Do NFTs have legal protection?



NFTs (Non Fungible Tokens) are digital assets created with blockchain technology that have the property of being unique and private, so they cannot be divided, exchanged, or exchanged for something else of equal value (such as currency, whether physical or bitcoin) And since blockchains are normally verifiable through the Ethereum network, they cannot be destroyed, destroyed, or reproduced.

The content of NFTs may have no relation to the physical world and may be completely original or respond to the digitization of something pre-existing in the offline world, such as paintings, stamps or works of art in the broadest sense of the word. This is the case of what are considered the best goals of football player Leonel Messi, immortalized in the collection “Messi Universe”, which consists of four works created by Australian artist Bosslogic (“King piece”, “Value”, “Weight”, “Man from the future” and ” Impossible briefing“).

And given that these NFTs can be valued in the millions, the question arises that the Legal System’s protection of these assets is not limited to the realm of art. As a matter of fact, the explosion of metaverses and NFTs as a result of the campaigns launched by brands such as Adidas, Nike, Balenciaga, Gucci, Burberry, Louis Vuitton or Zara had a great impact in terms of Fashion Law. It is supposed to release its third “phygital” collection called “Y2K Creatures” in September 2022.

But this can also be the cause of conflicts. NFTs It is made by a third party, not by the rightful owner, as with the “MetaBirkins” NFTs, inspired by the famous bags of the French company Hermès, which sued its creator Mason Rothschild for understanding in January 2022. Violating your rights by owning a registered trademark. Rothschild’s sale of more than 100 NFTs worth one million dollars in a private market (OpenSea) claims that these are not replicas of their bags, but designs inspired by them. Under the First Amendment to the United States Constitution.

The content of NFTs may have no relation to the physical world and may be completely original or may respond to the digitization of something pre-existing in the offline world.

In the case of Spanish regulations, this action may violate article 34 of Law 17/2001 of 7 December on Trademarks, which gives the trademark owner the exclusive right to use the trademark. Exactly one of the questions raised regarding the legal protection of NFTs is how the trademark should be registered and which class it corresponds to in the Nice Classification.

Well, this dilemma was resolved with key recommendations issued by the European Union Intellectual Property Office in July 2022, which stipulate that NFTs should be registered in class 9 of the Nice Classification when synchronized with digital content and images. When the 12th Edition of the Nice Classification is published, in order for explicit reference to the term “downloadable digital file verified by non-public tokens” in the aforementioned class 9, it must indicate that the request is an NFT. ”.

In addition, if the original bags are considered counterfeit, it can constitute a crime against intellectual property set out in the Criminal Code, punishable by a prison sentence of 6 months to 4 years and a fine of 12 years. A person who reproduces, plagiarizes, distributes, publicly or economically transmits a work in whole or in part (article 270-1), as well as in the provision of services to the community, for up to 24 months information, in an active and non-impartial manner and only through a technical transaction, facilitates the Internet without limiting it by access or location on it (article 270-2).

Regarding crypto art, the question was raised about the importance of the support that the artworks embody, as a result of the scandal that arose in September 2022 when it was learned that the millionaire Martín had been killed on July 30, 2022. Mobarak would burn a $10 million drawing of famous Mexican artist Frida Kahlo’s “Ominous Ghosts” (1944) in Miami, convert it to 10,000 private NFTs and sell each unit for three ETH (Ethreum cryptocurrency). worth 1,416 euros), it expects to get more than 42m euros with it.

Despite the purported purpose of this action “to promote Frida’s work to the meta-universe and to support her strong image to unite a community of collectors, creators and art lovers,” Mexico’s National Institute of Fine Arts and Letters (INBAL) is investigating. Alleged destruction of an original work because the Federal Monuments and Archaeological, Artistic, and Historic Sites Act declared all of Frida Kahlo’s work, including her easel work, graphic work, engravings, and documents, to be an artistic monument. or by real persons as published in the Federation Official Gazette dated 18 July 1984.

If a similar event occurs in Spain, the provisions of Article 323 of the Penal Code shall apply, regardless of the cause, which imposes a prison sentence of 6 months to 3 years or a fine of 12 months to 24 months. damage to property of historical, artistic, scientific, cultural or monumental value; to impose the highest penalty in degrees in cases where particularly serious damage is done or affected to property of particular historical, artistic, scientific, cultural or monumental value.

by Javier López, partner Ecija

#NFTs #legal #protection

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