NFTs have been a hot topic for over a decade now. Worlds in the Metaverse aren't really a new thing. I know most of you can remember 'Second Life of Virtual Helsinki' in 1996. And of course, here in Finland, we're proud of Habbo Hotel, which launched in 2000.
But given the ability of NFTs to foster innovation and concurrently produce revenue for the purchasers and creators, they have acquired multiple use cases. And now that creative artwork is entering the NFT market; there's an issue of intellectual property rights that we can't just ignore.
Why bring this up? As much as NFTs present opportunities for businesses, it comes with a fair share of risks. NFTs make it easier for you to monetize the intellectual property rights of your business. Unfortunately, the risk here is that someone can easily misuse the IP rights of your business.
With that said, this article will explore NFTs and their relationship with intellectual property rights. While at it, we'll use a couple of examples to discuss some issues that have come to light about IPRs.
In March 2021, Mars House was sold at roughly $512,000 as an NFT by an artist- Krista Kim. Mars House was documented as the first crypto-digital home to sell. According to the artist, the digital home stemmed directly from her explorations of how to incorporate mediative designs into the digitized life during quarantine.
This seemed like a pretty good deal for a digital home. When you buy this house, you essentially get a digital file. From my point of view, this property has no actual connection to the Metaverse. But let's not focus on that here. I want us to pay attention to the massive intellectual property rights fight that followed.
Krista Kim had enlisted Mateo Sanz, a 3D modeler responsible for creating the visualizations of the Mars House. Mateo came forward claiming that the entire Mars House project was a fraud and Kim never full had rights to own the project. The 3D modeler contended that he was the one who created the Mars House project from scratch with direction from Kim. Therefore, he's the one who possesses the intellectual property rights.
On the other hand, Krista Kim disputed the claims saying that she retains the full ownership and copyright of Mars House. Further, she noted that Mateo Sanz had been fully compensated for his contributions to the Mars House. The situation between Krista Kim and Mateo won't be the last instance where legal questions are raised about NFTs.
Image credit: Superworldapp.com
Superworld basically sells the world as NFTs. Buyers have access to 64.9 billion plots which they can buy as NFTs. You choose if you want to own Eiffel-tower or Big Ben in this world. All is great, right? Even if it is a virtual world, somebody still owns the IPRs of usage of many of these places.
The NFT world remains largely unregulated; therefore, there's such a massive gray area in the enforcement of intellectual property rights. On top of that, many virtual world issues relating to the misuse of licenses and IP rights have been exposed. We are curious to see when lawyers will start to fight over these properties' usage rights in the Metaverse.
With that said, creators and investors alike need to conduct proper due diligence before indulging in the virtual world. The more practical, real-world value of NFTs as a means of certifying actual goods is less certain. In general, businesses are only now beginning to invest in and use blockchain technology.
However, the technology appears to be here to stay, given its potential and general absurdity. As a result, protecting one's intellectual property rights in this market is critical if you want to stay at the top of your game.
Following the string of NFT fraud and IPRs cases, Attorney Jeremy Goldman raised a few laundry questions regarding NFTs. Some of the questions were; How can IP rights owners, NFT platforms, and issuers limit their liability? If anyone tokenizes a creator's work without permission, what rights and remedies do they have? What are the implications of unauthorized tokenization of trademarked goods and services?
Therefore, we recommend implementing a proactive rights protection strategy to ensure that IP rights holders remain on the front foot. Going to NFT-business in any part of the Metaverse, make sure you have the right partner. That ensures you're confident in what you are selling. The owner of the NFT doesn't want to hear that at the end of the day, they don't own what they paid for.
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