Binance report sheds light on NFT marketplace copyright issues and other challenges
A report was recently published by Binance, the biggest cryptocurrency exchange globally. It focused on the current state of non-fungible token (NFT) marketplaces.
Intellectual Property Rights and Copyright Infringement
The report underscored the remarkable progress made by the industry while also pointing out the hurdles encountered along the way.
With the increasing popularity of NFTs, the likelihood of copyright infringement and violations of intellectual property rights is also on the rise. Dishonest individuals may try to sell NFTs that encroach on the intellectual property of others, which could result in legal disputes and tarnish the industry’s reputation.
To address this problem, the report from Binance suggests that NFT marketplaces should adopt stringent measures to guarantee the genuineness and ownership of digital assets. These measures should include verifying ownership and incorporating digital watermarks to prevent unauthorized reproduction.
NFT market rampant with copyright and IP violations
On December 2022, the English Premier League club, Manchester United, responded to allegations of copyright infringement made against them by a digital artist named Lucréce. The artist claimed that the NFTs issued by the club, known as the Devil’s collection, are very similar to his own works.
Even Donald Trump has been accused of unlawfully using copyrighted images in several images found within his NFT collection launched last year. The collection, which featured Trump in various poses and costumes, sold out of the initial 4,500 cards made available. However, media outlets and social media users pointed out that some of the images seemed to be based on unlicensed, copyrighted photos.
Many of the designs resembled images found on clothing and stock photo websites. One image, featuring Trump in a cowboy outfit, appeared to be a photoshopped version of a jacket sold on Walmart and Amazon, while another image resembling Trump as a fighter pilot was similar to a Shutterstock image. The company behind the images, NFT INT LLC, did not comment on whether it obtained a license to use the copyrighted material.
Yuga Labs settles trademark lawsuit
Just last month, Yuga Labs settled a trademark lawsuit against Thomas Lehman, who built products for RR/BAYC, regarding the Bored Ape NFTs. The project BAYC, led by Ryder Ripp, was operating websites and smart contracts that utilized the same features, names, and characteristics of the Bored Ape Yacht Club NFTs created by Yuga Labs.
Yuga Labs filed a complaint against Lehman on 20th Jan 2023, which focused on his coding and development of the RR/BAYC RSVP contract and website (rrbayc.com) to sell duplicated NFTs. As part of the settlement terms, Lehman is limited from using “in any manner any BAYC Mark,” must destroy “any materials in his possession or control publicly displaying the BAYC Marks,” and must destroy any RR/BAYC NFT in his possession.
The explosive growth and challenges faced by NFT marketplaces
According to Binance, several factors have contributed to the currently thriving NFT market, such as the surge in interest in blockchain technology, the growth of decentralized finance (DeFi), and the popularity of gaming and collectibles.
Despite these positive developments, the industry is grappling with significant problems beyond copyright issues, including the lack of standardization and interoperability among platforms and the risk of intellectual property infringements.
According to the report, industry participants should work together to set up common protocols and standards that would enhance interoperability, bolster user experience, and promote innovation. Tackling the problems caused by fragmentation and high transaction expenses will be critical in ensuring the continued expansion of NFT marketplaces.