NFT exploded, many copyright loopholes appeared

Although NFT has a breakthrough growth in 2021 with a total value of transactions reaching 22 billion USD, this digital asset market is starting to show many problems related to copyright.

image 15
NFT boom, many legal loopholes appear

NFT boom in 2021

NFT stands for the phrase Non-fungible token, which can be roughly translated as a non-transferable asset. This type of token (token) is based on blockchain technology and often represents works and products that are easily copied, such as paintings, images, videos, audio files, and digital files. Or in a more understandable way, NFT can be likened to a certificate of ownership and access rights on a digital platform.

After the cryptocurrency craze, investors continued to find potential markets for their coins to proliferate and NFT was a new fertile ground, attracting a lot of investors. Statistics by DappRadar, only in 2021, the total transaction of NFTs reached 22 billion USD, up from 100 million USD in 2020.

However, the explosion of NFT also exposed many legal loopholes of this type.

NFT copyright scandal

At the end of 2021, Brian Moore and Mike Lacher became the focus of the NFT community when they announced “Non-Fungible Olive Gardens” – a work containing images of Olive Garden restaurant in encrypted form with each NFT representing for one of the chain’s 880 US branches. Even these two have formed a group of Olive Garden lovers on the Discord platform.

NFT exploded, many copyright loopholes appeared - photo 2
Non-fungible Olive GardensSCREEN CAPTURE

About 10 days after the work was published, Olive Garden stated that this project is not related to them and on December 30, 2021 sent a request to remove it to OpenSea – the NFT exchange where the Non-Fungible Olive project is. Gardens for sale. Immediately, OpenSea deleted the seller’s account and removed the aforementioned work. However, this move was turned away by the Olive Garden-loving community itself from the restaurant chain.

The Wall Street Journal (WSJ) commented that copyright in the NFT market has become a rather difficult problem, many works are turned into NFT and sold online without the permission of the “owner”.

Sometimes, contradictions appear from the point of view, between the artist and the brand. For artists and users, NFT is a work of art in digital form. Meanwhile, for businesses, this is a version of their intelligence, an item that can promote the development of businesses in the metaverse.

Big brands try to “clean up” NFT works related to them

Currently, the metaverse is a trend, evaluated with a lot of potential. Businesses have gradually realized this, some brands (typically Nike) have initially joined the metaverse and many other large enterprises have gradually planned to engage in this virtual reality trend.

Therefore, many big brands, such as the fashion house Hermès or the film studio Miramax, are working hard to find and remove NFT works related to their brands. In late 2021, Hermès sent a letter asking Mason Rothschild to remove the NFT MetaBirkins bags he created, which had brought Rothschild a previous profit of $1.2 million.

In addition, the Cinemark chain has filed a lawsuit against Roblox because some virtual cities created by players in this game contain Cinemark cinemas. The lawsuit took place in 2016 and was dismissed after two months without making any judgments public.

Legal mechanisms are needed to protect intellectual property rights

The digital age has come, the metaverse, NFT and many types based on blockchain technology (blockchain) will continue to explode in the near future. Disputes between brands Hermès or Olive Garden with NFT artists are said to be the original challenge of this digital age.

Professor Kal Raustiala, who specializes in intellectual property rights at the University of California-Institute Law School in LA (USA), believes that traditional law will benefit artists like Rothschild. However, previous regulations and standards need to be changed as soon as NFT-related disputes arise.