Intellectual Property Doesn’t Fit Well With Web3 Decentralization — Lawyers


Intellectual Property Rights (IP) will continue to be a growing area of ​​tension within Web3 and NFTs, as IP rights often rely on a single “identifiable entity”, while Web3 is more often decentralized.

David Kappos, a partner at Cravath, Swaine & Moore LLP, told TNZT that IP is traditionally “owned by an identifiable entity, which necessarily makes it centralized from a legal standpoint.”

Kappos suggested that the tension between IP and decentralization has no clear solution, asking “how does a DAO really own the IP of the protocol it is supposed to manage?”

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In the past year, there have been several lawsuits against NFT projects that are alleged to infringe IP, copyrights and trademarks.

When asked about third parties creating digital artworks or branded wearables, Kappos suggested that “An unlicensed implementer in a Web3 environment should refrain from creating a wearable that is confusingly similar to a brand owned by a third party – the same as in the real world.”

One such example is digital artist Mason Rothschild who is being sued by French luxury group Hermès for creating ‘Metabirkins’, an NFT collection inspired by the group’s famous Birkin bags.

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In August, NFT firm Yuga Labs released a new IP rights agreement for its CryptoPunks and Meebit collection, allowing all CryptoPunk and Meetbits holders to use their NFTs for commercial or personal purposes.

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Nathanael Lim, co-founder of Web3 media start-up Avium, said this was a positive move for users, but the real change is that the market will notice more IP rights.

In August, venture capital firm Andreessen Horowitz (A16z) announced a set of six licenses aligned to NFTs based on the Creative Commons license. Lim suggests that these are mainly improvements to the Creative Commons licenses released twenty years ago, and helped clear up some of the confusion people had about the licenses by updating the more relevant parts, but more innovation needs to take place within the space.

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Both Lim and Kappos were speakers at IP Week @ SG 2022, a global conference hosted by the Intellectual Property Office of Singapore (IPOS).