April 18, 2024

Treating NFTs as another form of cryptocurrency would be a mistake, as it overlooks the individual intellectual property rights that NFTs embody. Therefore, NFT laws must prioritize IP laws to ensure creators and owners of NFTs are properly protected and compensated for their work while preventing infringement and theft of digital assets.

In addition, we must understand the significance of NFTs as a new digital ownership and investment form and develop laws and regulations that reflect this unique nature.

Intellectual Property Laws and NFTs

Diana Stern, a lawyer at Palm NFT, emphasizes the importance of intellectual property laws concerning NFTs. According to her, the United States patent laws state that intellectual property is a significant part of the country’s economy, as companies that heavily rely on IP laws make up more than 40% of the economy.

In addition, the total IP value in America is estimated to be over 6 trillion USD. Stern highlights that NFTs, as a new form of digital ownership and investment, must be protected under IP laws to ensure that creators and owners are properly compensated for their work.

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This aspect is especially important given the high value of NFTs in the current market and the potential for future growth. Stern believes that proper regulations and laws prioritizing IP rights will benefit creators and owners and contribute to the overall growth and stability of the NFT ecosystem.

How to Go About Enforcement with NFTs

Enforcing intellectual property rights for NFTs can be a complex process, but there are several ways to protect and enforce IP rights in the NFT ecosystem. Therefore, it’s important for platforms, marketplaces, and intermediaries that facilitate the buying and selling of NFTs to take steps to prevent infringement and protect IP rights.

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These steps include implementing robust anti-piracy measures, conducting regular IP rights audits, and supporting creators to take legal action against infringers.

Smart Contracts

According to industry experts, smart contracts are one of the most promising ways to enforce IP rights for NFTs. Smart contracts are self-executing digital contracts that can be programmed to enforce certain rules and conditions automatically.

In the context of NFTs, smart contracts can automatically check for plagiarism or infringement and take appropriate actions if any violations are detected. For instance, a smart contract could be programmed to disable an NFT that is found to be infringing on someone else’s IP rights or to redirect royalties to the rightful owner.

This feature allows for real-time enforcement of IP rights and can help to prevent the sale of infringing NFTs. Further, smart contracts can also be used to automate the process of licensing and royalties, allowing creators to monetize their NFTs while still protecting their IP rights easily.

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This automation can be done by embedding royalty payments directly into the smart contract, automatically distributing royalties to the creator every time the NFT is sold.


Another way to enforce IP rights for NFTs is through digital fingerprints or watermarks. These unique identifiers can be embedded into the NFT during the creation process and can be used to identify the original creator and prevent unauthorized duplication or infringement.

Digital fingerprints or watermarks can be based on various types of data, such as metadata, hash values, or even the device’s physical characteristics used to create the NFT.

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