Non-Fungible Tokens - Transforming The Domains Of IPR And Digital Marketplace

Author: LawSphereX

Category: Technology, Cyber & Privacy

Published: 2026-08-23T20:40:51.287322+00:00

Updated: 2026-08-26T17:10:18.131+00:00

NON-FUNGIBLE TOKENS: TRANSFORMING THE

DOMAINS OF IPR AND DIGITAL MARKETPLACE

Shradha Tomar & Prakhar Sharma, SVKM’s Narsee Monjee Institute of Management Studies (NMIMS), Indore

ABSTRACT

With the continuous evolution of technology, coupled with the advent of Metaverse, the world has stepped into a new digital era. The revolution in the field of information technology has given birth to digital representations of monetary value or rights known as crypto assets. The year is 2023, and an art-cum-digital phenomenon is sweeping various nations worldwide, known as Non-Fungible Tokens or NFTs. These NFTs have now become one of the most popular forms of crypto assets. However, their distinct features have led to the emergence of new legal questions in the field of law. Legal experts have tried their best to address the deadlock created by NFTs in reference to their legal status, however, their efforts have all gone in vain due to the unique and complicated nature of NFTs, that have features of both fractional ownership and fractional property rights.

Furthermore, its conflict with Copyright Law has also given a major headache to the experts of law. Through this paper the authors aim to delve deeper into the critical issues regarding the legal status of NFTs. This paper first elaborates on NFTs, analyzing its different aspects such as the technology through which it is created, process of trading, unique features etc. , and then discusses the legal aspects of these digital entities. Furthermore, the paper looks into various arguments pertaining to the nature of an NFT, along with addressing the conflict of NFTs with the concepts of ownership and property. This paper also traces in brief the recent developments pertaining to the field of virtual digital assets that took place in India, that will enable us to emphasize upon the fact that how urgently a regulatory mechanism on digital assets is required.

At last, this paper analyzes the conflict of NFTs with intellectual property law, vis-a-vis the Indian Copyright Act, in the light of various judicial pronouncements across the globe that have attempted to resolve this enigma surrounding the NFTs. Keywords: Non-Fungible Tokens, NFT, Crypto assets, Cryptocurrency, Virtual Digital Assets, Copyright, Intellectual Property, IPR laws

INTRODUCTION

A non-fungible token or NFT can be easily defined as a crypto asset working on a blockchain

technology containing unique identifying codes and information separating them from each other1. Non fungible tokens, as their name suggests, are tokens of data that are created cryptographically for unique commodities of the real world and are stored in virtual form on a digital ledger known as blockchain. Non-fungibility of NFTs means that they can neither be exchanged nor interchanged. NFTs provide the user with the proof of ownership of a vast variety of digital forms of art like paintings, images, audio or video files which can be tracked on their respective underlying blockchains. 2 In simplest sense, NFTs are governed by smart contracts created through a process known as ‘minting’, generally purchased using cryptocurrency and are tracked using blockchain technology3.

Further, to delve deeper into the concept of NFTs, a detailed analysis of the blockchain technology assisting NFTs shall be undertaken. Blockchains can be easily understood as a database which is not controlled by anyone but anyone can create an entry in it. 4 Blockchains collectively are used to locate the details regarding ownership of bitcoins. 5 Now it can be argued that if anyone can create an entry in the blockchain, the possibility of fraud gets high. However, blockchain technology is equipped with a mathematical relationship known as hash in which a unique alphanumeric string of limited length is generated by an input. 6 A hash reveals any change or alteration of data if any part of the input is altered. A blockchain acts like a ledger. People can write a page in the ledger in order to write their

transactions. Further, the ledger can be accessed by all. However, if there's a transaction added or a new page is inserted, it could be detected, as a ledger cannot contain a page number with the same number or in case a transaction is deleted there will be a deleted page number i.e. a 1Renana Peres et al., Blockchain Meets Marketing: Opportunities, Threats, and Avenues for Future Research,

2022 INTERNATIONAL JOURNAL OF RESEARCH IN MARKETING,

https://doi.org/10.1016/j.ijresmar.2022.08.001 (last visited June 15, 2023).

2 Aadarsh Mani, A Comprehensive Study of NFTs, 9 INTERNATIONAL JOURNAL FOR RESEARCH IN

APPLIED SCIENCE AND ENGINEERING TECHNOLOGY 1656 (2021),

https://doi.org/10.22214/ijraset.2021.34017 (last visited June 15, 2023). 3 Amanda J. Sharp, Head in the BitCloud: A Discussion on the Copyrightability and Ownership Rights in Generative Digital Art and Non-Fungible Tokens, 59 SAN DIEGO L. REV. 637 (2022). 4 Joshua A. T. Fairfield, Tokenized: The Law of Non-Fungible Tokens and Unique Digital Property, 97 IND. L.J.

1261 (2022).

5 Joshua A.T. Fairfield, BitProperty, 88 S. CAL. L. REV. 805, 874 (2015).

6 JOSHUA A.T. FAIRFIELD, OWNED: PROPERTY, PRIVACY, AND THE NEW DIGITAL SERFDOM

(Cambridge University Press 2017).

missing 4 between 3 and 5. Every page is laminated and sealed and thus it can be said that a blockchain remembers state and is a secured platform. Blockchain technology enables NFTs to track a digital asset's possession. 7 The process is similar to how a barcode is used to authenticate the transactions related to sale and purchase of goods. In the same way, NFTs track the ownership and authenticity of the transactions related to purchase and sale of NFTs. 8 A data unit in a blockchain ledger is represented by NFT, whereby each NFT represents a unique interchangeable digital item. 9 On one hand where digital files such as art, video and audio items, tweets can be represented through NFTs,10 these digital files are easily reproducible in multiple numbers.

However, NFTs representing each digital file can be traced only on their underlying blockchain and hence provide the proof of ownership to the buyers. 11 LEGAL IMPLICATIONS OF NFTs : ARE NFTS A FORM OF PROPERTY? Putting it in its most layman sense, NFT can be understood as an entity arising out of tokenization of real-world assets. However, this simple definition is not enough to accommodate the unique features that are associated with NFTs. The question that has startled many legal experts is whether Non-Fungible Tokens shall be considered as property or not. Before delving deeper into the question, it is important to understand the concept of ownership. The concept of ownership too, is not an easy one to define, and has caused many perplexities to jurists and scholars across the world.

As per Austin, the meaning of ownership involves exclusive liberties enjoyed by the user, protected by the right to exclude others from participating in them. Unrestricted disposition and permanent in point of duration are other key essentials of ownership. 12 Furthermore, according to Salmond, “the ownership of a material object is to a right to the general or residuary uses of it after the deduction of all special and limited rights of use vested by way of encumbrances in other persons. ” These definitions were further elaborated by renowned jurist Anthony Maurice Honore, who listed eleven rights

7 Amanda, supra note 3

8 CRYPTO DUKEDOM, THE NFT REVOLUTION: MUSIC EDITION 7-8 (2021); see Besancia, How to

Analyze NFT Art?, NON FUNGIBLE (Jun. 13, 2023),https://nonfungible.com/news/art/art-of-nfts

9 Edd Pritchard,“NFTs represent unique digital content that are not interchangeable, CANTONREP,

https://www.cantonrep.com/story/news/2021/03/24/non-fungible-nft-token-digital-ownershipcertificates/6987626002/” (last visited Jun. 13, 2023)

10 Ryan Browne, NFTs: Why crypto art and sports collectibles are suddenly so popular, CNBC (Jun. 13,

2023),https://www.cnbc.com/2021/02/25/nfts-why-digital-art-and-sportscollectibles-are-suddenly-sopopular.html. 11 Kayleigh Barber, What is an NFT?, DIGIDAY (Jun. 13, 2023), https://digiday.com/media/wtf-is-an-nft/

12 THE NATIONAL LAW LIBRARY .. PROPERTY 105-250 (Beardsley, William W. b. 1885. et al. eds., P. F.

Collier & Son corporation 1939).

enjoyed by the energy by virtue of his ownership over a particular property. These included right to possess, right to manage, right to capital etc. 13 On examining the aforementioned vis-a-vis NFTs, it is pertinent to note that right to possession is not exclusively available to the owner in case of NFTs. The platform which mints the NFTs has certain terms and conditions, in accordance with which the creation and rights over NFTs are governed. 14 According to a paper published in Florida Law Review titled "The Property Law of Tokens15," the authors after reviewing the terms of service of eight NFT minting platforms(with seven of them appearing in several Top NFT Platforms Lists)16 made the following observations- ● Although NFT platforms disclaim any sort of control over the assets which they create, but they can block access to the created token.

Furthermore, the platform can also block access to the asset in exceptional circumstances. ● NFT does not grant any intellectual property right in underlying work. ● The terms of service do not mention a direct link between the token and the underlying asset. 17 An owner as per the concept of ownership has full and exclusive right over their property. However, it is utterly imminent that NFT platforms do exercise some sort of control over the assets, as they can restrict the access to the tokens. As a result, the said proposition leads us to the conclusion that NFTs cannot be considered as property, as they lack one of the most basic requisites of property - ownership. The question as to whether NFT can be considered as property puzzled many legal scholars and jurists. However, this question was finally answered by the English High Court in AA v

13 A. HONORÉ, Ownership, in THE NATURE AND PROCESS OF LAW: AN INTRODUCTION TO LEGAL

PHILOSOPHY 370, (Oxford University Press 1993). See (http://fs2.american.edu/dfagel/www/OwnershipSmaller.pdf).

14 Amar Gupta, NFT as Property: A Legal Analysis, LEXOLOGY (Dec. 2, 2022),

https://www.lexology.com/library/detail.aspx?g=5e0bb5ae-31c4-4624-881a-42fd8804cf92 (last visited June 15, 2023).

15 Juliet M. Moringiello & Christopher K. Odinet, The Property Law of Tokens, 2021 SSRN ELECTRONIC

JOURNAL, https://doi.org/10.2139/ssrn.3928901 (last visited June 15, 2023).

16 Compare the Top NFT Platforms of 2021, SOURCEFORGE, https://sourceforge.net/software/nft/

[https://perma.cc/MM8C-VCJM]; Anatol Antonovici, NFT Marketplaces: A Beginner’s Guide, COINDESK (July 12, 2021), https://www.coindesk.com/nft-marketplaces-a-beginners-guide [https://perma.cc/8ECB-V8J5].

17 Juliet & Christopher, supra at 15.

Persons Unknown & Ors, Re Bitcoin18, Where Bryan J. after applying the principles iterated in National Provincial Bank Ltd v Ainsworth19, held NFTs and other crypto assets including Bitcoins as 'property', as they were "definable, identifiable by third parties and capable of assumption by third parties, and they had some degree of permanence. " It is pertinent to note that the Hon'ble Court gave substantial weightage to the legal statement issued by United Kingdom Judicial Taskforce (UKJT) in November, 201920, which suggested treating NFTs as property under English law. 21 The same stand regarding the nature of NFTs is propounded by the Financial Action Task Force (FATF), an inter- governmental body that develops and promotes policies to protect the international financial system from money laundering, terror funding etc.

, in its 2022 report on virtual digital assets and virtual digital asset providers. 22 Amidst this gale of digitalisation, one thing which is common across the world is that the financial regulatory authorities across the globe unanimously agree that there is an urgent need for the regulation of virtual digital assets, especially NFTs, which are becoming popular and mainstream at an exponential rate.

NFTS AND INDIA: RECENT DEVELOPMENTS AND CURRENT LEGAL POSITION

India is world's 5th largest economy, with its ITeS & BPO services growing at a Compound Annual Growth Rate (CAGR) of 9.19%23. As an inevitable corollary, India is witnessing a sudden boom in cutting edge technologies, with virtual digital assets being one of them. Digital assets such as cryptocurrencies have been there in India for more than a decade, however, the actual controversy regarding them was ignited by the Reserve Bank of India's (RBI) 2018 circular24, which prohibited citizens to deal in digital assets, as according to RBI, they posed a serious threat to consumer protection, market integrity etc. and are largely unregulated.

18 AA v Persons Unknown & Ors., Re Bitcoin [2019] EWHC 3556 (Comm)

19 National Provincial Bank Ltd v Ainsworth, [1965] A.C.1175

20 UK Finance, https://www.ukfinance.org.uk/system/files/2023-04/Digital%20Assets%20-%20Non-

Fungible%20Tokens.pdf (last visited June 15, 2023). 21Stephen Heinemann,“Bitcoin is Property A Look at the Decision in AA v Persons Unknown, HOWARD KENNEDY, https://www.howardkennedy.com/latest/article/bitcoin-is-property-a-look-at-the-decision-in-aa-vpersons-unknown (last visited June 15, 2023).” 22 FATF,“Targeted Update on Implementation of the FATF Standards on Virtual Assets/VASPs, www.fatfgafi.org/publications/fatfrecommendations/documents/targeted-update-virtual-assets-vasps.html (last visited June 15, 2023)” 23 TECHNAVIO, IT and BPO Services Market in India by Product, End-user, and Type - Forecast and Analysis 2022-2026, SKU: IRTNTR40476, 120 (2022), https://www.technavio.com/report/it-and-bpo-services-market-inindia-industry-analysis (last visited June 15, 2023).

24 RBI Circular dated 06th April, 2018,

https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NOTI15465B741A10B0E45E896C62A9C83AB938F.PDF

However, the said order was struck down by the Hon'ble Supreme Court in Internet and Mobile Association of India vs Reserve Bank of India25, on the ground that the right to trade is a fundamental right in the Constitution, and cannot be denied on grounds other than the ones mentioned in Article 19(6)26. Trading in NFTs, a form of virtual digital assets, was also legalized by this judgment. Another notable development regarding NFTs was the Finance Act, 202227, which added the definition of virtual digital assets in Section 2(47A) of Income Tax Act,196228. The Act also introduced a new section in Income Tax Act, 1962 - Section 115BBH29, which specified the tax slab (30% in case of virtual digital assets) for virtual digital assets. However, due to their unclear legal status, the questions relating to NFT's implications under securities law, intellectual property law etc.

still remain unanswered. NFTs due to their distinct features, make it quite difficult to put them in a particular legal category. Whether they are a form of property, security, goods, copyright etc. , the Indian judiciary is yet to settle the position in the matter. Furthermore, the legislature too is yet to take a call on the fate of NFTs and digital assets in India, with the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 pending in the Parliament, that seeks to regulate digital currencies, which are essential for trading of NFTs. It is also no surprise that despite the regulatory impasse over the VDAs, the crypto asset trading business is booming at a steady pace. An example of the same is India's biggest cryptocurrency exchange WazirX witnessing a growth of 17-fold in 2021.

30 However, it is germane to mention here that these digital trading platforms and digital assets are susceptible to cybercrimes, no matter how much they boast about their robust security systems owing to blockchain technology. Unfortunately, the provisions of Information Technology Act,200031 are not sufficient to deal with such cases, and require further elaborations and amendments. As a result, it has become strictly essential to regulate this world of Digital Assets, in order to protect the citizens from any harm. 25Internet and Mobile Association of India vs Reserve Bank of India, (2020 SCC online SC 275)

26 INDIA CONST. art. 19(6).

27 Finance Act, 2022, No. 6, Acts of Parliament, 2022 (India).

28 Income Tax Act, 1961, No. 43, Acts of Parliament, 1961 (India).

29 Id.

30 Omkar Godbole, India’s Biggest Crypto Exchange Saw 17-Fold Jump in Trading Volume in 2021, COIN

DESK (Dec 16, 2021) https://www.coindesk.com/markets/2021/12/16/indian-crypto-exchange-wazirxs-tradingvolume-jumps-to-over-43b-in-2021/?outputType=amp

31 Information Technology Act, 2000, No. 21, Acts of Parliament, 2000 (India).

CONFLICT OF NFTs WITH INTELLECTUAL PROPERTY LAW : NFTs v

COPYRIGHT

The rationale behind the concept of copyright relies ardently on three crucial points i. e. , economic interest, moral interest and natural interest, subject to slight variations. Where in case of economic interest, an incentive-based approach is formulated, bestowing the creator with protection rewarding him for his creation which holds public value. 32 Moral interest considers the fact that it shall be morally appropriate to provide protection to the creation of the creators, keeping in mind the amount of labor and skill exercised by them. 33 At last, natural interest which accompanies moral interest states that every person shall be given exclusive rights over property created through his intellectual labor. 34 In order to claim protection under the copyright jurisprudence, it is essential to pass these propounded rationales.

This protection by giving copyright ownerships aims to protect the interest of the creator and its creation from being violated. NFTs redefines the perception of digital ownership by providing a brand-new paradigm for the production, collection as well as consumption of artworks. However there exist various opinions stating that NFTs promise to completely revolutionize the way unique crafts and artworks are monetized by asserting more control over copyrights35. NFTs transactions are completely differentiated from physical transfer of an artwork. In case of purchase of a physical artwork the ownership of the physical piece is also acquired by the buyer, on the other hand it is not the case with NFTs. An acquirer of NFT in most cases is neither given the ownership of the work nor the control of the copyright of the work.

36 File composed of an NFT in no manner contains the artwork itself or even its original copy. 37 However, it only contains the data indicating the location of the NFT and the written code

32 William Landes & Richard A. Posner, An Economic Analysis of Copyright Law Cyber Harvard,

https://cyber.harvard.edu/IPCoop/89land1.html (last visited Jun 5, 2023).

33 Betsy Rosenblatt, Moral Rights Basics, Berkman Klein Center,

https://cyber. harvard. edu/property/library/moralprimer. html (last visited June 15, 2023). 34BASIC NOTIONS OF COPYRIGHT AND NEIGHBORING RIGHTS, WIPO - World Intellectual Property Organization (July 23, 1998), https://www. wipo. int/edocs/mdocs/tk/en/wipo_indip_rt_98/wipo_indip_rt_98_2_add. html#:~:text=There%20are %20two%20types%20of,between%20himself%20and%20the%20work. (last visited June 15, 2023). 35Shira Ovide, NFTs Are Neither Miracles nor Scams (Published 2021), The New York Times (Mar. 26, 2021), https://www. nytimes. com/2021/03/26/technology/nftshype. html#:~:text=A%20nonfungible%20token,%20or%20NFT,if%20you%20buy%20a%20sculpture. (last visited June 15, 2023). 36 Baiyang Xiao, Copyright law and non-fungible tokens: experience from China, International Journal of Law and Information Technology (2023), https://doi. org/10. 1093/ijlit/eaad007 (last visited June 15, 2023).

37Guest Column: Tarantino vs. Miramax — Behind the NFT ‘Pulp Fiction’ Case, and Who Holds the Advantage, The Hollywood Reporter, https://www. google. com/amp/s/www. hollywoodreporter. com/business/digital/tarantino-miramax-pulp-fictionnft-1235052378/amp/ (last visited June 15, 2023).

which executes commands in line with the preset conditions. 38 The ownership of an NFT does not in any way be associated with the ownership of the actual asset. This distinction is important as whether the owner of the NFT procures the actual ownership or not depends upon the conditions which have been predetermined in the smart contract. It can be concluded that NFTs are the underlying codes which are used to prove the existence as well as non-fungibility of an asset and no property rights associated with the underlying asset will be transferred to the owner of its NFT. NFTs AND THE INDIAN COPYRIGHT ACT, 1957 The Copyright Act, 1957 has been inculcated with a vision to recognize the rights of a copyright owner, considering the economic, moral as well as natural interest of the person.

The biggest reason why this law gives the owners the rights associated with their work is to prevent any kind of infringement which might result as a barrier in the progress of arts, and in order to facilitate the intellectual enrichment of the public. 39 The act has been made in consonance with the advancements made in the field of intellectual property; it has been amended various times in order to meet various national and international requirements. A basic perusal of the Section 2(y) of the Copyright Act40 provides that a copyright can be derived from a work which includes literary, dramatic, musical and art works,41 including both cinematography as well as sound recordings. 42 NFTs are nothing but a literary, musical or an art work engraved in a blockchain and hence the question of copyright becomes of utmost importance.

43 As per Section 14 of the Copyright Act, the creators are conferred with the authorization of reproduction, communication, adaptation as well as the translation of the copyrighted work. 44 Now the important questions here which arise are whether the rights provided under Section

14 provides the creator with the right to mint NFTs as well? Can separate NFTs be created of

38 NFTs and the Museum Part 2: Legal Issues for Acquisitions, LACMA UNFRAMED,

https://unframed.lacma.org/2021/08/30/nfts-and-museum-part-2-legal-issues-acquisitions (last visited June 15, 2023).

39 University of Oxford v. Rameshwari Photo Copy Services, 2016 SCC Online Del 5128, ¶80 (India).

40 The Copyright Act, 1957, § 2(y), No. 14, Acts of Parliament, 1957, (India).

41 Gramophone Company of India Ltd. v. Birendra Bahadur Pandey & Ors, 1984 AIR SC 667; Entertainment

Network (India) Limited v. Super Casette Industries Limited, 2009 AIR SC 1150. 42 The World Of NFT: Non Fungible Token, SOLULAB, https://www.solulab.com/the-worldofnft/#:~:text=Players%20can%20also%20create%20 and,currency%2C%20on%20a%20secondary%20market. (last visited Jun. 13, 2023) 43Jaideep Reddy et al., The status and future of NFTs and crypto art in India, The Economic Times, https://www.google.com/amp/s/m.economictimes.com/tech/catalysts/the-status-and-future-of-nfts-and-cryptoart-in-india/amp_articleshow/81970883.cms (last visited June 15, 2023).

44 The Copyright Act, 1957, §14, No. 14, Acts of Parliament, 1957, (India).

the same artwork? There is a common perception worldwide among the crypto enthusiasts that once you own an NFT of a particular artifact you own the work itself. 45 However, this argument is completely inaccurate. Transfer of the intellectual property rights of the property does not take place by selling of the NFT of the underlying property. Buying an NFT of a painting doesn't give you the rights to create adaptations or distribute copies of the painting; the underlying copyright of the property is only transferred with the sale of an NFT, if the creator itself authorizes such transfer declaring their intention. 46 Such authorization will be provided by the creator in the terms of the smart contract.

If such a declaration is not mentioned in the smart contract, then the buyer of the NFT shall be entitled only with the ownership of the NFT and nothing more and hence cannot take pictures of the underlying art work and make copies of it for further distribution in the market. Such distribution will then lead to copyright infringement. THE TAKE OF JUDICIARY ACROSS THE GLOBE: NFTs and INTELLECTUAL

PROPERTY RIGHTS

There have been several cases where the sale of NFTs have resulted in the violation of the intellectual property rights of the creator. In the case of Shenzhen Qice Diechu Cultural Creativity v Hangzhou Yuanyuzu Technology,47 the Hangzhou Internet Court in China decided the first case regarding the copyright infringement involving NFTs in the country in 2022. An NFT marketplace was sued by the copyright owner of the cartoon series “Fat Tiger” for copyright infringement, for minting an NFT which was identical to the original work without authorization. The marketplace argued that they were a mere intermediary and no liability shall be fastened against them. The court decided in the favor of the copyright owner and ordered the destruction of the digital file and further awarded compensation for the damages caused to the copyright owner. 45Andrew R.

Chow, NFTs Are Shaking Up the Art World—But They Could Change So Much More, Time (Mar. 22, 2021), https://time. com/5947720/nft-art/ (last visited June 15, 2023). 46 Saregama Ltd v. The New Digital Media & Ors. , 2022 SCC OnLine Cal 2869 ; See How Does Transferring a Copyright Work? , MIGHTYRECRUITER, (last visited Jun. 13, 2023), https://www. mightyrecruiter. com/recruiter-guide/howdoes-transferring-a-copyright-work/. ; Also see Copyright Licenses and Assignments, BITLAW (last visited Jun. 13, 2023), https://www. bitlaw. com/copyright/license. html. 47 Shenzhen Qice Diechu Cultural Creativity v Hangzhou Yuanyuzu Technology, (2022) Zhe 0192 Minchu No.

Furthermore, Juventus FC v Blockeras,48 decided in the year 2022 was the first judgment given on the topic of NFTs in an European Court. Juventus, an Italian football club filed a suit against an NFT creator named Blokeras for selling NFTs depicting various football players wearing Juventus shirts, including the former football star Chistian Vieri. The club contended that this infringed the club's trademark featured in the t-shirts. Even Though Blockeras procured a license from Vieri itself to create his NFT, the Blockers did not possess the right over the usage of Juventus trademark. The judgment was propounded in the favor of Juventus. Further in the case of Nike v.

StockX49, the famous shoe company Nike in Southern New York accused StockX, an online marketplace for trademark infringement, false advertising as well as counterfeiting, for launching an NFT collection involving the actual Nike sneaker without the authorization of Nike. StockX was also accused of selling the NFTs at high inflated prices. While these claims were totally refuted by StockX, the Court gave the judgment in the favor of Nike. All the above-mentioned cases depict the conflict between the rights of intellectual property and right of ownership of the underlying property. Furthermore, the issue of conflict between copyright and NFTs is not a novel conflict. Every single time a new technology is introduced in the market, it results in creating a Freudian dilemma in the field of intellectual property law, in order to recognize their place in the legal framework.

50 Lastly, there is no refuting the fact that there is a need for a legal framework to specify the rights of the NFT holder in consonance with the intellectual property laws.

CONCLUSION

The legal relationships as well as legal order concerned with NFTs shall be acknowledged and addressed in order to facilitate the unique features like immutability, decentralization and transparency that underlay all NFTs and blockchain networks. There is a need for laying an efficient copyright framework which would determine the legal rights attached to an NFT image in order to further pave the way for future legislation which would then help to tackle the major issues of enforceability and accountability in regards to NFTs and blockchain networks. Only solid legislative decisions pertaining to NFTs which are taken in the present

48 Juventus FC v Blockrus SRL, number 32072/2022.

49 Nike, Inc. v. StockX LLC, Civil Action 1:22-cv-00983-VEC

50 The Digital Dilemma: Intellectual Property in the Information Age, THE NATIONAL ACADEMIES PRESS

(last accessed Apr.04, 2021), https://www.nap.edu/read/9601/chapter/7.

will bring huge technological advancements and would massively change the way Copyright and intellectual property laws apply to digital assets. With the constant increase in the popularity of NFTs, the issues pertaining to intellectual property laws will continue to create hurdles in the growth of this new technology. On one hand, where it is termed appropriate to have licensing agreements between the creators of the original work and the NFT owners, on the other hand the present legal framework does not unambiguously define as to which type of content is protected under copyright, trademark and other intellectual property laws. The present challenges faced in the world of cyber-creations and virtual digital assets proportionally pose a potential threat to intellectual property. NFTs work as a tool for tackling one of the oldest problems of the internet which is uniqueness.

It is pertinent to note that intellectual property is threatened by the internet as the internet operates on the fundamental premise of making cheap, infinite and identical copies. Finally, a technology which brings back uniqueness to the internet has been developed, which would prevent the duplication of digital assets with the click of a single button. This technology shall be encouraged and not be cast down by the existing legal frameworks. If the laws are bent in order to facilitate the growth of the small but highly stable market of digital assets, it would bring various scenarios like lending based on providing digital assets as collateral or robust aftermarkets in digital property.

The development in the NFT markets will result in creating a driving force to invest, own and resell unique items resulting in a change in the perception not only regarding the question of what to own but also how to own online.