It suddenly seems like everyone is talking about non fungible tokens (NFTs). For the uninitiated, an NFT is a unique digital asset that is verified using blockchain. NFTs can be anything digital, and while there has been a lot of media attention about their use in the art world, the sports world is also getting in on the act, as an opportunity for significant new revenue streams.
Sports fans can now buy, sell and trade sports memorabilia in NFT form. Since October last year, the NBA (National Basketball Association) has sold hundreds of thousands of digital highlight “moments” to tens of thousands of basketball fans through its “NBA Top Shot” platform. Launched this year, Sorare digital trading cards feature world footballers. With one of Sorare’s Cristiano Ronaldo cards having sold for just over $100,000, and a LeBron James slam dunk “moment” fetching $208,000 on NBA Top Shot, these are unlikely to be the last players in the sporting world to jump on the NFT bandwagon.
But what does this mean for Intellectual Property rights? Digital trading cards and individual player moments will clearly feature Club logos and player names, all of which may well be protected by Trade Mark Registrations or other IP rights. What should a brand owner do if their Trade Marks are used in relation to NTFs without permission? NBA Top Shot is a partnership involving the NBA and the National Basketball Players Association, but future NFT ventures may not have such legitimate credentials.
The Head of Intellectual Property at Manchester United Football Club recently said (at the Anti-Counterfeiting World Law Summit) that NFTs have rocketed up their agenda, and are something they are having to get up to speed with. Their IP monitoring tools don’t yet have the degree of sophistication to deal with NTFs, and it is not yet clear exactly what the key issues are going to be.
Brand owners (and possibly also the courts) will need to think about whether registered trade mark protection for traditional goods and services will cover use of the brand in relation to NFTs. Copyright in logos may turn out to be easier to enforce in such scenarios, as the goods/services at issue are not relevant to copyright infringement. Monitoring and enforcement strategies will also need to be adapted to cope with unauthorised uses of registered brands in relation to NFTs.
So whilst NFTs present significant opportunities for sports teams and other brand owners, everyone needs to make sure that they don’t take their eyes off the NTF ball. It may be some time before the rules of this new game become clear.