Authors: Vasundhara Shankar and Mudit Kaushik
NFTs or Non-fungible tokens are units of data stored in the form of a digital ledger, recorded on a blockchain that represents files like videos, audios, photos, or any other type of digital file. These tokens signify a person’s digital assets that are not interchangeable and hence unique. These collections are one of a kind, and their popularity has significantly risen. Many motion artists and graphic designers have been gaining popularity through these tokens since small but worthy artists who didn’t have a platform to financially value their art before, have the help of NFTs now. Recently, a digital artist “Beeple” sold an NFT artwork for more than USD 69 million at Christie’s Auction House. This is just one example from the pool of many news articles ranging from memes to sports cards to tweets. In fact, this popularity has drawn the attention of investors, who are readily available to back this form of technology, financially. Recently, a news article revealed that Dibbs, an app allowing users to trade interests in sports cards, raised USD 2.8 million through seed funding. The Indian blockchain ecosystem has also been evolving to accommodate this technology, with three new NFT marketplaces opening up in the country in less than two months.
Ownership and Uses of NFTs
Digital art, music, and images are all artistic works under the Copyright Act. NFTs are essentially signed receipts on a blockchain, acknowledging that the holder owns a unique version of the said work. This gives rise to the debate around NFTs and Copyright Act, asking the question as to who owns the copyright to a unique artistic work after the NFT is sold. However, since the technology is very new, the discussions on how NFTs would be linked to copyright are still at dawn. When a person purchases an NFT, he holds a right to claim exclusive and non-rivalrous ownership of that token. NFT is an intangible and incorporeal property with a unique signature. Therefore, the question is, when a unique asset is transferred with its ownership, would the owner of a token be entitled to the ownership of that digital asset, the underlying artwork, or any other object? The general assumption to this question is that ownership of an NFT does not, by default, grant the buyer any rights to the intellectual property of the underlying asset. The Copyright Act, 1957 states that for original artistic work, the person who created such work is the owner, unless he agrees explicitly to withhold his ownership via the exceptions provided in section 17 of the Act.