Web3 Breakdowns Ep 71 - Jessica Neer McDonald - An IP Lawyer on NFTs and AI
Primer: What are some of the more prominent lawsuits in the Web3 space today? What can we learn from them? What are the differences between trademark and copyright? Let’s find out from Jessica Neer McDonald in this episode of Web3 Breakdowns.
Background
Has practised intellectual property law for the past 8 years
Has worked with creatives and entrepreneurs who were pushing boundaries
Attracted to intellectual property law
Realized that NFTs have brought IP law, software, and other industries together
Current Head of Global Trademark Services for Midjourney
The Lawsuit Over The Digital Hermès/Birkin Bag
Mason Rothschild was the defendant
He created digital images of the famous Hermès bag and sold them as NFTs in late 2021
Hermès filed a trademark lawsuit against Rothschild for his MetaBirkins collection
Rothschild argued that he was not using it as a trademark and that his collection is a piece of art
Rothschild argued that he is protected under the First Amendment
There was a trial in New York and the jury was in favour of Hermès and said that the First Amendment protection did not apply
There was trademark infringement, cybersquatting, and damages of ~$133,000
Where Is The Line Drawn Regarding Using A Brand?
Difficult line to draw since the discussion is about trademarks and source identifiers
In the case of MetaBirkins VS Birkins:
Birkins had not had any virtual goods offering under their brand
They had to rely on their rights from selling the physical bag
In 2021/2022, there was a giant rush of trademark applications
A lot of big brands did not have a plan. People made defensive filings trying to get ahead of this
Trademarks and copyright fall under different types of rights under IP law
When it relates to Andy Warhol and Tom Sachs, there are discussions about fair use and being able to use the work of others in their work
On Fair Use
Can use the Rogers Test to analyze brand use and artistic works
The test is first used to identify whether is it an artistic piece
The Rogers Test is trying to define the boundaries and protect free speech under the First Amendment
The Yuga Labs And Ryder Ripps Case
Yuga Labs was the plaintiff and own the Bored Apes Yacht Club (BAYC) trademarks
The defendants argued that certain characteristics of the project had racist or alt-right imagery
The defendants created another NFT collection with the exact same images pointing to the BAYC collection
The defendants sold their collection through a website that also contains criticisms against Yuga Labs and BAYC
Yuga did not bring a copyright claim but a trademark claim
Yuga Labs distributed commercial rights to their holders, with holders coming up with various commercialized usage
The defendants tried to poke holes in the licensing rights (e.g. did they refer to trademarks?)
The court stated that the terms and conditions were focused on copyright
Sueing Others Who Commercialize Bored Ape
Yuga Labs is the owner of the copyright. Holders are just given permission
This does not mean that you can enforce that copyright against someone else
You need a copyright registration to bring a lawsuit for copyright infringement
Yuga Labs does not have any copyright registrations
The Various Types Of Licensing
CC0 is a form of Creative Commons licensing
It’s by an international non-profit called Creative Commons and has traditionally been used outside the NFT space
Copyright is usually the life of the author plus 70 years
Once it expires, it goes into the public domain
A number of meme NFT collections have decided to release their artwork into the public domain
Some other projects let you own the NFT without any rights to the copyright
After A Copyright Expires
Caution has to be exercised here
Have to be sure of what exactly has been released in the public domain
For example, the Winnie the Pooh story may still be under copyright
Starting to see people using older versions of Mickey Mouse
Nike And StockX
StockX sells used products
StockX is using the blockchain
As StockX use the Nike trademarks, Nike claimed that they were intentionally deceiving customers to believe that Nike is approving of this activity
Ended up with Nike doing some experimenting with StockX’s program
Nike found out that some of the Nike shoes that were being sold were knock-offs
The case is still pending
Miramax Lawsuit Against Quentin Tarantino
It is related to a contract from the 1990s and Tarantino did have some rights to it
There was a possibility in the contract to allow him to take the pages from Pulp Fiction and turn them into NFTs
The case was ultimately settled and kept confidential
On AI Art
The Copyright Office held a listening session where they had artists, attorneys, and technologists speaking about these current issues
There are a couple of lawsuits going on right now
People are trying to challenge how the source data is being trained on
These generators are becoming more accessible to the public
IP Over The Next 6 Months/Years
Next 6 months: The opinion from the Supreme Court regarding fair use (on the copyright side) and the Rogers test (on the trademark side)
Next 6 years: Want to see what’s going to be the new norm in licensing and to what extent blockchain technology might play in it
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