IP Rights in Blockchain and Digital Assets

NFT lawsuits involving content creators, celebrity endorsers, content distributors, businesses, and startups are becoming more frequent as the debate about who owns the underlying asset’s copyright and who has the authority to create an NFT becomes more contentious, and as digital assets grow in popularity and desirability.

On one side of the argument, those who purchase, or license intellectual property content believe they also have the right to profit from it by creating digital assets. The opposing IP creator viewpoint contends that, unless expressly stated otherwise in the contract, the purchaser and/or licensor does not have the right to create and sell blockchain and digital assets such as NFTs.

Miramax vs Tarantino

Recently, a high-profile case involving Miramax and Academy award winning writer-filmmaker Quentin Tarantino that might have established a precedent regarding the right to create and exploit NFTs based on motion picture screenplays was confidentially settled before trial.

Miramax, which owns the film distribution rights to Tarantino’s 1994 hit film “Pulp Fiction,” filed a lawsuit against Tarantino in November 2021 after Quentin Tarantino announced his intention to auction seven “exclusive scenes” from his original hand-written “Pulp Fiction” script as NFTs. Miramax asserted Tarantino lacked the authority to create and exploit such NFTs because Miramax held all digital asset rights.

Quentin Tarantino claimed that the retained print publication rights of the copyright interest in his “Pulp Fiction” screenplay included the right to create and sell “Pulp Fiction” screenplay-based NFTs, because NFTs are a novel way for him to republish his screenplay in a previously unavailable digital publication format. At the time of Mr. Tarantino’s screenplay contract with Miramax, NFTs did not exist and consequently the contract did not specifically address NFTs.

Protecting IP Rights as Technology Evolves

The Internet and handheld wireless devices have evolved into primary platforms for the distribution, re-purposing, and commercial exploitation of all types of entertainment and media content. As a result, whenever a new method to use old content is discovered, creators, writers, performers, owners, and producers of both new and existing material may have their rights and financial interests compromised. Creators must be vigilant in protecting their content rights across all media including

o Internet applications, handheld wireless devices, and cell phones (e.g., Apple iPhone/iPad applications, ringtones, etc.)

o Video games and broadband interactive gaming

o CGI graphics, and animated or live-action HD or 3D productions

o Internet, new media and transmedia marketing and advertising

o Electronic publishing and the development of digital libraries and catalogues

o Blockchain and digital assets, such as NFT’s

Safeguard Your Intellectual Property Rights

Literary material option/purchase agreements between creators and third parties must expressly address and confirm whether retained IP content publication rights include blockchain and digital assets such as NFTs. If IP content owners/creators want to avoid major disputes and fully protect themselves, they should hire a lawyer who specializes in documenting and negotiating IP content license agreements and option/purchase agreements.

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Brian J. Murphy

Entertainment, Intellectual Property, Internet, New Media and Sports Law Group.