A recent U.S. government report has stated that changing intellectual property (IP) laws in the United States is not necessary at this time, despite the prevalence of piracy and IP infringement on nonfungible token (NFT) marketplaces. The report, a joint study conducted by the U.S. Copyright Office and Patent and Trademark Office (USPTO), focused on the implications of IP law and policy in relation to NFTs.
The study acknowledged that NFT technology is unable to prevent unauthorized copying and highlighted the widespread issue of trademark infringement and misuse on NFT marketplaces. However, despite these findings, the agencies concluded that there is no need for changes to IP laws at present.
The report emphasized that if an NFT contains or links to an unauthorized copy of a copyrighted work, it would be subject to copyright law in the same way as any unauthorized reproduction or display. It also noted that there are already existing enforcement tools available to address infringements linked to NFTs, just as there are for other online infringements.
Kathi Vidal, the Under Secretary of Commerce for Intellectual Property and USPTO Director, acknowledged that NFTs offer unique opportunities for creators to leverage their IP rights but also present new challenges in terms of securing their work. The report also highlighted consumer confusion regarding IP rights and the legal status of smart contracts. However, it concluded that these concerns would be better addressed through education and consumer protection measures rather than changes to IP laws.
The report did not present any specific proposals for utilizing NFTs or blockchain technology in U.S. patent and trademark registrations, but it stated that the potential of these technologies will continue to be explored.
The study and report were initiated in response to a request from an IP subcommittee of the U.S. Senate Judiciary Committee in 2022.
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