Partners Mauricio Uribe and Jonathan Menkes Discuss IP’s Impact on NFTs in the World IP Review article "The NFTs Clause: Are Licensors Waking Up To Digital Use?”
Knobbe Martens partners Mauricio Uribe and Jonathan Menkes were quoted by World IP Review in the article "The NFTs Clause: Are Licensors Waking Up To Digital Use?” The article addresses key questions regarding licensing disputes involving non-fungible tokens (NFTs).
In the article, Uribe discusses the Tarantino v. Miramax case that failed to yield much-anticipated answers. Uribe says the dispute “highlights the dilemma when each party focuses on different definitions in the existing agreement referring to disputed ‘new’ technology.” He added, “Without explicit coverage for NFTs, this became a battle of terms with different outcomes—a contract nightmare. This case was being closely watched as there are likely thousands, or more, of contracts for films made with similar clauses. The settlement means that we will not receive greater guidance/resolution.”
Uribe also discusses smart contracts, where “NFTs are minted through digitized contracts that assign ownership and reassign it, alongside IP rights.” He said this is “one of the unique aspects of the Bored Ape NFTs in which the full set of copyright rights are part of the NFTs”.
Menkes discusses why companies should consider a separate licensing arrangement, saying, “The Seth Green case underlines why companies should still consider a separate licensing arrangement instead of a full transfer of ownership of the NFT and the underlying IP is the challenges that can arise with enforcement.” He explained, “If the NFT contains artwork and that NFT and all IP rights are transferred to the NFT purchaser, the original owner may have little recourse in stopping unauthorized third party uses of that artwork without the assistance and cooperation of the NFT purchaser…Indeed, it may be very difficult to obtain the true identity of the NFT purchaser in the first place and even if they are known, they may not have the financial ability or interest in pursuing a lawsuit against these third parties.”
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