Attorneys discussed how brands that offered non-fungible tokens could navigate intellectual property and other legal challenges at INTA’s Annual Meeting in Washington DC today.
Sara Maroun, senior lawyer at media conglomerate MBC Group in the UAE, said there were several considerations for companies when they decided to release NFTs, which she herself had to ponder when her company released 9,999 tokens based on its Fananees characters last month.
She noted that there shouldn’t be any transfer of IP rights to the NFT owner, and that it should be very clear to the buyer what he or she purchased. Brands should also make sure to select high-quality marketplaces and avoid those beset with infringements or bad reputations.
Maroun noted that it was also important to be aware of the lack of regulation governing NFTs, and that this situation could change soon. Brands should have contingency plans to help them comply with any new regulations that might be passed, she said.
She noted that a virtual asset regulation was being drafted in the UAE, although it wasn’t clear whether NFTs would be regulated by the bill. The team had to take this uncertainty into account when drafting their NFT contracts in April.
“Lawyers should be mindful that there are no black and white answers to a lot of legal issues at the moment. We as lawyers have to be creative and have conversations with the business about its long-term strategy so we can account for it.”
Ayala Deutsch, deputy general counsel at NBA Properties in New York, agreed that it was important for brands to be creative and flexible as they adapted to NFT challenges.
“Every time you do something, you learn whether it’s the right thing to do and whether circumstances have changed, so keep your eyes and ears open and learn as you go. The templates you have aren’t going to work perfectly,” she said.
Protection and enforcement
Speakers also said companies should consider applying for trademark rights related to NFT offerings.
Nerissa McGinn, partner at Loeb & Loeb in Chicago, who moderated the panel, noted that NFTs were now part of the US trademark identification manual.
But brands shouldn’t go overboard, said the speakers.
Deutsch said her business ran into the issue of how many trademarks to apply for when it launched its NFT programme.
She said she received some semi-hysterical calls from business people who expected that the company would have to file an enormous number of trademark applications because it had a lot of brands and had a presence in a lot of countries.
But she told her colleagues that the business was already well protected and should be more strategic about applying for registrations, rather than simply apply for thousands of marks.
Speakers also discussed how brands could enforce IP in the NFT space, though noted that such a task wouldn’t be easy.
Deutsch said there was a website that had the look and feel of an authorised authentic NBA NFT offering and yet was fake. Her team shut it down, but it turned out there was an incredibly sophisticated actor behind it.
“We’re in a constant game of whack-a-mole chasing down what I think are 18 variations of the website now,” she said.
Maroun at MBC Group added that it was also important for her company to monitor what NFT buyers were doing with the characters purchased. She noted that it could be a problem if they were creating t-shirts with the NFT characters because the terms of sale wouldn’t allow for such action.
The INTA Annual Meeting is being held this week at the Walter E Washington Convention Center in Washington DC.
