You have probably heard about Non-Fungible Tokens (NFTs), these tokens have become the new trend sweeping artists, collectors, and investors off their feet. These new and scarce forms of digital property, protected with the help of blockchain, have become a new approach toward digital identification. As if it is possible to own a digital painting, or a song, or even a plot in the world of computers with sure shot guarantee of originality and uniqueness. NFTs have taken this dream into reality, providing persons with the ability to sell tokenized assets and provide a value to ownership on the previously seemingly inexhaustible digital frontier.

Currently, the NFT global market is valued at approximately $3 billion; however, experts believe that it will climb to $13. By 2027, the market stood a staggering 6 billion, with a CAGR of 35. At a negligible of 0% for the estimated time frame in the forecast period. Such an exponential growth can be attributed to the continued and rising interest in NFTs and the extent of ways through which people and organizations extend the use of this revolutionary technology. Market sales of NFT in 2021 amounted to $ 17. 6 billion, this marks a jump from the $82 million recorded in 2020, this shows how fast this new norm has developed and is now mass.

But the growing ecosystem has thrown up several questions on the legal issues surrounding the IP rights that need to be solved. Altogether, despite the fact that NFTs are filled with potential for the digital creative economy, the connection between NFTs and the IP rights has began a wholly new area with its specificities.

On one hand, we hold in our hands what can become the game changer in the manner of creating, owning, and trading digital goods; on the other hand, there exist the seminal theories of IP rights that regulate these masterpieces of the digital age. Still this new form of power comes with the necessity to comprehend and safeguard future usage of IPs that form the basis of Digital Assets. To put it into the context of a metaphor, it's as if we were dancing: we need to honour the rights of artists and creators and we need to swivel to the contained and creative possibilities of NFTs.

UNDERSTANDING THE NFT'S AND INTELLECTUAL PROPERTY
At the heart of NFT phenomenon there exists a primary token, a digital asset with the attributes of a digital signature, that would point to the ownership over a particular object. Original and unique digital asset, each NFT contains a unique digital hash that is certified through the use of block chain, mainly the Ethereum platform. This distinctiveness guarantees credibility and openness, revolutionizing the manner in which the online products are owned and exchanged. It is as personalized as a fingerprint; it is also as safe and as reliable as a fingerprint.

IP is, therefore, the rights given to the fruit of individuals' minds, ideas, inventions, literary and artistic works, designs and symbols among others. The major categories of IP are copyrights, trademarks, patents, and trade secrets. NFTs interact with IP in several ways; they are capability of allowing artists to make more money through the sales of their arts. It's as if the technological body is meeting a creative soul – NFTs offer the structure, while IPs guarantee fair remuneration to the artists.

The USPTO said that for the year 2022 trademark registrations linked to NFTs were being filed at the rate of 15 per day proving how quickly this market is growing. It is like a race to own a special plot – the companies are running to their registers to trademark to be on the safe side in the NFT market space.

COPYRIGHT CHALLENGES WITH NFT'S
The copyright issues are one of the main issues of NFTs with regard to rights and ownership of the tokens that are linked to digital assets. Contrary to expectations, an NFT is an asset that grants the holder only the right of ownership of the particular digital item and does not always include the ownership of copyright and usage rights. This may result in misunderstandings and legal problems concerning infringement when the use terms are not well stated. It seems to me that both creators and the collectors are playing a game of tug of war – as they are each tugging at the legal ropes and are unsure of what they are entitled to.

This make the issue of copyright ownership and usage rights a very sensitive area where both the creators and collectors are often in a litigation mode as to who owns or has the right to use the material supplied by the other side. Every learner knows where they are headed; nonetheless, the way looks quite hazy.

To overcome these difficulties, certain NFT projects have applied for certain legal requirements of licenses, particularly, Made By Apes license for Bored Ape Yacht Club. This particular license gives the NFT owners the permission to utilize and monetize their ape images. Also, as for the legal aspect, some NFT projects have used the Creative Commons Zero (CC0) licenses, or in simple terms, the licenses that make creators give up their copyright and contribute in the public domain. Such actions show that there is an opportunity to find cooperation as well as design some creative approaches to protect copyrights of NFTs. It's kind of like playing chess, which is to delineate the usage rights of the collector and the licensing terms applied to it so that the creator can assert control over their ideas and creations.

TRADEMARK PROTECTION IN THE NFT SPACE
Trademark infringement in NFTs can cause dilution of brands and confusion to the consumers who may mistake fake products for original ones. When NFTs continue to grow popular, trademark owners need to be aware of their rights and protect themselves in the NFT market. This may include the registration of marks with respect to digital asset and virtual goods and actually monitoring the use of their badge on NFT projects. This is similar to a game of cats and rats in which the trademark owners have to assure that they are one step ahead of any potential offender as they try to protect their brands in this fluid NFT market.

Luxury brands in 2021 sought trademark protection for more than 2,000 NFTs, virtual items, and the metaverse. Nike, Gucci and Louis Vuitton are some of the brands that have registered for NFT trademarks hence showing that brands need to change and adopt to new technologies as a way of protecting their trademarks. It is a never-ending race since businesses need to secure their brand identities in the short time possible in the current trends of the market.

Current trademark protection approaches should involve both the trademark owners and users together with NFT marketplaces and legal advisors to influence the subsequent course of NFT trademark protection. On these issues, the USPTO has given out guidelines, and further, it will apparently engage with the communities to find out more concerning, in order to have the rights of owners of trademarks protected in the fluid NFT world. It is similar to an orchestra – many parts contribute their actions and efforts, and what is created is a beautiful and a quite guarded area of the digital world.

REGULATORY LANDSCAPE
Nonetheless, it is crucial to note that the using of NFTs and IPs is gradually growing and still challenging, which makes the situation full of uncertainties. One of the main legal issues that can be mentioned regarding NFTS is that they are global and operate across national borders, which creates certain problems related to jurisdiction.

Therefore, it is necessary to engage artists, platforms, collectors, and legal specialists to address these legal issues and define the development of NFTs and IP. It is much like chess, but on an international level; the tactics and strategies included are more complicated, along with the implications, yet the returns are much higher than in any other previous game. While people across the globe cannot stop gushing about non- fungible tokens, or simply NFTs, the Indian government has gone slow on this recent fad. They do not go at a fast pace, they don't get slow either, though it seems like they are dancing the waltz, gingerly searching for the rhythm.

On one hand, the government has woken up to the existence of NFTs through the modern classification of virtual digital assets featured in the current Finance Bill. Nonetheless, NFTs are a grey area in India; They have imposed a 30% tax on NFT transactions which is their way of saying "We see you NFTs, but you're going to have to come clean!" You know, NFTs are then purchased and traded through these cryptocurrencies and as we all know the Indian government has not clearly legalized cryptocurrency use in India yet. While the central bank has been prohibited from engaging in cryptocurrencies as early as 2020 by the Supreme Court, it has yet to come to a consensus over roughly a new crypto bill at the moment, and such new bill might affect NFT also in future.

But if the Cryptocurrency Bill which is proposed to the government actually disallows or severely restricts cryptocurrencies, the same gloomy outlook may apply to all forms of NFT in India. Basically, it is always one domino piece that is toppled and perhaps the other domino pieces will follow it. So, in a way, the Indian government is like a cautious dance partner, carefully observing the NFT movement and trying to figure out the right steps to take. They've made the first move by imposing taxes, but the rest of the dance is still unfolding.

Conclusion
Non-Fungible Tokens present an exciting frontier for digital creativity, ownership, and commerce. However, the rapid growth of the NFT ecosystem has also highlighted the need to address the complex IP challenges that arise. As the NFT space continues to evolve, creators and IP owners must proactively protect their rights and explore the opportunities presented by this new frontier. It's like a double-edged sword – we must embrace the potential of NFTs while also being mindful of the risks and responsibilities that come with this new frontier.

Ongoing adaptation, innovation, and collaboration among stakeholders will be essential in shaping the future of NFTs and IP. By addressing the IP challenges head-on and embracing the potential of NFTs, we can unlock new possibilities for digital creativity, ownership, and commerce. While changes to IP laws are not currently necessary to address the use of NFTs, the unique aspects of the technology generally do not raise new IP problems. Instead, the focus should be on fostering open dialogue, developing best practices, and empowering creators, collectors, and businesses to navigate this transformative digital landscape. It's like a symphony – when all the players work together in harmony, the result is a beautiful and well-protected digital landscape.

As the NFT market continues to grow, with projections reaching $13.6 billion by 2027, it is clear that the intersection of NFTs and IP rights will only become more complex. However, by embracing the challenges and opportunities presented by this new frontier, we can create a future where digital creativity thrives, IP rights are protected, and the full potential of NFTs is realized. It's a future where the possibilities are endless, and the only limit is our imagination.

References:

• NFTs and Intellectual Property | Practical Law The Journal | Reuters https://www.reuters.com/practical-law-the-journal/transactional/nfts-intellectual-property-2023-02-01/
• Legal Guide on NFTs: Challenges & Risk Mitigation – CoinDCX https://coindcx.com/blog/cryptocurrency/legal-challenges-and-risks-around-nfts/
• NFTs and Intellectual Property Rights (IP): A Legal Analysis of ... – NFTmetria https://nftmetria.com/nft-market/nfts-ip-rights/
• Intellectual Property & NFT Collaboration: Bridging the Gap https://ttconsultants.com/the-intersection-of-intellectual-property-and-nfts-bridging-the-digital-frontier/
• An overview of NFT and IPR – iPleaders https://blog.ipleaders.in/an-overview-of-nft-and-ipr/

Written By: Harshit Mishra, 2nd year BALLB, Bharati Vidyapeeth New Law College, Pune