An NFT, a non-fungible token, is a blockchain-based digital certificate of authenticity. It confirms that you own the 'original' of a digital file, but it does not automatically transfer copyright or any other intellectual property right in the underlying work.
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In the MetaBirkins case, Mason Rothschild created and sold NFTs depicting virtual bags inspired by Hermès’s Birkin bag. The U.S. court held that those NFTs infringed Hermès’s trademark rights and design protection, despite Rothschild’s artistic arguments.
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NFTs can generate several types of IP conflict: unauthorised use of trademarks or designs in the tokenised work, unauthorised reproduction of copyright-protected works, and confusion as to origin or association with a brand.
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Creators, purchasers and NFT platforms should therefore examine carefully: what rights does the NFT sale contract transfer? Who owns the right to reproduce, distribute or publicly display the digital work? In the absence of explicit clauses, the legal risk is significant.