With the Oscar's behind us, and a new year of film, TV, and music to keep our eyes fixed upon, it begs the question of how long these traditional award shows, like the Academy Awards, Golden Globes, Emmys, etc. will continue to present award-winners with the physical award/iconic statue for?
Could you imagine, as an actress, actor, producer, director, showrunner receiving an Oscar, Golden Globe, or an Emmy in the form of an NFT, rather than the iconic figurine that has been used for many years? In other words, what if the award shows that our industry so desparately clings onto, finally did away with the physical award itself?
Many blockchain technology enthusiasts believe the Hollywood film industry should move to the Blockchain, allowing new creators the ability to circumvent the traditional pathway of walking up on a stage and accepting that physical award.
Last month, Saturday Night Live (SNL) performed a short called, "What the Hell is an NFT?", which parody aside, couldn't have come at a better time for the general public outside of the blockchain and crypto world, to have some idea and conceptualiztion as to why NFTs are all the talk right now.
NFTs, or non-fungible tokens, can represent almost any real or intangible property, including artwork, music, videos, collectibles, trading cards, video game virtual items, or even real estate. An NFT is a digital version of a certificate of authenticity, embodied in code on the Blockchain, rendering it impossible to replicate, duplicate, or have an exact copy of it, adding to the rarity and scarcity of the item itself.
Collectibles Aren't a New Concept...
Conceptually, collectibles aren't a new phenomena. If you are a Millennial or Gen-Z reading this, think back to items you used to collect (or perhaps still do), such as Beanie Babies, POGS, Pokémon trading cards, etc. With each collectible, either we or our parents, were spending hundreds of dollars purchasing them.
But, once we had them, what did we do with them? For some, playing with them was the only purpose, while others would have an anxiety attack thinking about these items anywhere but in a glass enclosure or plastic sleeve, protecting them from the real-world, to then sit on a shelf collecting dust. Over the years, these items would eventually find their ways into a box in the attic, or hidden amongst and between newer items and collectibles, taking up more physical space.
Do NFTs Challenge Our Traditional IP Laws?
No.
The world of digital collectibles has certainly sparked a new creative form of innovation and intellectual property protection. NFTs, or non-fungible tokens, which brings us to the advantages NFTs now bring to the legal landscape, as it relates to IP laws.
Traditionally, if you an author of a work of art, the rule is that the author of that work retains the copyright in their original creation, according to U.S. law. Although NFTs and other projects on the Blockchain present a minefield of potential copyright violations, there is nothing about this new form of innovation that renders our traditional intellectual property (IP) laws inapplicable.
Under Article I, Section 8, Clause 8 of the United States Constitution, also known as the Intellectual Property Clause of the U.S. Constitution, Congress is granted the enumerated power "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries."
Since music was first digitized back in the 1980s with the creation of the .MP3 file format, intellectual property laws have been threatened, and have only continued to be vulnerable to attack from new forms of creation, including online streaming and downloading.
Think back to when Bearshare, Limewire, and Kazaa first came out, right? The introduction of peer-to-peer (P2P) file-sharing scared the entire entertainment industry, particularly presenting cause for alarm to the RIAA, or Recording Industry Association of America, and for good reason.
Now, with Hollywood dipping its toes into the world of Blockchain (finally), the potential for high-profile talent to create unique works of art, for the sole purpose of auctioning it off, how does this new form of technology impact IP holders?
Why IP Owners Should Be Rethinking Their Licensing Strategies
Most IP owners, unfortunately, have not yet considered the role NFTs play in connection with their current IP protection strategies. Intellectual property owners can grant licensed to their IP for many uses (as well as limited uses). However, given the recent phenomena and rate of NFTs' growing popularity, it's unlikely the majority of IP owners have taken a step back to re-evaluate their current portfolios.
What IP Owners Are Affected?
Specifically, IP owners that could be impacted by the growing popularity of NFTs, include, but are not limited to brands that have famous trademarks, logos, and other brand identifiers.
We have already seen a potentially damaging impact to Nike's brand, after a Brooklyn company that collaborated with music artist, Lil Nas X to produce "Satan" shoes, was sued by Nike for trademark infringement for offering, selling, and distributing a black-and-red, devil-themed sneakers, carrying the Nike "swoosh" logo and priced at $1,018 a pair.
It was recently announced that Nike has settled its lawsuit against the Brooklyn company, whereby the shoes will be recalled, according to The Guardian.
Nike said on Thursday it has settled its lawsuit against the Brooklyn company that collaborated with Lil Nas X to produce his Satan Shoes, and that the shoes will be recalled.
For product placement contracts, NFTs present a unique opportunity for media executives to consider auctioning NFTs that represent certain products that are integrated into film. Just think about the numerous brands and products we've seen over the years from films such as the Bond franchise or Bad Boys?
Hollywood product placement executive, Lorenzo Rusin weighed in on the importance of brand integration in what we hope will be a post-COVID-19 entertainment realm. “It’s a really great question to ask, because today with the ways in which we are absorbing content, primarily through digital streaming platforms, brands now have the ability to ‘live’ forever, he told True Hollywood Talk. “Brands are forever immortalized in these works; a simple placement is all it takes…but it needs to be tasteful.”
And to Rusin's point, being "tasteful" doesn't stop at NFTs. "It all matters," Rusin says.
Gaming Companies
Next, gaming companies that have unique characters or game art. Have you heard of Terra Virtua? The entertainment platform is partnered with Paramount Pictures and Legendary Entertainment, which has provided Terra Virtua with the rights to license digital collectibles based on some of the studio's biggest films like Pacific Rim: The Uprising and Top Gun, according to The Jerusalem Post.
Authors, Publishers, Film Studios
For those authors and book/movie publishers, who may have unique characters, storylines, and other unique IP, the world of NFTs pose a threat, if the proper licensing strategies are not re-evaluated and re-implemented.
Artists
Whether we are talking about music artists or actual artists who create physical or digital works, this is a whole new ballgame in terms of ensuring limited edition works are properly auctioned off to consumers/fans.
Think about it, how much would someone pay for the digital rights to an autographed copy of a selfie? Well, that's what talk show host Ellen DeGeneres recently did, announcing her first NFT to be a selfie of her holding a crude stick-figure drawing of a cat she created.
Yes, NFT Owners Can Still Get Sued...
As opportunities for tokenized content continue to surface, it is important for NFT creators to be cautious about incorporating third-party IP into their NFT content, otherwise, expect a cease & desist from the affected IP owner.
Regardless of the "newness" to the concept of digital collectibles, NFT owners are not exempt from current intellectual property laws, simply because it's a new form of creation. Indeed, traditional law still applies to decentralized blockchain technology, so creators need to think twice before feeling confident about using third party brand names, logos, famous characters, pictures, videos, music, or other third-party IP without first obtaining the IP owner's permission.
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