By Lorraine Galvis, Esq.
NFTs, or “non-fungible tokens”, are fairly new to the marketplace, but growing in popularity at a record pace. From a legal perspective, there is still much to be learned about this developing technology and its vulnerabilities. However, this gap of knowledge has not slowed down interest or participation from creatives, entrepreneurs, or artists, who have begun creating NFT content and are looking to meet the desire of fans and collectors to own or hold NFTs. As an attorney, my goal is always to evolve with my clients and find ways to help them at every level of their growing business. For our tech and artistic clients, all signs inevitably point to their involvement with NFTs at some point.
Though we are still learning about NFTs and how they work, many clients come to us for answers when it comes to protecting their creations… and we like to have some answers or guidance for them! The U.S. provides creators with access to federal protection from copycats and the unauthorized use of their creative works and brand identifiers through two main legal systems: copyright law and trademark law. Copyright law gives you the power to legally go after people who illegally copy and distribute your drawings, designs, photographs, music, film, videos, books, web designs, and much more. Trademark law gives you the power to go after people who illegally copy or use your registered (keyword!) name, logo, slogan, or jingle to sell the same products or services, which inevitably creates confusion and misleads your customers, potentially affecting sales and your reputation. Trademark protection applies to physical goods, like t-shirts, jewelry, or downloadable music, for instance, and digital goods, like NFTs and the clothing you’d buy to dress your avatar online.
How do you get access to this incredible legal power? You REGISTER. In order to sue someone for copyright or trademark infringement, you would be best positioned to do so if you actually OWNED the copyright or trademark to the content or brand identifier you are suing for or looking to defend. Allowing others to copy or use your content or brand identifiers without your consent or permission can have serious consequences on your business. Find an attorney who is experienced with trademark and copyright registrations and let them help you figure out what the best approach is to protect your content, including that new NFT project you’re considering or working on or already planning to launch soon!
Let’s take Martha Stewart’s 2021 Halloween collection for example. If you click on her website and browse her collection, both the website and the content she is selling or auctioning is unique, but actually pretty cool! She has NFTs that are auctioning or selling for anywhere from $1-4k. One of her higher-priced NFT items (over $15K) includes “NFT animation of the original Martha costume portrait, digital files of the portrait and the animation, physical print of the portrait signed by Martha, and a signed note from Martha to [the] auction winner” as part of your purchase.
Several elements of this NFT offering on Martha’s website qualify for federal protection under U.S. copyright and trademark law. For example, the physical photo itself is eligible for copyright protection. By registering the original photograph, Martha reserves, or basically owns, the right to create and distribute prints of this photograph for sale or reproduction, just like the website says. Martha can also license, or give or assign, this right to any other person or entity she wishes, allowing that person or entity to also sell or reproduce her registered photograph on their website or any other physical or digital platform (depending in the terms of the license).
Martha Stewart also owns several trademarks for several of the products she makes and sells under her widely recognized brands, from pillows, to a TV show, to her arts and crafts collections, to recently NFTs. Both the names and logos of her products and services are registered with the USPTO. As of the date of this article, Martha Stewart, whose net worth is approximately $400 million, owns at least 48 active trademarks in the United States.
Want Martha Stewart-level success with your content? A good place to start is to take the time and legal steps to protect the content and brand identifiers you create. If you don’t give your content and commercial or public identity its rightful value, how can you expect anyone else to invest or see what you see as valuable? Talk to your attorney and find out how you can register your creative works, including your new NFT collection, for federal U.S. protection.