Weston Anson, Chairman of CONSOR IP Experts, recently participated as a keynote speaker for the ABA – IP Law Fall 2021 Conference. Ahead of the conference, Mr. Anson was interviewed by two law students, Bernell J. Alexander III and John Pierce, on the topic of NFTs and the role they will play in the courts as a recently trending piece of intellectual property. Here is what Mr. Anson had to say:
What is the current status of NFTs as an economically viable piece of intellectual property?
“Of course NFTs are viable; the question is: how does one make them valuable and viable? How does one use an NFT to benefit the overall intellectual property program of a corporation, artist, studio or individual? They are viable because they are unique. They have to be controlled in an environment that has a centralized banking function. They cannot, in my opinion, be put on a decentralized, bitcoin-type of blockchain environment. If an NFT ends up being on a decentralized blockchain environment, then the issues are: one, we will not know who owns that NFT; two, what it’s really being used for; three, whether it has been resold; and four, if it has been resold, who’s got it now and how much did they pay for it? So, there are multiple issues around the viability of an NFT in terms of the original issuer. Will it be viable if it ends up on a bitcoin-type blockchain system? If it does, then there’re serious questions.
“For the next part of Mr. Pierce’s question, what is the economic status? Well, clearly in and of themselves, they are worth nothing. NFTs gain value only in their attachment to that which may have value. Two very good examples that we all know about are the Top Shot program that the NBA has launched with some great success; and, of course, art like the $69 million sale of Beeple’s piece of art called ‘5,000 days.’ A third, very good example, is that you can look into some of the metaverse environments, like Roblox, where you’ll find Sotheby’s doing a very nice business selling digital art in that metaverse, attached to NFTs.”
Will NFTs be regulated more stringently in the future? What are the most common issues courts and legislatures are facing concerning NFTs?
“The issue is they are not being regulated.
“I believe there are inevitably going to be squabbles surrounding ultimate ownership. When an artist sells his NFT, he may well put a caveat on it that it cannot be resold without the artist getting a 5% resale royalty. I believe an artist should get their resale royalty, but often times that is not going to happen and the courts are going to have to find a way to impose or at least codify that enforcement.”