When you buy a non-fungible token (NFT), what do you actually have? This investigation has done a ton in NFT space since non-fungible resources recently exploded into the general public. Individuals have been baffled by the multi-million dollar sales of works by Grimes and Beeple. Since anyone could without an extended view or download with a right click, it was not clear to many what buyers of these tokens were actually getting. Then, at that point, cases of the disappearance of NFTs came in: tokenized images that would get attractive aggregates, likely to evaporate when their capacity privileges on the joined servers expired.

Intellectual property remains an ambiguous subject in the world of NFT
When most people think of an NFT, they can think of a digital image, video clip, or sound clip. But while each NFT can be associated with a medium, the medium itself is not the NFT. In reality, each token consists of a few lines of code written in a blockchain. This code contains a series of conditional rights granted to the holder – most often, the right to transfer ownership of the token.

Since then, many more tokenized images, sounds and videos have sold for millions of dollars, and the NFT market continues to grow. But the answer to the question remains unclear: What do people own after buying an NFT? Are they buying a digital file containing media? Are they buying full intellectual property (IP) rights? The rights to see or display an image? The right to simply own the collector’s item? Or is the purchase nothing more than the abstract concept of “ownership” recorded on a blockchain? Perhaps more importantly, how can the creators of NFT clearly and effectively manage what they are selling?

Unless stated otherwise, this right is the only thing that someone actually has when purchasing a DTV. Therefore, when you view an NFT on its original blockchain, you will find the token ID and transaction records. You’ll also find a link in the smart contract that points to its metadata, which may include information about where the media associated with the token is hosted. What you can’t find, however, is information as to whether the token represents other rights related to its associated media. You will also not be able to determine how these rights are technically related to the token.

As the case was ultimately resolved, the incident reopened an important conversation about intellectual property in the NFT space. There is still no clear precedent as to who owns the IP of an NFT. Is it the original creator or the current owner? And how does intellectual property ownership change when an NFT is split or when its ownership passes through multiple hands? How to manage these property rights over time?

Punks and Phunks
Beliefs and practices about who owns what in the world of NFT tend to be ambiguous at best. This was demonstrated in July, when the owner of a CryptoPunk from Larva Labs successfully submitted a withdrawal request to the NFT OpenSea Marketplace on a CryptoPhunk from Lava Labs. This decision created confusion. Initially, it was not clear whether or not the owner of the NFT owned the intellectual property rights to the Punk, and therefore whether he had the right to demand the removal of the Phunk.

The reality is that there is no intrinsic mechanism to manage intellectual property in NFTs.

Intellectual property rights may be included in the sale of a TVN. But this raises follow-up questions and logistical challenges that need to be addressed. The ‘bridges’ linking NFTs to intellectual property rights can indeed be the starting point that the industry needs, especially as we collectively work to create a globally standardized legal infrastructure for NFTs – but what is needed is a standard for the deployment of the intellectual property contained in these assets. .

The liquidity of creativity
NFTs can unlock the future of the designer economy. They can allow capital to flow at the speed of creativity and provide an efficient way for creators to be paid for their work. But the liquidity of this creative NFT-based economy is constrained by the lack of an effective tool to manage intellectual property rights, a problem that stifles the flow of value and creativity across the space. Therefore, an intellectual property rights management solution that moves as quickly and securely as NFTs must be in place in order to realize the full potential of the non-fungible token economy. The NFT universe needs a property rights management platform that people can use to flexibly manage the flow of intellectual property to, from and around NFTs, starting with derivative rights. Once this standard is established, we can use smart contracts to split, combine, remix, and create derivatives of intellectual property rights. For example, a creator could use smart contracts to divide the commercial rights and non-commercial rights of a medium into two NFTs; they could divide commercial intellectual property rights over several NFTs, issue derivative rights, bundle different types of intellectual property rights, etc.

Suppose the owner of a TVN related to a short film wants to grant a temporary license to their work for use in an exhibition. Without an efficient means of transferring rights, intellectual property owners are forced to go through a tedious process of printing, signing, scanning and sending documents. But with a smart contract-based rights management layer enabled, the person who owns the tokenized movie IP could instantly authorize the use of the video and set fine parameters for the license terms. They could figure out how and when the film could be released, and how much money would have to be paid to the owner of the intellectual property each time it was released. An efficient and intelligent contract-based property rights management system would also create unprecedented economic opportunities beyond the creative sector. Intellectual property rights are not the only types of property privileges that could be deployed. People who own real estate could, for example, allow the use of a property for a certain period of time by certain people. Smart contracts could be used to license and manage property rights in the automotive industry, construction, medical, etc. – the possibilities are practically limitless.

The NFT space needs blockchain-based tools that enable the management and personalization of intellectual property rights related to tokens as quickly as those tokens are created, bought and sold. This Web 3.0 technology needs a Web 3.0 solution: an IP ownership transfer mechanism that flows as fast as ideas, a system that evolves at the speed of creativity.

Summary of the news:

• Why NFTs Need an IP Chain Management System
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