The legal aspect of Non-fungible tokens or NFTs
Non-fungible tokens or NFTs are a very common term in society nowadays. However, does everyone know about the terms completely? What is the legal aspect of Non-fungible tokens or NFTs?
Non-fungible tokens
NFT stands for Non-fungible token, which is a unit of data on a blockchain digital ledger. In a word, it is a type of digital asset present on a digital chain (blockchain). This blockchain acts as a ledger that ensures the authenticity of both the assets and the owners.
Most digital content and objects in the past are infinitely reproducible. But with NFT it is different, each asset will have a unique digital signature and therefore it is unique. Each minted NFT token has a unique identifier and belongs to a unique owner. As a digital asset, NFTs are also often traded in cryptocurrencies, but sometimes also in USD.
NFT has been and is being applied most commonly in digital content such as music, pictures, or other art content. For example, when an artist sells a painting as NFT, the buyer will have to pay and become the owner of it. Others can still see the painting, but only the buyer has official ownership.
NFT has limitless potential as it can exist in all types of digital objects: images, videos, audio, text, or even a Twitter post. NFTs can also be pieces of land in virtual world environments, a digital garment, or the right to use a proprietary cryptocurrency wallet.
As NFT assets can verify the authenticity and clear ownership, transactions are transparent. That’s why IP assets, especially artworks where authenticity is important in determining value, will have great use of this system.
NFTs in the IP world
Would you ever think that a selfie of a normal person would get millions of dollars in value?
That is exactly what happens to a computer science student from Semarang, Indonesia.
He has made more than US$1 million in January after taking a selfie almost every day for the past five years, converting them into non-fungible tokens (NFTs), and selling them in OpenSea.
The series of selfies titled “Ghozali Everyday,” composed of 933 photos, shows the university student in similar poses – sitting or standing in front of his computer with a smile on his face.
Sultan Gustaf Al Ghozali initially sold his selfies at US$3 each in OpenSea, a marketplace for NFTs. When one of his buyers, a popular chef, spread the word about “Ghozali Everyday” in his social media post, more interested collectors have come into the NFT trading platform and bought the product of Al Ghozali.
Just a short time later, more than 400 individuals had purchased his photos, raising the price of one selfie to 0.247 of the cryptocurrency ether or US$806. Some of the selfies even fetched the price of ETH 0.9 each at some point, or around US$3,000.
In January 2022, the Indonesian student had earned over US$1 million from his selfie collectors.
However, it’s clear that Ghozali doesn’t just care about the money, but also about his Intellectual Property, that is his pictures on these platforms.
In his Instagram post, Ghozali reminded the collectors to take good care of his photos and not to abuse them.
Misuse of intellectual property rights may be one of these possible abusive acts.
Expert opinions
Risti Wulansari, a partner at K&K Advocates in Jakarta stated about the problems with IP and NFTs: “With all the opportunities NFTs can provide, there is also the inevitable opportunity to misuse IP rights on NFT works. From an IP perspective, the student initially owns the copyright as the creator of his selfie portraits.”
As the copyright owner, the Indonesian student owns the right to reproduce, distribute, publicly perform and display his works in any form. Accordingly, no other parties may reproduce his photos without the consent of him, less they might have conducted a copyright infringement action.
Nonetheless, the line between NFT ownership and IP ownership is still very thin at the moment, leading to many buyers of NFTs assets being mistaken about the nature of them and what they can do and can’t do as an NFTs owner.
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– You could visit here to see 05 Legal Notes About Trademark In Indonesia – Indonesia Trademark Law
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– You can also check the Required documents of filing trademark in Indonesia
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