NFTs and Intellectual Property: Pioneering Digital Rights Management

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  • NFT technology has pioneered improved intellectual property management.
  • Although NFTs can be traced back to concepts like Colored Coins and Rare Pepes, it was the launch of CryptoKitties in 2017 that captured global attention.
  • NFT in intellectual property management involves the digital encoding of rights associated with patents, copyrights, and trademarks onto a decentralized ledger system.

Web3 has significantly evolved since the emergence of Bitcoin in 2009, becoming a cornerstone of the fourth industrial revolution. This transformation has seen innovators, developers, entrepreneurs, and investors expand the boundaries of decentralization.

Among these advancements, NFT (Non-Fungible Token) technology has surpassed the original expectations of its developers. Initially, NFTs revolutionized the art industry by offering wider markets, improved compensation, and advanced tools for artists to realize their visions.

Today, NFTs are redefining digital content creation through the lens of digital ownership, influencing Web3 games, music, and merchandise. Recently, NFT technology has pioneered improved intellectual property management.

The appeal of unique identifiers has spurred discussions around patent tokenizations as the industry leans towards a digital-first approach. This article explores how NFTs’ digital ownership introduces new perspectives on ownership across previously untapped sectors.

NFT Technology Achieves Digital Ownership

NFTs, like other Web3 pillars, rely on blockchain development, smart contracts, and decentralization. Although NFTs can be traced back to concepts like Colored Coins and Rare Pepes, it was the launch of CryptoKitties in 2017 that captured global attention.

Blockchain technology enables NFTs to provide and secure virtual ownership with a tamper-proof and decentralized nature. Their cryptographic techniques and consensus algorithms ensure data integrity is immutable, only alterable with network majority consent.

Also, Read From Polygon to Avalanche: Sports Illustrated Tickets; Bold Move in NFT Ticketing.

Following the initial surge in NFT artwork, digital artists flocked to various NFT marketplaces. This led to innovative applications of NFT technology, notably in governmental functions. For example, Estonia integrated blockchain technology into their I-Voting system to ensure secure, hacker-resistant elections.

Yet, no application has shown more promise than in Intellectual Property Management, especially as the world transitions to a content era.

What is Intellectual Property and its Relation to Digital Content?

According to the World Intellectual Property Organization, the term Intellectual Property (IP) refers to “creations of the mind, such as inventions; literary and artistic works; designs and symbols; names; images used in commerce.” Initially, IP rights exist to protect the brilliant ideas and concepts of innovators, preventing murky disputes regarding privacy and copyright issues.

IP rights are patents, copyright laws, and trademarks. Patent Laws apply to inventions with some time of public utility; copyright laws apply to literary and artistic works like books and music, while trademark laws are associated with businesses and involve “marking” the goods and services, distinguishing them from competitors.

Intellectual Property management has safeguarded millions of literature, inventions, and artworks throughout history, but a radical need for change emerged. Currently, the world is shifting towards a digital-focused future, and information is within arm’s reach of any individual, literally.

NFT technology has opened new opportunities for digital content creators, despite the ongoing adaptation of blockchain technology in intellectual property management.[Photo/Medium]

It’s common to hear individuals preferring e-books, Google, and ChatGPT to find information, courses, or entertainment to hardcopy magazines, books, or even visiting the local library.

This rising need led to an unexpected job creation; content creation. Social Media platforms, streaming sites, and websites like are the go-to source of information. Many leading and dominating the sector have leveraged content creation to acquire attention and find ways to monetize it, generating a new stream of income.

The rapid rise of this trend forced many IP management sectors to update their current laws to accommodate this new form of intellectual property. Unfortunately, Web2 failed to find ways to secure an individual’s creations, leading to massive losses in piracy, information leaks, and loss in revenue. NFT technology did what many thought impossible, broadening new ways of monetizing and new ways of marketing.

NFT Overhauling IP Management

It was only a matter of time before the milestones of NFT caught the attention of IP organizations. Digital ownership solved a problem Web2 failed at, allowing creators to track their creations directly, profiting from the revenue generated without the hustle of third-party entities.

NFT in intellectual property management involves the digital encoding of rights associated with patents, copyrights, and trademarks onto a decentralized ledger system. Its immutable nature unequivocally certifies ownership and provenance, providing clear-cut boundaries on who owns it and who stole it.

According to the article; Demystifying NFTs and Intellectual Property, author Elizabeth Ferrill indicated that NFTs may be subject to IP protection since once minted or sold, the underlying smart contracts automatically transfer the ownership, displaying it throughout the entire network.

Also, Read Cristiano Ronaldo NFTs Stand Strong Amid Legal Challenges: Binance Fulfills Promises.

Thus, like any other project acquiring an IP license, NFTs fall under two main categories. The first is Personal licensing, whereby an NFT creator doesn’t explicitly apply for or outline an IP license. This generally means that the creator should not assume their IP rights, despite having an immutable name tag, the NFT can still exist for personal use only.

The second and more common aspect is commercial licensing. This allows the creator to delegate some rights to the buyer while still retaining some level of ownership and control over its IP license.

For instance, Yuga Labs purchased the CryptoPunks and Meebits NFT collections shortly after releasing the full commercial rights to NFT holders. This allowed them some control over their characters in commercial and personal projects. In some aspects, the buyer can pay royalties to the original creator of the NFT.

How NFT Improves IP Management

Aside from NFTs being subject to IP regulations in some scenarios, the technology can improve the sector if applied correctly. Below are a few use cases on how NFT technology can improve intellectual property management amid this Digital Content Era.

Patent Tokenization

By converting patents into NFTs, it allows organizations to streamline the process of acquiring licenses. Organizations can leverage the automation involved during the transfer of ownership to simplify the management of patent portfolios.

For instance, IBM and IPwe are aiming to represent patents as NFTs on a blockchain. Doing so improves the speed of acquiring patents and bolsters its security via its immutable nature.

Introducing Copyrights in Digital Artworks

Despite many claims, cries, and concerns, the fact of the matter remains; the art world will eventually fully embrace NFTs. Armed with these facts, creators often rely on digital ownership as a pseudo-copyright law, preventing any claims on their creations.

This, however, does not mean their creation is officially recognized by such laws. By introducing copyright laws through the power of NFT technology, creators can create a solid sense of reassurance. In addition, it also ensures artists can receive their royalties when necessary.

Trademark Protection

Unlike copyright and patent laws, integrating NFT technology within trademark laws has posed quite a hassle. Many questions arise given the limitations of the technology when dealing with the specific criteria trademarks often demand.

Nonetheless, it has inspired many to venture into the unknown waters to seek ways to integrate both concepts. For instance, the Aura Blockchain Consortium (LVMH, Prada, and Cartier) aims to combat counterfeits in the luxury goods markets.

Despite not directly applying NFTs in the trademark system, Aura’s blockchain-based approach to verifying authenticity closely implements the concept. In the future, many innovators can build upon their founding work to integrate digital ownership within trademark laws.

Wrapping Up

NFT technology has opened new opportunities for content creators, despite the ongoing adaptation of blockchain technology in intellectual property management.

As with many Web3 innovations, integrating NFTs into IP management may take time, but its impact is inevitable, marking another milestone in the evolution of digital rights management.


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Ken Mutuku
Ken Mutuku
Your Guide to the Future of Tech, Web3, and Digital Storytelling. With a keen eye for detail and a knack for concise communication, Ken Mutuku is your go-to professional for decoding the next wave of technological evolution. Whether through captivating videos, insightful articles, or engaging presentations, he masterfully crafts messages that deeply resonate with his audience, setting him apart in the digital landscape.