How Intellectual Property Laws Apply to NFTs

Intellectual property law doesn’t often change. Instead, as the world around us evolves, the long-standing laws are applied in new ways. Right now, IP laws are being applied in new ways once again as the “Non-Fungible Token” (NFT) market explodes. Before we dive into how IP law applies to NFTs, it’s important to first understand what qualifies as an NFT.

What is a Non-Fungible Token

NFTs are digital assets first and foremost. While the tokens exist in the digital world, they will represent a real-world counterpart which is often art, photographs, music, and videos. NFTs are not the actual “thing” you purchased but proof that you purchased it. You can buy NFTs on various marketplaces and don’t need cryptocurrency to purchase them.

The NFT itself is specific instructions about where the actual token exists on the blockchain (a form of data storage in which the data is linked together and unchangeable). The benefits are that NFTs cannot be changed, cannot be broken up into smaller pieces, are indestructible, and are easily verified.

The intellectual property aspects of an NFT come into question frequently, however. If someone owns an NFT, it does not prevent other copies of the item from being present online and in other locations.

How do trademarks apply to NFTs?

Trademarks will mostly apply in the NFT world to the organizations and brands that frequently buy, sell, or trade them, as well as the places they are stored (called “wallets”). This means individual NFTs aren’t likely able to be trademarked but the marketplaces that allow them to be exchanged and stored are more likely to hold trademarks.

On the flip side, some have claimed their trademarks are being infringed upon by NFTs. Some NFTs incorporate trademarked items even though the person who minted the NFT does not own the trademark or have permission to use it. For instance, an NFT for artwork that someone else produced and trademarked would be an infringement. The defense against this, however, is that purchasing an NFT is not the actual item itself but a link to it. In that case, the owner of the NFT is not claiming actual ownership over the item.

How do copyrights apply to NFTs?

If an NFT is an original form of art then, like all other forms of art, the art will automatically be copyrighted and the owner will be protected. While trademarks are more likely to apply to aspects surrounding an NFT, the actual NFT is more likely to be copyrighted. That makes a copyright your most likely avenue to protecting your own NFT.

Copyright infringement will work similarly here as it did with trademarks. If your NFT represents or uses copyrighted material, you risk being exposed to a lawsuit for infringement. The argument against the lawsuit also applies: owning the NFT does not constitute a claim of actual ownership over the material represented within the NFT.


Ultimately, NFTs are an evolving marketplace many people are just now engaging with and purchasing. Intellectual property laws likely won’t need to change, and if they do it’s likely officials would just add new “verbs” to protections as they apply to NFTs specifically. Right now, intellectual property is protected against verbs like copying, distributing, and displaying. If officials determine the list needs to grow to include verbs that apply to NFTs, they will take the necessary steps to do so.

At McDermott IP Law, we have extensive experience applying for and protecting intellectual property for our clients. We want to make sure you can keep up with the evolving world. Contact us today and protect your innovation.

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