NFTs and Copyright Protection: An Analysis of Intellectual Property Law

This essay analyzes the intellectual property law and its applicability to NFTs and copyright protection. It discusses the unique nature of NFTs, their popularity, and the challenges in protecting them. The essay also explores the role of smart contracts and legal considerations for buyers and artists.

INTELLECTUAL
PROPERTY LAW
1

TABLE OF CONTENTS
ESSAY.................................................................................................................................................3
REFERNECES...................................................................................................................................11

ESSAY
The intellectual property law is considered with the laws which are used to protect the rights of
owners or creator of any invention, design, writing etc. which is unique. There are different areas
of intellectual property which are patents, trademarks, trade secrets etc. which helps in protecting
these creations or inventions of people. The current essay explains about NFTs and the copyright
protection which is required by them in order to stay safe. The type of copyright protection
which is appropriate for NFTs is also discussed in this essay.
Non-fungible tokens (NFTs) are assets which are cryptographic that are listed on a block
chain with special metadata and codes of identification that are helpful for distinguishing them
from each other. They are considered as digital files that are minted as unique entities which is
represented as a digital certificate ensuring a single copy of that NFT exists in the market.1 These
are considered as specific aspects which have a major influence on the population which
motivates to deal with them properly. An NFT is different from a cryptocurrency and cannot be
exchanged or traded at an equal value which is different from the fungible tokens (FTs) like
cryptocurrency. FTs are similar to each other and are suitable for getting exchanged for any
successful commercial transaction. This differentiates them from each other which has a major
influence on the overall trading practices that are undertaken in the market.
NFTs are helpful for representing actual objects like real estate and artwork on highly
popular platforms which are used by a large audience. The tokenization of these NFTs has made
it beneficial for the users to buy and sell them appropriately without much consideration about
fraud. This is useful for motivating creators to produce new and attractive artworks for which
they are provided with a value.2 This value is not fixed and can provide unimaginable returns to a
1 Valeonti, Foteini, Antonis Bikakis, Melissa Terras, Chris Speed, Andrew Hudson-Smith,
and Konstantinos Chalkias. "Crypto collectibles, museum funding and OpenGLAM:
challenges, opportunities and the potential of Non-Fungible Tokens (NFTs)." Applied
Sciences 11, no. 21 (2021): 9931.
2 Rehman, Wajiha, Hijab e Zainab, Jaweria Imran, and Narmeen Zakaria Bawany. "Nfts:
Applications and challenges." In 2021 22nd International Arab Conference on
Information Technology (ACIT), pp. 1-7. IEEE, 2021.
3

creator which is based on the level of response which is received by them in the market. NFTs
represent the individual right of a person overall a creation or invention which is unique. They
have become popular in the current generation as people are highly interested in trading these
NFTs for money and leisure.
NFT provides appropriate protection for creators to trade their art due to which they are
very convenient in the market. NFT artworks doesn't need to be protected under the Copyright
Act 1968, as due to the services which are provided by the block chain guidelines. Protection of
NFT is highly important as people having been finding ways of stealing art consistently as it is a
medium to earn a lot of capital but copyright is not the suitable option for this aspect.3 Risks are
high when the NFTs are listed at public platforms which can encourage hackers to steal the
creations and make a significant profit out of it.
Australian population has an increased interest in trading with NFTs which is found over
a time period. The decisions of people towards the purchase and sale of the non-fungible tokens
has been appropriate in order to grow and achieve better advantage in the industry. The
Australian crypto environment is highly motivating their people to deal in these tokens in order
to gain better profits and generate suitable results in the industry. The NFT culture is a
representation of the significance of a particular block chain, culture and art that represents
details about something which is important for people to buy. This may have a significant
influence on the overall success of the creators to protect their creations and gain better
advantage in the business environment significantly.
The copyright act doesn't have any such consideration of the NFTs which provides
appropriate support for protecting the rights of these creations. NFT's operate in a separate space
which has unique rules and regulations and has a different overview of these aspects in the
industry. The Australian laws have developed a suitable aspect for the people trading in NFTs to
have a different overall view of their activities in the industry.4 No such regards are developed in
this concept and lesser security for the NFTs is provided in the Intellectual property law which is
essential for reducing their overall performance in the industry.
3 Aharon, David Y., and Ender Demir. "NFTs and asset class spillovers: Lessons from the
period around the COVID-19 pandemic." Finance Research Letters 47 (2022): 102515.
4 Chohan, Raeesah, and Jeannette Paschen. "What marketers need to know about non-
fungible tokens (NFTs)." Business Horizons (2021).

A significant market share has been captured by NFTs in the global business environment
and many people are continuously focussing on developing these practices. This may have a
significant impact on the overall success of these aspects in the industry. These aspects are may
have a major influence on the sale and purchase of these NFTs in the environment which has a
significant impact on the overall success of the business in the industry. Special mechanisms
have been dedicated towards the overall achievement of the NFTs in the potential market of
Australia.5 This may have a crucial influence on the overall development of the business
environment which is generated around the NFTs in the Australian environment. People are
making good money by increasing their profits and generating good income with the help of
these factors that are important for the overall development of these businesses in the industry.
5 Yousaf, Imran, and Larisa Yarovaya. "Static and dynamic connectedness between NFTs,
Defi and other assets: Portfolio implication." Global Finance Journal 53 (2022): 100719.
5

There are several reasons because of which there is a possibility that 'no' is the correct
and the appropriate answer in this situation. One of the major reasons is only because a particular
item is minted as NFT it does not precisely mean that it will for sure be protected by a copyright
too. There is no such claim that is made6. Copyright particularly protects the original musical,
dramatic, literary as well as artistic works, and also the sound and the film recordings in
particular. In Australia, anything that is to be protected by a copyright must specifically have a
human creator in particular. This is necessary and relevant. Many of the items that are linked to
the NFTs are generated randomly through the computers with only a little amount of human
input in particular. Therefore, this is considered to be a very crucial area of law which is still in
the process of development and there is no clarity yet regarding the ways in which these
generative artworks in particular will be treated by the copyright law. As it is not totally clear
and precise no such statement can be considered to be true which is related to the compulsion of
the protection of the NFTs by the copyright.
Smart contracts effects totally depend on the situation and the factors affecting the
situation in particular. Because of the reason that the smart contracts work automatically, the
concept does not particularly focus on relying on the courts or the law for the purpose of
enforcing them. Whenever, there is an occurrence of an event, such as the re-sale of NFT, the
technology enforces the smart contracts automatically, like by making a re- sale royalty payment
to the artist. But rather than that a smart contract is also considered to be a contract that is legally
binding because as per Australian law the contracts do not necessarily need to be in written form.
It is the choice of the artist to choose for the smart contracts at the time of minting the NFT and
further listing it for the sale. Purchasers of the NFT are then required to agree to those particular
terms at the time of purchasing that specific NFT in particular.
If an individual is planning or desiring to mint, sell or even buy an NFT, some factors and
aspects should be considered and evaluated to get the best out of it, these are as follows. Firstly,
evaluation of the terms of the services of the online marketplace because prior evaluation will
help in better understanding and also allow to analyse the risks if any. Secondly, the reviewing of
6
Papaioannou, Thanasis G.,. "A Blockchain-based, Semantically-enriched Software
Framework for Trustworthy Decentralized Applications."

the options that are particularly selected for the purpose of the smart contract, this is because
smart contract is a relevant part of the overall procedure7 . These specific terms will also allow in
determination of the obligations and the rights related to NFT. The arts' law can also support the
individual in better understanding of the smart contract's terms of service through the document
review service.
There is other reason as well for not implementing the copyright security for NFT artwork
because of authenticity, as NFT’s tends to be an authentic record which states who can own the
asset most probably a transaction history. But most of the platforms generally not verifies the
user identity as who are minting NFTs that simply means that it is more complex to analyse if an
NFT is legitimate or not 8. A person who immaculate the NFT might using right in copyright
rights where they are not generally provided with. It is a damaging to artists whose work is put of
sell as NFT without their consent, but somehow it is also distressful for the buyer who thinks that
they are buying authentic product without knowing the fact that owner of such is also not aware
of selling of their product. Similarly, absenteeism of authenticity also gives disadvantages to
indigenous artists particularly, where users tries to sell out the NFT for not real indigenous
artwork which is not originally developed by real aboriginal and Torres islander artist. There is
some legal consideration which the buyers as well as artist have which are looking for the service
terms where online market sector for NFTs involves safeguarding precautions regarding terms of
services. For an example some of the market place needed a user to agreed that they are not
disobeying the copyright of anyone else when casting NFTS and ensures to have online form for
applying some complaints 9. Other legal assumption is for websites that is working in Australia
and USA, copyright law implemented to forward the takedown information to internet service
7 Ranaweera, and et.al. "Haptic information and consumer brand impressions." In 20th
Australian and New Zealand Marketing Academy Conference, p. 201. 2018.
8 Herian, Robert and et.al . "NFT–Legal Token Classification." EU Blockchain
Observatory & Forum, 2021.
9 Mao, Chris. "Imperfect Digital Certificates of Provenance-A Categorical Risk-Based
Approach to Non-Fungible Tokens (NFTs)." Available at SSRN 4060436 (2022).
7

provider who operates the website and they further requested that infringing situation is taken
down.
There are other legal petitions as well like put forwarding and breach of Australian
Customer law 10which aims to safeguard the artists and consumers from any fraud or dodgy NFT
sales. It might applicable when person generally don’t have any rights regarding selling of NFT
work or when NFT is inaccurately marketed as work of indigenous artist. Therefore, online
marketplace for the NFTs is might allow for de listing the items which infringes the rights of
people, so it helps in restricting some event and also put prohibition to appear within
marketplace.11 But it does not eliminate the NFT from block chain because once it is being
developed then it cannot be modified or discarded 12. In some instances, it is also evaluating that
NFT holder do not have rights to do work as because it encompasses the offered under the
copyright law like right for communication to public, such situation is similar when buying a
physical collectable. Owing a painting do not ultimately give the right to show it publically.
Purchaser need to be transparent regarding their purchasing for NFT, they need to connect their
buying with speculative investment and pleasure to buy something unique from the artist. Until
the terms and regulations allows it, purchaser have limited ability to forward the creative work in
marketplace.
From the above essay, it has been concluded that the NFTs are unique creations which are
highly popular in the digital space having a major influence on the overall performance of these
creations in the industry. It is found that intellectual property law is not suitable in the case of
NFTs due to the authenticity which is absent in these creations. This has been a negative factor
due to which is the copyright protection of NFTs is neglected. The unfavourable environment
has been considered as a major factor which is having major influence on the protection of these
NFTs in the industry.
10 Scott, Colin. "Enforcing consumer protection laws." In Handbook of Research on
International Consumer Law, Second Edition, pp. 466-490. Edward Elgar Publishing,
2018.
11
12 5
Raimondi, Franco, Ian McMillan, and Patrick Malone. "Non-Fungible Tokens:
Accessible Investment for All, or a Bubble?." (2022).

9

REFERNECES
Books and journals
Aharon, David Y., and Ender Demir. "NFTs and asset class spillovers: Lessons from the period
around the COVID-19 pandemic." Finance Research Letters 47 (2022): 102515.
Chohan, Raeesah, and Jeannette Paschen. "What marketers need to know about non-fungible
tokens (NFTs)." Business Horizons (2021).
Consumer Law, Second Edition, pp. 466-490. Edward Elgar Publishing, 2018.
Herian, Robert, Claudia Di Bernardino, Andres Chomczyk Penedo, Joshua Ellul, Agata Ferreira,
Axel von Goldbeck, Alireza Siadat, and Nina-Luisa Siedler. "NFT–Legal Token
Classification." EU Blockchain Observatory & Forum, 2021.
Mao, Chris. "Imperfect Digital Certificates of Provenance-A Categorical Risk-Based Approach
to Non-Fungible Tokens (NFTs)." Available at SSRN 4060436 (2022).
Papaioannou, Thanasis G., Petar Kochovski, Klevis Shkembi, Caroline Barelle, Anthony
Simonet-Boulogne, Marco Ciaramella, Alberto Ciaramella, and Vlado Stankovski. "A
Blockchain-based, Semantically-enriched Software Framework for Trustworthy
Decentralized Applications."
Raimondi, Franco, Ian McMillan, and Patrick Malone. "Non-Fungible Tokens: Accessible
Investment for All, or a Bubble?." (2022).
Ranaweera, Achini, Brett Martin, and Hyun Seung Jin. "Haptic information and consumer brand
impressions." In 20th Australian and New Zealand Marketing Academy Conference, p.
201. 2018.
Rehman, Wajiha, Hijab e Zainab, Jaweria Imran, and Narmeen Zakaria Bawany. "Nfts:
Applications and challenges." In 2021 22nd International Arab Conference on
Information Technology (ACIT), pp. 1-7. IEEE, 2021.
Scott, Colin. "Enforcing consumer protection laws." In Handbook of Research on International
Valeonti, Foteini, Antonis Bikakis, Melissa Terras, Chris Speed, Andrew Hudson-Smith, and
Konstantinos Chalkias. "Crypto collectibles, museum funding and OpenGLAM:
challenges, opportunities and the potential of Non-Fungible Tokens (NFTs)." Applied
Sciences 11, no. 21 (2021): 9931.
Yousaf, Imran, and Larisa Yarovaya. "Static and dynamic connectedness between NFTs, Defi
and other assets: Portfolio implication." Global Finance Journal 53 (2022): 100719.