The United States Patent and Trademark Office (USPTO) and the U.S. Copyright Office have conducted a thorough 112-page study at the request of former Democratic Senator Patrick Joseph Leahy and Democratic Senator Thom Tillis. The study aimed to address concerns related to copyright and trademark infringement in relation to non-fungible tokens (NFTs).
After holding three public roundtables and gathering input from stakeholders, the study concluded that existing intellectual property laws adequately handle the issues surrounding NFTs. While trademark misappropriation and infringement are common on NFT platforms, most stakeholders agreed that it would be premature to introduce specific legislation targeting NFTs, as it could impede the technology’s ongoing development.
Although the study affirms the sufficiency of current laws, the regulation of NFTs in the United States remains unclear. Notably, in August 2023, the U.S. Securities and Exchange Commission (SEC) took action against California-based media company Impact Theory, marking the first enforcement action related to NFTs by U.S. regulators. The SEC classified Impact Theory’s sale of NFT offerings and promises of investor profits as securities. However, this case did not establish a blanket categorization of all NFTs as securities.
The study also identified a significant challenge in enforcing trademark registrations for physical goods against the use of those marks on digital goods associated with NFTs. This lack of clear legal precedent complicates enforcement efforts and underscores the evolving nature of intellectual property issues related to NFTs.
Despite these regulatory challenges, the adoption of NFTs continues to grow, with notable figures like former President Donald Trump entering the space and successfully selling out their NFT collections. However, concerns raised by technology industry associations regarding trademark misappropriation and the exploitation of consumers’ personal information highlight the ongoing risks associated with NFT platforms.