From the Bored Apes collection to Jack Dorsey's auctioned Non-Fungible Tokens (NFT) of his first-ever tweet, "just setting up my twttr", which sold for over US$2.9 million, the creation and sale of NFTs is one that took the world by storm, generating millions for its owners, and establishing a whole new branch of blockchain exchange; and in turn, a legal system for its protection. As in the words of John F. Kennedy, "Change is the law of life. And those who look only to the past or present, are certain to miss the future". It is however pertinent that for the proper dissection of this topic, the true meaning of NFTs, how they operate, and what they entail should be studied. NFTs are blockchain-based units of value or "tokens", with a unique ID linked to an underlying asset. The blockchain most frequently used for NFTs is Ethereum. However, it should be noted that NFTs can be held on other blockchains. NFTs comprise of software code in the form of "smart contracts". These smart contracts consist of the details of the central digital or physical asset to which the NFT relates, and also the rules and rights attached to the NFT (for example, a rule that the original creator of the NFT gets paid a percentage of any subsequent resale value). The blockchain, an innovative technology, has established itself as a crucial component of modern technology. NFTs are one of these innovations and the subject of this article. NFTs are one-of-a-kind digital certificates registered on a blockchain, that represents ownership of a given virtual or tangible item such as a work of art, real estate, music, books, memes, or videos. 1 Examples of NFTs are digital artworks, fashion accessories, avatar customization, sports highlights and memorabilia, music, etc. Impressively, the NFT market has gained so much popularity in Nigeria.
According to a poll on Finder.com in 2021, Nigeria was ranked sixth among twenty countries for NFT adoption. 2 NFTs represent virtual verification of proprietary rights and guarantee authenticity, thereby making them easy to trade on the blockchain network. The ownership of an NFT can only be attributed to one owner at a time and can exist in varying forms, including but not limited to clothing for avatars in the metaverse. However, as is frequently the case with novel ideas, a plethora of legal problems arise. Particularly, the question of Intellectual Property (IP) related issues such as trademark infringement through NFTs. In the light of this, this article aims to address the relationship between IP and NFTs; particularly where IP rights could be infringed upon and lastly, remedies in the event of such infringement, as in the words of the US Supreme Court Justice, Oliver Wendell Holmes Jr., "your right to swing your arms end just where the other man's nose begins".
On the other hand, a trademark refers to any recognizable insignia, mark, phrase, word, or symbol that depicts a specific product and legally differentiates it from all other products of its kind. 3 A trademark solely recognizes a product belonging to a particular company and identifies the company as owner of the brand. 4 Thus, trademarks are generally considered as a form of intellectual property that may or may not be registered. 5 In Nigeria, trademarks and their components are governed and regulated by the Trademark Act. 6
A person who lists an NFT for sale or who purchases one must make sure they are not infringing on Nigeria's laws protecting intellectual property (IP). Generally, trademark infringement may occur when a person without the consent of the proprietor, uses a mark similar or identical to another person's trademark on similar or identical goods in respect of which the mark is registered, thereby causing consumer confusion. 7 The law has always been faced with the exigent task of moving with the times and developing in line with modern technologies. It is equivalent in the discourse of NFTs, as with the advancements of NFTs, the need for its protection likewise grows. It must then be noted that the topic of NFTs has not been addressed by the requisite legislation in Nigeria. However, principles regulating it can be drawn from existing IP laws. For example, Section 36(a) of the Copyright Act 2022 states that Copyright is infringed by any person who without the authorization
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Footnotes
1. Louis Denicola, 'What to know about non-fungible tokens (NFTs) — unique digital assets built on blockchain technology' (2022) https://www.businessinsider.com/personal-finance/nft-meaning?r=US&IR=T accessed 15 March 2023
2. Richard Laycock, "NFT Statistics 2021", Finder.com available at https://www.finder.com/ng/nft-statistics assessed on 14/03/2023
3. A STUDY OF INTELLECTUAL PROPERTY RIGHTS AND ITS SIGNIFICANCE FOR BUSINESS
4. The Entrepreneur at Thurgood Marshall Library
5. Trademark Definition, What It Protects, Symbols, Example By CARLA TARDI www.investopedia.com/terms/t/trademark.asp
6. Trademark Act Cap T 13 LFN 2004
7. Section 43(4) Trademark Act
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
