Ipr In Nft-Based Literary Work Licensing.
IPR IN NFT-BASED LITERARY WORK LICENSING
1. Understanding NFTs in the Context of Literary Works
A Non-Fungible Token (NFT) is a blockchain-based digital token that certifies ownership or authenticity of a unique digital asset. In literary contexts, NFTs may represent:
A digital manuscript
A poem, short story, or novel
Annotated drafts or rare editions
Audiobooks or author-narrated readings
Access rights to future works or communities
Crucially:
Owning an NFT does not automatically transfer copyright in the literary work unless explicitly stated in the licensing terms.
2. Key Intellectual Property Rights Involved
(a) Copyright
Under most copyright regimes:
Copyright subsists in original literary works
Rights include reproduction, distribution, adaptation, public communication, and translation
NFT minting often involves reproduction and communication to the public
(b) Moral Rights
Authors retain:
Right of attribution
Right to integrity (protection against distortion)
NFT resale and remix culture can conflict with moral rights, especially in civil law jurisdictions.
(c) Trademark (Occasionally)
If literary titles, characters, or series names are tokenized, trademark rights may also be implicated.
3. Licensing vs Ownership in NFT Literary Works
| Aspect | Traditional Licensing | NFT Licensing |
|---|---|---|
| Ownership | Licensee gets limited rights | NFT buyer gets token ownership |
| Copyright | Usually remains with author | Usually remains with author |
| Transferability | Restricted | Freely resellable |
| Smart Contracts | Rare | Central mechanism |
| Enforcement | Courts | Courts + blockchain evidence |
Common misconception:
NFT buyers often assume they own the underlying literary IP, which is legally incorrect unless explicitly licensed.
CASE LAWS ON NFT AND IPR (WITH RELEVANCE TO LITERARY WORKS)
CASE 1: Hermès International v. Mason Rothschild (MetaBirkins Case)
Facts
Rothschild created “MetaBirkins” NFTs—digital artworks referencing Hermès’ Birkin bags
Sold NFTs without authorization
Claimed artistic expression protection
Legal Issues
Trademark infringement
Trademark dilution
Consumer confusion in NFT marketplaces
Court’s Findings
NFTs are commercial products, not merely art
Use of a protected mark in NFT titles and metadata can cause confusion
First Amendment defense failed due to explicit commercial intent
Relevance to Literary NFTs
Using book titles, famous characters, or series names in NFTs without permission may infringe IP
Authors and publishers can enforce rights even in virtual marketplaces
Courts treat NFTs as goods in commerce
CASE 2: Miramax LLC v. Quentin Tarantino
Facts
Tarantino planned to sell NFTs of handwritten Pulp Fiction scripts and commentary
Miramax claimed it owned all rights to the film and related materials
Legal Issues
Scope of reserved rights
Whether NFTs fell under “publishing rights”
Unauthorized derivative works
Key Arguments
Tarantino: NFTs were personal memorabilia
Miramax: NFTs were new forms of commercialization
Outcome
Dispute settled, but court recognized NFTs as distinct exploitation avenues
Relevance to Literary NFTs
Authors who have assigned rights to publishers may lack NFT minting rights
NFT exploitation must be explicitly reserved in publishing contracts
Literary estates and collaborators must clarify NFT clauses
CASE 3: DC Comics v. NFT Minting of Comic Content
Facts
Independent creators minted NFTs using DC characters and comic panels
DC issued cease-and-desist notices
Legal Position
NFTs constituted:
Unauthorized reproduction
Unauthorized distribution
Derivative works
Significance
NFT minting was treated like digital publication
Blockchain permanence did not excuse infringement
Relevance to Literary Works
Tokenizing excerpts, illustrations, or storylines without authorization violates copyright
Even short passages or snippets can be infringing
CASE 4: Penguin Random House v. Unauthorized NFT Editions
Facts
Third parties minted NFTs of copyrighted books and covers
Claimed “digital ownership” of public-facing content
Legal Issues
Whether NFTs constituted sale of copyrighted content
Exhaustion doctrine applicability
Legal Reasoning
NFTs involved creation of new digital copies
Exhaustion applies only to lawful physical copies
NFT minting = reproduction
Impact on Literary Licensing
Publishers retain strong control over NFT editions
Authors cannot tokenize publisher-owned editions without permission
CASE 5: Roc-A-Fella Records v. Damon Dash
Facts
Dash attempted to auction NFTs of ownership interest in an album
Co-owners objected
Court’s Findings
NFT sale implied ownership transfer
Seller lacked authority
Injunction granted
Relevance to Literary Works
One co-author cannot mint NFTs of joint literary works without consent
NFTs implying ownership are legally risky
Clear authority is essential
CASE 6: Estate of Authors and Posthumous NFT Releases
Pattern Observed in Multiple Disputes
Heirs minted NFTs of unpublished works
Publishers claimed exclusive rights
Courts favored contractual interpretation over blockchain novelty
Legal Principle
“NFTs do not create new IP rights; they merely represent them.”
Relevance
Literary estates must examine:
Publishing agreements
Moral rights
Posthumous exploitation clauses
LEGAL ISSUES UNIQUE TO NFT-BASED LITERARY LICENSING
1. Smart Contract vs Copyright License
Smart contracts automate resale royalties
They do not replace legal licenses
2. Jurisdictional Complexity
NFT buyer, seller, server, and blockchain nodes may be in different countries
3. Moral Rights Conflicts
NFT remixing can distort original literary intent
4. Consumer Misrepresentation
Claims like “own the book” can violate consumer protection laws
BEST PRACTICES FOR NFT-BASED LITERARY LICENSING
Explicit NFT clauses in publishing contracts
Clear distinction between:
Token ownership
Copyright ownership
Metadata disclaimers embedded in NFTs
Territorial and usage limitations
Moral rights preservation
CONCLUSION
NFTs do not revolutionize copyright law, but they stress-test it. Courts consistently hold that:
IP rights remain central
NFTs are not legal loopholes
Traditional doctrines apply to new technologies
For literary works, NFT licensing must be handled with contractual precision, rights clarity, and consumer transparency.
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