Posts

NFT Copyright Law

Copyright Law & NFTs

NFT Copyright Law

The explosion of Bitcoin and other cryptocurrencies has led to interest in related digital assets. Among the most popular – and volatile – of those digital assets are Non-Fungible Tokens, or NFTs. As more and more investors consider NFTs, questions are being asked about the legality of this technology. Specifically, people want to know about copyright law & NFTs. Is it possible to hold a copyright for an NFT? Are you allowed to create derivative copies of your NFT and reproduce it? If an NFT was created from an original work, what are the copyright implications for that original work? This is a murky area of the law that is still developing, and it has implications for a lot of people: NFT buyers, NFT sellers, and pretty much anyone who owns a copyright.

To learn more about NFTs and copyright law, keep reading this blog.

What Are NFTs?

On a superficial level, Non-Fungible Tokens (NFTs) are just digital works of art. Some of the most well-known NFTs are digital copies of original works that exist in the real world, such as paintings, music, collectibles, and even tweets. Other NFTs were created exclusively as digital artworks.

Of course, NFTs are significant for reasons that go beyond art appreciation. NFTs are non-traditional assets with a unique quality to them: they are not interchangeable and cannot be divided. By contrast, a Fungible Token like Bitcoin can be broken down into fractional values, so that the owner of a Bitcoin can sell 50% of it and keep the other 50%. The uniqueness of each NFT is what generates a great deal of interest in them, since they are perceived to be incredibly scarce.

Another interesting aspect of NFTs is that they exist entirely on something known as the blockchain, which is a kind of technology that allows information to be permanently stored on a computer network. When someone purchases an NFT, they are purchasing a link to the Token on the blockchain. NFTs essentially function as certificates of ownership. Importantly, the Tokens are entirely digital, with the transaction records traceable online. In one sense, this makes NFTs similar to both real property and intellectual property in that their ownership history is recorded. Additionally, NFTs and Bitcoin are assets that can be traded on certain digital platforms.

Is an NFT Copyright Protected?

NFTs have been in the news lately because the cryptocurrency market has seen sharp declines in value, with many observers wondering if the bottom has fallen out on the NFT market as well. The fact remains, however, that NFTs still have a great deal of value, especially as some owners look to sell their digital assets. This makes it vital to understand how copyright law might impact NFT owners.

First, anyone who buys an NFT should understand that the sale typically does not involve the copyright for the original work that exists outside the blockchain. That’s because an NFT is a derivate of that real-world work, even if the NFT itself is unique. As set forth by the Copyright Act of 1976, only the copyright holder has the right to reproduce the work, distribute copies of the work, and publicly display or perform the work for commercial benefit. The bottom line is that when you buy an NFT, you don’t own it. You cannot create derivative works and sell copies because doing so will impact the intellectual property rights of the person or entity who holds the copyright to the original work.

Given that many NFTs are based on original works, there is also some question about copyright enforcement. Since only the copyright holder has the authority to use their original work commercially, and since NFTs are by definition “reproductions” made for commercial purposes, the NFT market has created a need for copyright holders to monitor social media platforms, websites, message boards, and other areas of the internet for copyright violations. In some instances, NFT copyright violations are so flagrant that it may be necessary to speak with an attorney about sending a copyright demand letter or DMCA notice to the offending party.

Contact the California Copyright Lawyers at Tauler Smith LLP

If you are an artist, business owner, website operator, or other individual whose copyright has been infringed, the Los Angeles copyright lawyers at Tauler Smith LLP can help you. Our legal team understands federal intellectual property law, and we know how to win these types of disputes. Call 310-590-3927 or submit an online contact form to schedule a free consultation.

Copyright Cease & Desist Letters

Responding to Copyright Cease and Desist Letters

Copyright Cease & Desist Letters

One of the most common tactics used by copyright trolls is sending a cease and desist letter demanding that you stop using “their” intellectual property, as well as insisting that you owe them a substantial amount of money for any use that has already occurred. These letters are ostensibly supposed to put you on notice about a copyright violation, but they are often abused by individuals and companies who are simply looking to make a quick buck by threatening a frivolous copyright lawsuit. Responding to copyright cease and desist letters usually requires a solid understanding of intellectual property law, which is why it is imperative that you speak with an experienced California copyright lawyer before communicating with the other party in your copyright infringement case. An attorney can draft an effective response to the letter, as well as ensuring that you don’t make any damaging admissions that might be used against you later if the case goes to trial.

For more information about how to respond to copyright cease and desist letters, keep reading this blog.

What Does “Cease and Desist” Mean?

The legal definition of “cease and desist” is to prohibit a person, company, or other entity from starting and/or continuing a particular action. Basically, the sender of a cease and desist letter wants the recipient to stop doing something. In the context of a copyright infringement claim, the objective of a cease & desist letter is to get the alleged infringer to bring an end to their unlawful use of a copyrighted product or service. For example, if you are accused of publishing a photograph on your website or social media account without authorization to do so, the photograph’s copyright holder may send you a DMCA notice alleging that you violated the Digital Millennium Copyright Act and demanding that you take down the photo by a specified deadline. The letter might provide information about the sender’s copyright registration, as well as screenshots of the alleged unauthorized use by the recipient of the demand letter.

Most cease and desist letters include some kind of warning – either implied or explicit – of legal action if you fail to stop the conduct and/or refuse to compensate the original copyright holder for your use of their intellectual property. This last part is what a copyright troll is likely to focus on: getting paid a few thousand dollars. Moreover, since they are often represented by aggressive intellectual property attorneys, many copyright trolls are able to effectively use the threat of a lawsuit to get the recipient to settle the case quickly.

The Best Response to a Cease & Desist Letter Accusing You of Copyright Infringement

Since a cease and desist letter typically comes from an individual or company and it precedes litigation, its “demands” are more like “requests” that you are not legally required to respond to or comply with. Only when a court issues a cease and desist order that enjoins your use will you actually have to stop using the intellectual property. But a strong response to the cease & desist letter may be your safest course of action. The reality is that many copyright cease and desist letters are sent by copyright trolls attempting to intimidate and bully the recipient into paying the sender in order to avoid costly litigation. Even if you have a right to use the intellectual property, such as a fair use exception for non-commercial use of an image or video, the threat of legal action can make it difficult to fight back against a copyright troll with vast financial resources. That’s why your initial response to the cease and desist letter is so important: it may be your best chance to stop the IP litigation dead in its tracks and avoid the need for costly legal action.

The best answer to a cease and desist letter is usually one that convinces the other party to drop their claim. You may want to point out any facts favorable to your case, including any copyright exceptions that justify your IP use, statute of limitations issues, or the existence of a licensing agreement that allows for your use of the original work. Additionally, having your response drafted by an attorney will send a powerful message to the other party that you are not going to simply back down and pay them. If you respond to the letter on your own, and without the assistance of a qualified lawyer, you might not be taken seriously.

IP Licensing Agreements

In some copyright cases, the sender of a cease and desist letter is looking to enter into a licensing agreement where the recipient can avoid litigation by agreeing to pay a fee to the copyright owner for licensed use of the intellectual property. Depending on the circumstances, an intellectual property attorney may be able to assist with those licensing negotiations so that you can minimize liability and still retain your ability to use the image, video, or other type of intellectual property at issue.

Contact the Los Angeles Copyright Attorneys at Tauler Smith LLP

Whether you’ve received a cease and desist letter alleging copyright infringement, trademark infringement, patent infringement, or any other type of intellectual property violation, you need to speak with a qualified attorney immediately. The Los Angeles copyright lawyers at Tauler Smith LLP understand the nuances of IP law, and we have experience dealing with copyright trolls. We are prepared to help you draft a strong response to the copyright cease and desist letter.

Call the Tauler Smith legal team today at 310-590-3927 or submit the online contact form.