Copyright law safeguards the exclusive rights of authors to their intellectual creations, emphasizing reproduction, public display, and adaptation. A fundamental distinction within this realm is between the intangible creative work and its tangible representations. Owning a tangible embodiment (like a painting) does not grant rights to reproduce the intellectual work it embodies. This demarcation is critical in the dynamic landscape of non-fungible tokens (NFTs), as acquiring an NFT does not automatically confer rights to the associated work. Instead, rights hinge on explicit contractual terms accompanying the NFT transaction. As the world of NFTs continues to unfold in all sorts of directions, delving deep into the intricacies of copyright law is important for artists, investors, and legal practitioners navigating the digital frontier. This chapter offers insights into the various copyright implications associated with NFTs.
Technodeterminism determines the main task for civil law when solving issues related to blockchain technologies and smart contracts. This task is connected with the search for answers to the question of the need to amend civil legislation in order to adapt it to new technological challenges or about the possibility of effective application of existing legal norms to the regulation of innovative civil relations. In the doctrine, there is a hypertrophied attitude towards blockchain and smart contract technologies. The standing exists that due to smart contracts, trust in people is replaced by trust in the code. Eschatological predictions were made about the beginning of the end of classical contract law, about emergance of «contract law 2.0». The paper states that the digital code will not be able to replace reality in the field of contractual relations. The revolution in contract law has not happened. Instead of the «revolutionary path» highlighted by some authors, there is a gradual evolutionary development of ideas about a civil contract. The civilistic doctrine has responded to technological challenges by becoming rhizomorphic in its interdisciplinarity, trying to comprehend the legal phenomena associated with the digitalization of public relations. The «ideological core» of the civil doctrine, the «core» of the concept of the contract, remained untouchable. A legal smart contract has remained a speculative phenomenon from a parallel reality, a simulacrum. The Russian and foreign doctrines are dominated by the traditional interpretation of a civil contract, since the concept of a legal smart contract is not able to solve the problem of its incompleteness. From the perspective of futurological perspective, it can be assumed that the traditional approach to the contract will retain its significance, and the digital code will have only an auxiliary, servicing value for the contract.
Whilst new challenges awaited us in 2022, with the war in Ukraine raging on and the economic downturn and high inflation, practitioners are still and rightfully so continuing to focus on IP Rights (IPRs). The most recent report on IP-intensive industries has shown again how important IPRs are for the economy and for the job market.1 Specifically regarding hybrid working, hybrid conferences and new technologies continued to present challenges in 2022 and, as far as IP is concerned, a specific focus was on non-fungible tokens and the Metaverse. To be able to embrace the future with its continued challenges, learning from the past is a must and, with that, this article aspires to be a helpful guide. The authors start by summarizing the relevant Court of Justice of the European Union (CJEU) judgments interpreting the Enforcement Directive2 before moving on to CJEU decisions pertaining to substantive IPRs. Part 3 covers the relevant decisions of national courts.
These comments address several questions raised by the June 9, 2022 Letter of Senators Patrick Leahy and Thom Tillis, which prompted the Non-Fungible Token Study being conducted by the United States Copyright Office and the United States Patent and Trademark Office (USPTO) (collectively, the âOfficesâ). We are two of the leading legal experts in copyright law and NFTs, and have extensive knowledge of how NFTs are being used by individual artists, startup companies, and big businesses. We submit these comments to the Offices in our personal capacities. We write to highlight three important uses of NFTs: First, NFTs provide greater sustainability for artists and creators by facilitating their ability to receive resale royaltiesâa feature that U.S. copyright law lacks. However, this invaluable feature for artists has recently become uncertain because royalties can be easily circumvented if a marketplace does not fully collect them as some marketplaces have chosen. Second, based on our study, a substantial majority of the leading NFT projects have adopted copyright licenses that are far more permissive than the traditional All Rights Reserved approach adopted by major media companies. The NFTs come with commercial licenses that allow the buyers to make commercial uses of the associated artworks, including in derivative works. This innovative approach fosters decentralized collaboration: whoever buys the NFT with a commercial license can become a collaborator and cocreator with the NFT producers. Third, just as we are witnessing a movement to reshape the financial system to be more decentralized (DeFi) through blockchain technology, we are witnessing a profound movement to reshape the copyright system, through private ordering, to be more decentralized and responsive to individual artists, creators, and the public. NFTs represent a new form of decentralized intellectual property (De-IP). We believe this transformation has the vast potential to âpromote the Progress of Science and useful Artsâ by incentivizing a much broader pool of artists to createânot just works of authorship, but also new businesses for cultural production in the 21st century.
Despite the immeasurable value music provides society, finding ways to monetize their music is often an elusive and challenging prospect for musicians. The music industry has evolved into a consolidated âhits marketâ in which profits are highly concentrated in a small set of intermediaries and relatively few superstars. This âhits marketâ not only makes it incredibly difficult for most musicians to make a living with their music, it also fails to capture and compensate musicians who arenât extremely popular for the significant value they create. In the face of this deadweight loss, non-fungible tokens (NFTs) could be a means of disrupting the economic status quo and creating a superior set of economic incentives for musicians. This Article is the first in the legal literature dedicated to evaluating the viability of NFTs as an additional income stream for musicians. After detailing the economics of the traditional music industry and providing a framework for understanding NFTsâ asserted value, this Article considers constraints imposed by contractual obligations and copyright law to analyze NFTsâ potential to transform music monetization. Ultimately, this Article concludes that, notwithstanding their limitations, NFTs are likely to be an important new source of revenue for musicians who have been left behind by the popularity-driven economic incentives of the traditional music industry.
There is currently a great deal of hype surrounding non-fungible tokens (NFT), fuelled largely by several high-profile and high-priced purchases. NFTs, which harness blockchain technology and represent digitally tokenised versions of assets, are largely misunderstood by regulators, lawyers, and even their users. Although they tend to have aesthetic and sentimental appeal, NFTs are also something of a legal anomaly. This article seeks to explain, in comprehensible terms, what NFTs are, and to highlight some of the key concerns that arise from their use across a variety of legal fields including contract, consumer, corporate, taxation and intellectual property law. It is ultimately concluded that users should, for the reasons provided, exercise great caution when entering the NFT market.
Non-fungible tokens (NFTs) are often hailed as immutable digital representations of ownership or rights to original content, art, or assets. However, from a formal legal standpoint, such descriptions may not hold true universally. This article delves into the complexities of NFTs within the framework of the law, highlighting their potential classification as securities in specific jurisdictions, with consequent implications for property and control rights. Several forward-thinking jurisdictions have enacted advanced regulations governing digital and crypto-based assets, including NFTs and cryptocurrencies. While these progressive regions have successfully categorized certain digital assets and established cutting-edge legal frameworks, they remain exceptions. In most cases, NFTs do not confer legal ownership rights to the tangible or intangible objects they represent. Minting NFTs, conducting NFT transactions, and other related activities can trigger a range of legal consequences, spanning civil, administrative, and even criminal realms. This article clarifies that the widespread characterization of NFTs as digital ownership representations is more of an aspiration for the future than an accurate reflection of their current status. Nevertheless, NFTs possess the potential to become powerful legal tools. This article explores how NFTs may shape the evolution of law in various domains, including property and copyright law. By examining NFTs' multifaceted legal implications, we gain insight into the transformative influence they could wield across diverse legal landscapes. Three years after their debut in the art world, NFTs continue to intrigue and perplex. While their initial hype has subsided, NFTs still hold the promise of revolutionizing contracts, author's rights management, and asset provenance. However, their true impact on the art ecosystem, from artists to intermediaries to consumers, remains uncertain. NFTs may not fundamentally alter the traditional art world's characteristics but rather adapt and enhance existing practices. This article aims to provide a balanced perspective on NFTs' role in the art market and beyond, dispelling some of the more optimistic claims while acknowledging their potential to reshape certain aspects of the legal landscape.
Non-Fungible Tokens NFTs are digitally scarce, non-exchangeable cryptographic tokens that represent an underlying work such as a picture or video and exist on a blockchain, mostly used to trade in digital art and collectibles. They are the most recent blockchain development and offer a great deal of promise for the future in numerous sectors. Despite this they are unregulated and suffer from a bad reputation and illegitimacy that exists across current public blockchains and cryptocurrency, due to fraudulent actors and misconceptions of what is owned with an NFT. In this paper I posit that NFTs could be used to upgrade Digital Rights Management (DRM) through two possible solutions; a copyright register on a blockchain or moving DRM to blockchain â Distributed Digital Rights Management (DDRM). The objective of these solutions is to solve the ongoing problem of digital piracy, which DRM has never been successful in stopping through present-day encryption or content-blocking services. The other benefit is for authors to be guaranteed fair remuneration for their works by cutting out some unnecessary intermediaries and issuing licences through smart contracts. I consider that if successful, these solutions constitute an evolution of digital copyright protection, though they must first overcome legal, practical, and logistical problems. For either solution to be successful, smart contracts must be able to constitute valid legal contracts with binding obligations as all NFTs contain these to execute terms set by the person creating the token (minter). I show that under current Scots law and under England and Wales contract law smart contracts can satisfy formation requirements of a contract, but they still must overcome the challenges presented by blockchain and a lack of intermediaries such as an established dispute resolution mechanism. I demonstrate in this paper that current digital copyright protection could be upgraded with the use of NFTs, specifically in giving authors direct control over the following DRM functions for which previously they were beholden to intermediaries: Assignment; Licensing; Royalty payments; and Registration. Despite this I outline that each solution must overcome some significant challenges, leading me to conclude that a blockchain copyright register utilising NFTs is not likely to be attempted in the near future but could offer huge benefits for exploiters as well as authors. DDRM is a solution already being developed by RAIRtech and is by its nature an idea that numerous companies can compete to develop best. In the final analysis I conclude that despite their issues NFTs <em>are </em>the evolution of digital copyright protection. The bar has been set relatively low with current DRM, meaning an improvement would constitute an evolution, which is evidenced by the lack of reliable ownership information, authorsâ options for revenue, and present-day piracy statistics. <em>This working paper is a part of the "Outstanding LLM Dissertations 2022".</em>
Property law in the twentieth century moved from the law of things to the law of rights in things. This was a process of fragmentation: Under Hohfeldian property, we conceive of property as a bundle of sticks, and those sticks can be moved to different holders; the right to possess can be separated from the record ownership right, for example. The downside of Hohfeldâs model is that physical objects â things â become informationally complicated. Thing-ness constrains the extravagances of Hohfeldian property: although we can split off the right to possess from the right to exclude, use, destroy, copy, manage, repair, and so on, there is a gravitational pull to tie these sticks back into a useful bundle centered on the asset, the thing. Correspondingly, there has been an âinformational turnâ to property law, looking at the ways in which property law serves to limit property forms to reduce search costs, and to identify and celebrate the informational characteristics of thing-ness. The question of thing-ness came to a head in the context of digital and smart assets with the formation of non-fungible tokens. NFTs were attempts to generate and sell âthingsâ a conceptually coherent something that can contain a loose bundle of rights. The project was an attempt to re-create thingness by an amalgam of cryptography, game theory, and intellectual property. This essay discusses thing-ness in the context of digital assets, how simulated thing-ness differs from physical thing-ness, and the problems that arise from attempts to reify digital assets.
Mauritz Kop is TTLF Fellow and Visiting Scholar at Stanford Law School, Stanford University; Founder of MusicaJuridica and strategic intellectual property lawyer at AIRecht, a technology consultancy firm based in Amsterdam. His present cross-disciplinary, comparative research focuses on human-centred artificial intelligence (AI), the Ethical, Legal, Socio-Economic, and Policy Implications of Quantum Technology (Quantum-ELSPI), and sustainable disruptive innovation policy pluralism. Mateo Aboy is Principal Research Scholar in Biomedical Innovation, Precision Medicine, AI & Law at the LML, University of Cambridge and Affiliated Professor and Fellow at the Centre for Advanced Studies in Biomedical Innovation Law (CeBIL), University of Copenhagen. Timo Minssen is Professor of Law and the Founding Director of the Center for Advanced Studies in Biomedical Innovation Law (CeBIL), University of Copenhagen. Specializing in IP, tech-transfer, antitrust and the regulation of health and life science innovation, he is also a senior advisor at the Swedish law firm X-officio and a Quantum Law Researcher at Lund University. Abstract One of the central goals of intellectual property rights (IPRs) and related rights is to incentivize and reward creative and innovative efforts that promote scientific and technical progress and stimulate fair competition through the distribution and commercialization of technologies. Yet, an excessive proliferation of exclusive rights can also result in fundamentally anticompetitive environments with potentially negative effects on scientific research, product development, fair distribution and equitable access to the technology. Hence, a reasonable balance must be found between the stimulation of sustainable innovation and competition, the promotion of scientific research and protection through IPRs. To reconcile these factors, each new technology has led to judicial responses and even modifications to the law. We are on the verge of a technological revolution associated with quantum technologies, including quantum computing and quantum/artificial intelligence hybrids. Its complexity and global significance are creating challenges, which could not have been foreseen when the IP system was developed. This article utilizes the insights gained from qualitative and quantitative studies to (a) inquire which IPRs and related rights are currently directed to quantum computing and (b) examine whether the strategic use of overlapping IPRs might lead to innovation distortions such as excessive anticompetitive effects and underuse associated with property fragmentation. Emphasis is laid on the question if, and if so to what degree, IP portfolio approaches could result in inappropriate proliferations of exclusive rights, raise anticommons concerns and denote unwanted concentrations of first mover market power. It concludes by outlining potential proactive responses to mitigate these risks, while addressing the major future open and closed innovation opportunities, implications and challenges posed by quantum technology in general and quantum computing in particular. Current advances in quantum technology highlight the unique characteristics, promises and perils of quantum technologiesâsuch as the unprecedented capabilities of quantum sensors, secured communications and the potential for quantum computing to solve problems beyond the reach of classical processors by implementing quantum algorithms on programmable quantum computers. The spectrum of potential applications is vast and ranges from uses in health and life sciences (eg, modelling chemical processes at the quantum using quantum simulation) to national security (eg, military uses quantum cryptography, communications and computation). In light of these actual and potential capabilities, national governments have invested over $25 billion into quantum computing research by mid-2021,1 and some reports announce that by September 2021, the quantum technology industry has attracted more than $1 billion in venture capital.2 This will have clear implications not only for the future of business, science, government and the global power game but also for society itself.3 While the predicted consequences of quantum technology remain in part speculative, it becomes increasingly evident that the ethico-legal frameworks for incentivizing, protecting, governing and regulating quantum technologies will have to be carefully studied. These frameworks might potentially have to be adaptedâor newly interpretedâconsidering the new realities presented by second-generation (2G) quantum devices. International organizations, such as the World Economic Forum (WEF), have therefore engaged in developing âthe first set of principles for responsible design and adoption of quantum computing technologies in order to incentivize the development of the technology while minimizing the possible risksâ.4 Consequently, scrutinizing the existing framework for IPRs and how they apply to quantum computing, including their governance and regulatory dimensions, as well the interplay of IPRs with new forms of potentially closed or more decentralized and open innovation systems, are becoming ever more relevant. One of the primary goals of IPRs and related rights, such as patents, copyrights, trade secrets and trade marks, is to reward and protect creative and innovative efforts in order to promote scientific and technical progress, as well as stimulating fair competition through the distribution and commercialization of technologies.5 For example, an effective and predictable patent protection regime is generally regarded as necessary to encourage risky and costly research in complex technologies that take a long time to reach the market but are relatively easy to copy such as many pharmaceuticals. Other IPRs, such as trade secrets, could become more relevant regarding highly complex technologies that are not so easy to copy and face less regulatory barriers. However, overprotection through IPRs can also lead to a situation that would create a fundamentally anticompetitive environment.6 For example, a proliferation of patent rights upstream could potentially hinder essential innovations further downstream in the course of scientific research and product development because each upstream patent allows its owner to create another obstacle on the road to product development, adding to the cost and slowing the pace of downstream innovation.7 Dealing with this potential dilemma, commonly referred to as the âTragedy of the Anticommonsâ, requires a reasonable balance to be found between the stimulation of innovation competition, the enhancement of scientific research and the careful protection of intellectual property rights.8 To maintain such a reasonable balance, each new technology has involved modifications to the law. This is nothing new. The first patents, during the Industrial Revolution, were mostly directed to mechanical devices and articles of manufacture. When chemical law the existing framework to solve new problems posed by and of based on and by the of and as well as in and have also led to many and a of law and We are currently on the verge of a new technological revolution associated with quantum technologies, including quantum its complexity might create challenges, which could have been foreseen when the system was this this article (a) which IPRs and rights would be to quantum technology and (b) an of whether the strategic use of of IP rights to the of a quantum IP portfolio potentially might lead to anticompetitive of market and competition and In this it would progress in an of quantum quantum will therefore be laid on the question if, and if so to what degree, overlapping IPRs could result in an inappropriate of global exclusive rights for first and in an unwanted of market power. 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Digital art is the result of creative activity practiced in the virtual space. There is no unified concept of digital art in Russia, and there is no legislative consolidation of this term. In this regard, attempts to find an answer to what digital art is and what rights its acquirer has are topical issues of Russian legal science. At the same time, under the influence of technology, as a result of the development of the blockchain, new ways of handling digital art objects have appeared. The appearance of non-fungible tokens (NFT) causes a lot of legal problems. The study of these problems is the most important task for modern lawyers. The purpose of the study is to identify the legal qualification of digital art objects. In this regard, the author sets the task to study the structure of NFT as an object of civil law. The purpose of the article is also to identify potential risks for intellectual property rights holders when issuing NFT. The methodology of this research is based on the use of a set of general scientific methods and specific methods of analysis used in legal science: system-structural method, system-functional, induction and deduction, analogy, method of formal logic and system approach. In particular, the dialectical method provides an opportunity to systematically explore the unity of social content and legal form of art objects in the digital space. The formal legal method makes it possible to form legal categories by highlighting the main features of phenomena related to research questions. The author has made assumptions about the legal nature of digital art and NFT, as well as their place in the system of intellectual property law. The author has come to the conclusion that crypto art is one of the types of digital art. A specific feature of cryptographic art objects is that their emergence and existence is possible only in blockchain. As a result of the conducted research, it has been revealed that not all NFTs connected to art objects are crypto-art objects in digital commerce.
The metaverse gained its momentum after a CEO of the biggest social media made a statement that it would be the next big thing after the Internet. Although there is no single, agreed definition of the metaverse, the common understanding of the metaverse is that the concept combines IoT, AR, VR, XR, and 3D technologies. It is also called the Web 3.0. The market capital and the economic potential of the metaverse are enormous. The market cap was calculated around USD14.8 trillion in October 2021 while the economic potential ranged from USD3,75 trillion to USD12.5 trillion. Hence, it is of importance to discuss the legal aspects of the metaverse. This article is the first to elaborate the legal conundrums of the metaverse in a more proper manner. It includes discussion on the property law and intellectual property law, and whether the time has come to have âa virtual property lawâ. It also discusses some other legal aspects such as privacy and data protection, contract law and smart contracts, cybersecurity and cyberattacks, monetary and payment systems laws, and regulation of virtual assets (including securities and commodities laws), tax law, anti-money laundering and KYC, and criminal law. To give a more comprehensive view, some governance and ethical issues of the metaverse are also touched upon.
Non-fungible tokens (âNFTsâ) are a recent addition to the cryptocurrency universe and have attracted the attention of different stakeholders in the sports world over the last two years. Because they can identify and authenticate particular content, NFTs have become a hot commodity among collectors and investors, in some cases selling for millions of dollars. The sports industry has been a major contributor to NFTs, with athletes, teams, colleges, and leagues issuing or planning to issue NFTs. Because of their recent vintage, NFTs are creating novel and significant intellectual property law issues. This article will explore some of the key issues by utilizing a case study of a hypothetical NFT production of an image found in a painting, which is based on a copyrighted news photo. The article will analyze the copyright issuesâwhether the NFT can be copyrighted, whether it constitutes a âtransformative work,â and whether there are grounds to consider it a derivative or secondary work. This article will also discuss traditional concepts and dilution issues by trademark holders and publicity rights claims against the issuer of the NFTs by the estates of the athletes portrayed based on various state laws. It will then examine the balancing between the rights of estates to protect and profit from their images, and the free expression rights of the creator of the NFT. It will compare two principal standards for making this determinationâthe âtransformative useâ test adopted by the majority of federal circuits and the âpredominant useâ test utilized in Missouri. Recent case law will be cited, in addition to key statutes.
Imagine you are taking a stroll in the virtual city of Meta-Worse1 when you meet John Lennon. John has not been brought back to life, as you have probably guessed; this entity is an avatar that exactly replicates Lennonâs appearance and voice. John tells you that he has transformed the genome sequence of the influenza virus into a song that is available on the Rarible platform as a non-fungible token (NFT). You recall that there is an unauthorized minting of NFTs relating to the same song on another platform. You have also started your own collection of NFT artworks in your virtual âhomeâ. Many buyers of NFT artworks are complaining they were unaware what intellectual property rights have been accorded them by their purchase of these NFT artworks. You then visit a clothing store. Jay, an AI-powered sales assistant avatar that has the gift of gab and can respond to human speech, persuades you to purchase a Nike shirt. A call comes in, and you leave the purchasing decision to your personal AI-avatar, which shares your biometrics data with the sales assistant. Unbeknown to you, the shirt is a counterfeit. Passing by the virtual red light district, you see that workers in many of the virtual adult theatres are wearing the same Nike shirt, prompting you to conclude that Nike is a major sponsor of these establishments. You take a picture and post this on your real-world Instagram, where you have over 1 million followers. You cannot get over the excitement of meeting John, so you instruct your AI-avatar to create a doctored video clip, in which John appears to be swearing while singing, to keep yourself entertained. Your Meta-Worse account is hacked, and the clip is now shared with audiences on all the major meta-platforms and in the real world. The video itself is then tokenized and sold as an NFT by anonymous digital thieves without your permission. As Brian Eno has facetiously remarked in this context: âRight now, I mainly see (NFTs) hustlers looking for suckersâ.2 Welcome to Meta-Worse. In terms of technical advancement and human behaviour and interaction, cities like Meta-Worse are providing hitherto unimaginable opportunities for transformation and perhaps even progress. Yet, the metaverse has simultaneously created a lawyerâs mega paradise. It raises fundamental questions related to privacy, deception, misinformation, non-consensual pornography, image rights, deepfakes, defamation, algorithmic transparency, anonymity and authenticity. These issues cluster around a single foundational dilemma: who is liable for what? Such difficulties are only amplified by the increasing complexity and interdependency of AI systems. This phenomenon, in turn, means it is becoming harder to assign legal responsibility to avatar owners, software coders and metaverse operators, all of whom may have varying degrees of control over the AI systems in question. Full disclosure and transparency form the foundations of liberal democracies. With digital platforms now inextricably linked to our societyâs infrastructure, it is time to abandon secrecy and mystery in favour of transparency. Open, transparent, fair and accountable algorithm decision-making processes must now underpin the operating principles set for and by platforms and policymakers. After all, from a legal perspective, it is we humans who will ultimately have to bear the costs. We must now devise tools and systems to internalize these costs and regulate ex-ante. For instance, human approval should be made mandatory in certain settings in which AI-avatars are deployed, for example, in digital health services or virtual commercial transactions. Platforms should clearly set out consent policies for data-sharing. Additionally, metaverse users should be informed whether their interactions are taking place with a human-controlled or AI-powered avatar. In sum, the city of Meta-Worse demands an entirely new type of legal infrastructure. This parallel judicial universe, an independent meta-system with its own virtual jurisdiction, is nothing less, in fact, than an entirely new legal order. As such, it is tasked with regulating meta âgovernmentsâ and âconstitutionsâ with a direct impact on billions of people around the world. It follows that any operating policies or procedures that platforms develop in the digital universe have the potential to become international legal conventions and norm-setting principles, not unlike a form of soft law. In Meta-Worse, platforms now act as legislators, promulgating regulations and procedures on fundamental rights, which have a global impact and legal footprint.3 Digital due process is now urgently required or, in the inimitable words of Sir Tim Berners-Lee, âwhat the online world needs now is a Magna Carta for the world wide webâ.
The DSM Directive preserves, on the one hand, the public domain, by restricting copyright in faithful reproductions of public domain works. On the other hand, there are copyright opportunities for digital art and non-fungible tokens. The Directive also creates opportunities for preservation and digitization for cultural heritage institutions. There are opportunities there that can be put to good and productive use in the interest of all parties involved. Extended collective licensing and measures for out-of-commerce works can also play a role here. And moral rights will not be a hindrance in that respect if industry standards of the digital era are observed. It is therefore important to continue and to strengthen the dialogue between the cultural heritage institution community on the one hand and the copyright and related rights community on the other hand.
The paper aims at determining the utility of NFTs within the current EU framework of copyright, specifically from the authors' perspective. The issues of technical feasibility and scale of adoption remain beyond the scope of the paper; the focus lies rather on the legal aspects, particularly the case law of the CJEU. For authors, the NFT landscape is currently filled with potential economic benefits, as well as perils. With this in mind, the paper anticipates future legislative and judicial interventions in the new area. The paper's answer to whether NFTs could be relevant for copyright law is a resounding "yes", potentially allowing the effortless dissemination of content to finally work in the authors' favor, instead of incurring enforcement costs. Interestingly enough, the answer is justified with the example of tokenized internet memes.
Abstract The viability of exponentially growing non-fungible token (NFT) market is evaluated by identifying potential value-generating mechanisms that can be rationalized. After identifying the value-generating mechanisms underlying the positive values of NFTs, this study establishes a pricing model for NFTs that follows a continuous-time financial framework. As NFTs are claimed to securitize âownership rights short of useâ, and as such they may potentially serve as a substitute for the need to rely replace the reliance on the legal protection provided by intellectual property rights (IPRs). Considering this issue, this study evaluates the likelihood that NFTs will replace existing mechanisms that protect producersâ rightful claim to use their assets or the need to apply the legal code that governs IPRs. The financial condition for this potential shift is derived for a category of assets whose use or consumption does not reduce supply as the notion of scarcity does not apply.