A comprehensive study, spanning 112 pages, that was commissioned by former Democratic Senator Patrick Joseph Leahy and Democratic Senator Thom Tillis, has determined that current intellectual property laws effectively address concerns regarding copyright and trademark infringement associated with non-fungible tokens (NFTs). The United States Patent and Trademark Office (USPTO) and the U.S. Copyright Office conducted the study.
The study reached its conclusions after conducting three public roundtables and gathering input from stakeholders. Most participants agreed that existing intellectual property laws are sufficient to handle issues related to NFTs. While acknowledging instances of trademark misappropriation and infringement on NFT platforms, stakeholders generally believed that it would be premature to introduce specific legislation targeting NFTs, as it could impede the ongoing development of the technology.
Although the study affirms the adequacy of current laws, the regulation of NFTs in the United States has been unclear. In August 2023, Impact Theory, a California-based media company, settled charges brought by the U.S. Securities and Exchange Commission (SEC) in what was the first NFT-related enforcement action by U.S. regulators. The SEC classified Impact Theory’s sale of NFT offerings and promises of investor profits as securities. However, this case did not establish a blanket categorization of all NFTs as securities.
The study also highlighted a key challenge, which is the lack of controlling judicial precedent when it comes to enforcing trademark registrations for physical goods against the use of those marks on digital goods associated with NFTs. This legal ambiguity complicates enforcement efforts and emphasizes the evolving nature of intellectual property issues related to NFTs.
Despite the regulatory challenges, the adoption of NFTs continues to grow, with notable figures like former President Donald Trump entering the space and successfully selling out their NFT collections. However, technology industry associations have raised concerns about trademark misappropriation and the exploitation of consumers’ personal information, highlighting the ongoing risks associated with NFT platforms.
