The Great Bored Ape NFT Theft Saga that temporarily derailed actor-producer Seth Green’s plan to cast his cartoon simian (BAYC #8398) in an animated series appears to have ended peacefully now that Green has agreed to pay nearly $300,000 for the safe return of the purloined primate. Why, exactly, the NFT’s adopted owner, DarkWing84, agreed to sell after rejecting previous offers is unclear. But the animated series project, presumably, can now proceed. While good news for Seth Green, the ape’s return does not really resolve the questions discussed here in a previous post concerning the relationship between NFTs and the IP rights associated with the assets to which they’re bound.
As noted, the terms & conditions of the transaction by which Green originally acquired BAYC token #8398 purport to provide the purchaser with “an unlimited, worldwide license to use, copy, and display the purchased Art for the purpose of creating derivative works based upon the Art (‘Commercial Use’).” It’s not clear whether DarkWing knew he or she was purchasing stolen property when buying token #8398 from a legitimate NFT marketplace, but either way the transaction raised but didn’t answer the question of whether the unlimited commercial use license originally obtained by Green was part of the deal. That is, did Green lose his license when he lost his ape?
That question has now caught the eyes of Sens. Patrick Leahy (D-VT) and Thom TIllis (R-NC), respectively the chair and ranking member of the IP Subcommittee of the Senate Judiciary Committee. The pair sent a joint letter last week to the heads of the U.S. Patent & Trademark Office and the U.S. Copyright Office asking that the two agencies conduct a join study into the IP implications of NFTs.
“NFTs can be found in nearly all spheres – from academia to entertainment to medicine, art, and beyond,” the senators write. “Thus, it is imperative that we understand how NFTs fit into the world of intellectual property rights – as said rights stand today and as they may evolve as we move into the future.”
While the letter doesn’t mention the Seth Green case specifically, it clearly top of mind, based on the questions they want addressed:
[W]e request that your two agencies undertake a joint study to address the following list of non-exclusive considerations. We invite you to further build upon this list.
(1) What are the current applications of NFTs and their respective IP and IP-related challenges?
(2) What potential future applications of NFTs do you foresee and what are their respective potential IP challenges?
(3) For current and potential future applications of NFTs:
- How do transfers of rights apply? How does transfer of an NFT impact the IP rights in the associated asset?
- How do licensing rights apply? Can and how can IP rights in the associated asset be licensed in an NFT context?
The letter also asks whether and how NFTs could be used to manage and protect IP rights, and how existing statutory protections such as the Digital Millennium Copyright Act apply to NFTs.
Obviously, policymakers are just beginning to grapple with these questions, and there is a long road ahead before any legislation or rulemaking is likely to bring legal clarity to those questions. But Leahy and Tillis have not shied from pursuing answers to many of the IP questions raised by rapidly evolving digital and crypto technology.
Together they are principal authors and co-sponsors of the SMART Copyright Act, which among other things would empower the Copyright Office to designate specific technical protection measures (TPMs) that digital service providers would be required to implement. They also tag-teamed the CASE Act, which created the Copyright Claims Board that went live this week to begin adjudicating small copyright claims.
Leahy is retiring after the current term, but Tillis is sticking around. And, if the Republicans take back the majority, he is likely to assume the chairman’s gavel. There is almost certainly more to come when it comes to copyright and NFTs.