Discover the Latest Government Study on NFTs and Why Current Copyright Laws are Enough
Intellectual Property Laws Adequate to Address NFT Concerns, US Government Study Finds
Non-fungible tokens (NFTs) have been gaining popularity as a form of digital asset, sparking questions about the adequacy of current intellectual property laws. A comprehensive study conducted by the United States Patent and Trademark Office (USPTO) and the U.S. Copyright Office has concluded that there is no need for new legislation at this time.
Current IP Laws Sufficient Despite Trademark Infringement Concerns, Study Says
In June 2022, Democratic Senators Patrick Joseph Leahy and Thom Tillis requested a study to address concerns about copyright and trademark infringement associated with NFTs. The 112-page study found that while trademark misappropriation and infringement are common on NFT platforms, the current legal framework is adequate to handle these issues.
The USPTO and Copyright Office conducted three public roundtables and consulted with stakeholders before reaching this conclusion. Most stakeholders agreed that current laws are sufficient.
“The Offices agree with these assessments and do not believe that changes to intellectual property laws, or to the Offices’ registration and recordation practices, are necessary or advisable at this time,” the study reported.
Stakeholders Express Concerns About NFT-Specific Legislation
While some stakeholders expressed concerns about the potential need for NFT-specific legislation, the study found that such legislation could hinder the evolving development of NFT technology.
The study also noted that a technology industry association warned of the risk of bad actors exploiting consumers’ personal information through counterfeit NFTs, but concluded that this risk should not prompt changes to intellectual property laws.
Ambiguity around NFT Regulation, but Some Cases Bring Clarity
The study acknowledged the lack of judicial precedent regarding the enforcement of trademark registrations for physical goods against similar digital goods tied to NFTs, but noted that there have been some recent high-profile cases involving NFTs.
In August 2023, Impact Theory, a California-based media company, faced charges brought by the U.S. Securities and Exchange Commission (SEC) for selling NFTs that were deemed securities because the company promised investors would profit off the collectibles. Impact Theory ultimately agreed to set up a fund to reimburse investors and pay a $6.1 million fine. While this case did not establish that all NFTs are securities, it provided some clarity on how regulators may approach NFTs in the future.
It should also be noted that even former U.S. President Donald Trump has released and sold out NFT collections.
In Conclusion
The study ultimately concluded that current intellectual property laws are adequate to address concerns about NFTs. While some stakeholders may have expressed concerns about the need for NFT-specific legislation, the study found that such legislation could impede the development of NFT technology. With recent cases like Impact Theory providing some clarity, it is evident that NFTs will continue to be regulated under existing intellectual property laws.
