The lack of harmonisation at a European level in the field of intellectual property could hamper the development of the market for non-fungible tokens (NFTs), according to a European Parliament study that was published on Tuesday 15 November.
Commissioned by the Committee on Legal Affairs, this study aims to provide an overview of intellectual property rights and distributed ledger technology, with a focus on NFTs of works of art.
NFTs, which are digital assets issued by a blockchain, offer many possibilities: giving digital artworks a uniqueness and therefore a value, providing new exploitation opportunities for artists, and fully automating resale royalties for secondary sales.
However, the trade of NFTs on marketplaces entails classic massive copyright infringement risks associated with any marketplace.
There are therefore grey areas in the legislation, but the study suggests that a harmonised approach could foster the growth of NFT-related businesses in the EU. Distributed ledger technology could create further opportunities in the areas of intellectual property rights management and combating piracy.
To support distributed ledger technology applications, the intellectual property law regime is not primarily the key, but rather the legal regime related to banking regulation, tax regulation or, more specifically, regulations that deal with crypto-assets.
Recently adopted, the ‘MiCA’ regulation that provides a framework for the European crypto-asset market lays down that NFTs will not be traded or exchanged at equivalence, like cryptocurrencies, and will also be exempt from the scope of EU law (see EUROPE 13040/35).
To consult the study: https://aeur.eu/f/452 (Original version in French by Anne Damiani)