so anyone can reproduce and profit from it. The other gives NFT owners commercial or limited commercial rights.

Copyright regulation and centralised enforcement automatically protect works of art. In 2009, Creative Commons published the standard licencing CC0. Creators can claim public domain status.

Everyone can use CC0-categorized works for commercial purposes after creators relinquish ownership.

Ma added: “NFT creators are increasingly choosing this “no rights reserved” CC0 licence for their projects in recent days. Contrary to popular belief, “no rights reserved” does not mean that the original work will become worthless due to unrestricted duplication or that the creators will no longer be able to profit from it. Quite the opposite.”

Robbie Broome tweeted on July 27: The CC0 license’s removal of limits on copying, spreading, and secondary creation, the self-propagation effect, will allow project owners to enjoy attention without much effort to promote their work.

To avoid confusion, projects in the space should use appropriate IP licences. Especially now that regulators are eyeing stricter laws to squeeze the sector.


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