According to WIPO (World Intellectual Property Organization), Intellectual Property (IP) refers to the unique inventions or creations of any form, such as art, music, pictures, etc., by anyone. In order to preserve the creators’ rights to their creations, intellectual property protections such as copyrights, patents, and trademarks are being enforced.
Over the past few years, the metaverse has been evolving constantly and attempting to trade goods and services as we do in the physical world. NFTs (Non-fungible Tokens) came into existence during the period of the early 2010s but earned popularity in 2021. They are distinct digital units representing the metadata of digital assets. Read more to learn about the relationship between IPs and NFTs.
What are NFTs, and how are they stored?
NFTs are unique and non-interchangeable digital tokens that are stored using blockchain technology. Blockchain technology is a decentralized technology where every transaction record and ownership details have been stored securely. The NFTs minted (created) and stored in the blockchain database are the products’ metadata, not the actual products. This is where the confusion arises with the ownership of the NFTs.
How do IPs protect NFTs?
Like the physical world, infringements and unauthorized usage can happen in the metaverse too. Though we can protect the uniqueness of NFTs through IP protection methods, their ownerships are still confusing.
Anyone who creates or mints an NFT doesn’t hold the owners of the actual product itself but the digital token that holds the product’s metadata. Anyone who buys the NFT buys the metadata and not the ownership of the product. If anyone wants to buy the product’s copyright, he has to ask for the transfer of ownership and copyrights.
Copyrights, Patents, and Trademarks of the NFTs
When someone holds the copyrights of a product, he has the right to modify or reproduce it. As mentioned above, whoever buys an NFT does not buy the ownership of the underlying product or work. The buyer can acquire the original copyright of a product only when the creator agrees to transfer the copyrights to the NFT buyer. Without obtaining the copyright, if the NFT buyer tries to modify or reproduce the underlying product, it will be considered a copyright infringement.
For business purposes, creators who want their works to be unique must trademark their NFTs. If anyone tries to mint or sell the trademarked NFTs, it will be considered trademark infringement. Likewise, patenting the NFTs will prevent the assets from infringements and provide effective ways to monetize them.
Conclusion
Since NFTs became popular in 2021, most people have been unaware of their importance. NFTs are effective in increasing sales through tokenizing them in the metaverse. IP protection prevents anyone from using or modifying the product other than the owner, not only in the physical world but also in the metaverse. So, understanding the importance of IP protection and following its regulations carefully is essential to protect your digital assets.