Cryptocurrency intellectual property

This is a preview of content from Crypto Investor, a new scoops-only newsletter covering the institutional adoption of crypto. Learn more and sign up here. IBM , the longtime top U. With the launch of the tokens, patents join a growing list of NFT use cases that includes stocks , real estate , music , magazine covers and sports collectibles.

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WATCH RELATED VIDEO: IP intellectual Property Attorney on NFTs Non Fungible Tokens

Are You Protected from Blockchain and Cryptocurrency Lawsuits?

The most innovative part of blockchain is that it is decentralized : not controlled by any one person or company. It is transparent in the sense that anyone can view the ledgers if you know where to look. Blockchain technology can be used in several applications and is not limited to cryptocurrencies. Non-fungible tokens NFTs are the newest high-profile example of broad applications of this emerging technology.

NFTs are now taking the world by storm as sports memorabilia companies and art auction houses leverage these tokens to exploit increased value from digital assets. Musicians, artists, and publishers, for example, have harnessed NFTs to monetize their works and exploit their intellectual property rights.

In this article, we discuss intellectual property law aspects of NFTs and related innovations. An NFT is a digital asset whose authenticity has been certified on a blockchain ledger. Although they both use blockchain technology, an NFT is different from cryptocurrencies. Cryptocurrencies, like Bitcoin, Ripple, and Ethereum, are fungible tokens, which means each cryptocurrency unit is the same as any other.

Like regular government-issued money, these tokens are interchangeable and indistinguishable. Likewise, the U. On the other hand, with non-fungible tokens, each unit is distinctly identifiable and is defined by metadata, secured on a blockchain ledger that incorporates a unique role, function, and value.

To wrap your mind around NFTs, consider the following illustration. Owning an NFT is akin to owning an autographed photograph of a movie star pinned to your bulletin board. Only you can be the owner of that photograph. Similarly, only one person can own an NFT. However, as discussed in more detail below, the original creator of that photograph may own underlying intellectual property rights that permit them to make copies, prints, or derivative works of that photograph.

NFTs are not a novel technology. In fact, video game developers have used NFTs in gaming for many years. A prominent example of previous applications of NFT includes CryptoKitties, which was one of the earliest adaptations of non-fungible token technology and enabled players to collect and trade digital cats using NFTs. They can also be used inside gaming environments to represent in-game assets, which can be controlled by the user instead of the developer.

Similarly, digital art is not new. The artist Andy Warhol began using computers to make and display art in the s. Now that we understand what NFTs are, you may be asking why they are so prevalent? There are already signs that this is a bubble.

Nowadays, everything is being tokenized, resulting in an emerging market and record prices for NFTs. NFTs can represent ownership of nearly any real or intangible property in digital form. This includes works of art, musical works, multi-media works, and collectibles, such as trading cards. Put simply, an NFT is the digital version of a certificate of ownership or authenticity securely recorded on a blockchain ledger.

Examples of these NFT marketplaces include Superfarm, Ethernity, and OpenSea, which have facilitated the exchange of millions of dollars for various digital assets such as trading cards and digital collectibles. The non-fungible nature of NFTs has created a new distribution model for monetization of intellectual property. Given some of the unique aspects of NFTs, intellectual property owners need to rethink their intellectual property protection and licensing strategies.

As NFTs continue to grow in popularity, companies and creators should include specific NFT protections in their intellectual property protection strategies. Due to some of the unique aspects of NFTs, various new considerations need to be addressed when licensing, assigning, or transferring intellectual property rights. Further, NFT creators need to be mindful of potential infringement issues when using third-party intellectual property and should also consider intellectual property protection for their original creations.

It is no surprise that third-party intellectual property is often intertwined in NFTs without proper authorization or permission from the rights holder. In some cases, NFTs include unauthorized copyright-protected content. Predictably, intellectual property rights owners are increasing their enforcement efforts against unauthorized uses of protected content in NFTs. NFTs have massive monetary influence in the entertainment and collectibles worlds, but, it remains unclear how NFTs impact the underlying intellectual property.

What is clear, however, is that the rights associated with acquiring NFTs other than the right to own are limited. There appear to be immediate applications of NFTs. Specifically, this tokenized technology could be used in fields such as watermarking, where creators can use NFTs to verify the authenticity of digital artwork or trading cards.

Regardless of how NFT technology is exploited in the future, one thing is certain—NFTs should not be confused with inherent confirmation of the authenticity of goods themselves. This is especially important as reports of fraudulent NFTs increase. When considering intellectual property implications of NFTs, it is important to distinguish between ownership of the NFT and ownership of their underlying intellectual property.

The rights granted by an NFT seller depend on the rights transferred via a license or assignment, and these can vary with every NFT. In the context of copyright, ownership of the underlying rights will only transfer if the author of the original work expressly agrees to transfer those rights to the NFT owner.

Generally, without such an agreement, ownership of an NFT will not grant ownership of the underlying content or any associated intellectual property rights. As a result, an NFT owner may not be permitted to reproduce, distribute copies, publicly perform, display, or make derivative works of the original work.

Instead, the copyright owner retains the exclusive rights. As with any new application, clients involved in non-fungible tokens and blockchain technology, including companies, creators, and artists, should seek legal counsel to ensure their intellectual property rights are preserved and properly enforced. Intellectual property attorneys can assist companies in identifying protectable content and subject matter, recommending best practices and proper safeguards to protect works from improper exploitation.

See more ». This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies. To embed, copy and paste the code into your website or blog:. What are NFTs? Why NFTs? Conclusion As with any new application, clients involved in non-fungible tokens and blockchain technology, including companies, creators, and artists, should seek legal counsel to ensure their intellectual property rights are preserved and properly enforced.

Send Print Report. Dickinson Wright. Paul Bain. Caleb Green. Cindy Villanueva. Published In: Bitcoin. Digital Assets. Digital Marketplace. Intellectual Property Protection. Intellectual Property. Dickinson Wright on:. Sign Up Log in.

IP protection for blockchain

With the advent and swift growth of bitcoin and other cryptocurrencies including Ethereum, Ripple, Litecoin, and Monero, to name a few , new legal issues in these innovative and disruptive areas are surfacing every day. We help our clients navigate and blaze a trail in the blockchain industry. At Meyers Roman, we work closely with clients to understand their objectives and to craft a path that helps them achieve those goals. Should a dispute arise, you can rely on our highly experienced team of litigators with proven success in securing favorable verdicts for both plaintiffs and defendants. Our extensive experience in blockchain technology and cryptocurrency spans across a variety of both current and emerging technologies, including hardware and equipment design; software, website and application development and policies; digital currency and more.

Home» Resources» IP Law Essentials. Blockchain and cryptocurrency technologies are rapidly expanding throughout the world – and with that.

Cryptocurrency and the value of trade marks

Drawing on experience that stretches back to the beginning of blockchain and digital currency, our lawyers find creative solutions that help clients minimize risk while realizing their goals. Our clients include developers of application layer technologies and native protocols, stable coin issuers, cryptocurrency issuers, traders, exchanges, trading platforms, miners, investors and service providers. Our long track record of working with blockchain and other emerging technologies allows us to provide efficient, actionable advice as clients pursue the untapped possibilities of blockchain technology, from innovative financing structures—such as token generation events, bespoke security tokens and conventional venture financing structures that integrate token exposure—to applications beyond cryptocurrency. We tailor approaches that comply with state, federal and international regulations by drawing on our deep understanding of blockchain technology and of the enforcement priorities of key regulators. Starting in the early days of bitcoin, our lawyers built a record of avoiding excessive risk while still being flexible and creative enough to embrace disruptive business plans and help companies achieve their objectives. Soon after bitcoin launched, our lawyers represented companies handling some of the highest volume of bitcoin transactions and also represented the company that pioneered the first application for blockchain. We continue to lead as the industry develops: Fenwick is a member of the Global Legal Blockchain Consortium, a group working to develop governing standards for the use of blockchain in the business of law. Clients benefit from a deep bench of lawyers with regulatory, corporate, tax, intellectual property, cybersecurity, privacy and litigation experience, as well as familiarity with cutting edge blockchain technology: in short, a team that can counsel both startups and mature companies on any issue that arises when innovating in this complex space. Clients value the fact that we work as their partners. We listen to their goals and then commit to finding a path forward that successfully navigates the risks that come with working in such a dynamic sphere.

The Future of Blockchain in Intellectual Property

cryptocurrency intellectual property

Cryptocurrency was first invented in with the release of Bitcoin, the first public digital currency characterized by decentralized control, user anonymity, and verification that includes record-keeping using network technology and blockchain ledgers. Although cryptocurrency started as a means of providing peer-to-peer transactions, larger companies, such as banks and credit card companies, have utilized cryptocurrency for investment, operations, and transactional purposes. Improvements to the technology have enabled real-time and secure transfers, risk mitigation, and enhanced security protocols and regulation. The surge of these disruptive technologies has led to a flurry of issued patents.

Interest in cryptocurrency and the blockchain technology behind it has soared since the launch of bitcoin. However, as with any new and evolving area of law and regulation, cryptocurrency litigation risk is high.

The Blockchain & Cryptocurrency Law Firm

Blockchain technology has the potential to transform the way that business is done. In the financial services industry, blockchains can dramatically reduce transaction costs and processing times. Securities can be tokenized and registered on blockchains, as now permitted in Delaware, allowing for increased liquidity, quicker settlement, more effective stockholder democracy and reduced transaction fees. While Bitcoin may be the best known cryptocurrency, there are over 1, cryptocurrencies available for purchase and trade. Ripple is being used by hundreds of financial institutions as they attempt to transform how individuals and businesses transfer money within a given country and across borders. Other cryptocurrencies have been developed to address privacy and anonymity concerns.

What are the copyright implications of NFTs?

Writing last September, she probably did not expect to find the answer by auctioning her picture as a non-fungible token NFT at Christie's this year. An NFT is a secure, blockchain-based certificate that represents an entitlement its owner has to a usually digital or physical asset eg artwork or music or experience eg a backstage pass. The fundamental characteristic of an NFT is its uniqueness; in contrast to, say, a unit of a cryptocurrency which is the same as any other unit, the value of an NFT is in the blockchain-powered recognition that it uniquely represents the asset it attaches to. The scarcity of each token has led to them becoming the latest craze in the digital media and entertainment space and generating significant value for those that create and sell or 'mint' them. While understanding their uniqueness is key to understanding the value of NFTs, so understanding what it means to own an NFT, and what IP rights NFTs engage, is key to understanding how their advertising, sale and acquisition can operate. Get it wrong, and the minter of the NFT will be causing a range of intellectual property, advertising and consumer protection problems for themselves.

Buying cryptocurrencies: Lots of people approach me asking for advice on how and Workshop - "Blockchain Technologies and their application in the IP.

The Intersection of Cryptocurrency and Intellectual Property Law

Why it matters: With headline news ranging from J. As with any new industry, over the past five years there has been a rapid increase of applications for blockchain- and cryptocurrency-related patents filed with the U. Patent and Trademark Office by entrepreneurs and financial institutions alike looking to monetize some part of this technology.

NFTs – a question of ownership

RELATED VIDEO: ED1 Group 3 Presentation Cryptocurrency Intellectual Property and Innovation

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy. Dan and Frank also discuss potential applications for blockchain technology and what technologists working in this groundbreaking space need to consider when deciding how to protect their innovations. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

September 14

Current Hurdles in Cryptocurrency and Intellectual Property

But luckily, this is changing with blockchain. Blockchain is the system that makes Bitcoin work. But more importantly, it is giving creative people effective ways to protect their IP rights like never before. When you create just about anything—be it a song that is recorded, a piece of writing, a photograph—you own it. At least, that is what the letter of the law says. If you were an inventor, you could go to the patent office for protection, but as a creative, there is no designated way for you to legitimize your ownership of your work prior to its publication. And with the advent of the internet, the challenges associated with copyright protection have become larger.

Blockchain, Smart Contracts and Cryptocurrencies

Blockchain, cryptocurrency, artificial intelligence and other recent and evolving technologies are the next step in automation and efficiency, and therefore are disrupting business norms. Blockchains are distributed and immutable digital platforms of transactions and records, and are expected to revolutionize countless industries over the next decade. Companies seeking to employ or exploit blockchain, data mining and interpretation or other cutting-edge technologies require sophisticated legal counsel like Lathrop GPM, with proven experience in the myriad legal issues related to the application of these complex and evolving technologies. Drawing upon years of experience in cryptocurrency, cybersecurity, intellectual property, complex business transactions, data privacy and related fields, our multi-disciplinary team of technology attorneys at Lathrop GPM helps clients identify and navigate the legal landscape, so they can realize the potential benefits of such technologies and reach their ultimate business objectives.

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