Spotlight have recently been casted on NFTs and its potential applications in the Metaverse, While this may revolutionize the online marketing landscape and the business environment, this also call for changes in the intellectual property protection strategy to cater for this new wave of technological revolution. This article walks through the basics about NFT and the Metaverse and discuss how brands may position their intellectual property protection strategy,
I. NFT EXPLAINED: WHAT IT IS AND HOW IT WORKS?
Non-fungible tokens, NTFs, are data stored on blockchains with unique addresses. As suggested by the term "non-fungible", each NFT is unique and is not interchangeable with other NFTs, which is to be contrasted with its fungible counterparts, e.g. cryptocurrencies. The lack of interchangeability makes NFTs valuable. Ethereum is by far the most popular blockchain system supporting NFTs.
Any digital content, e.g. photos, artworks, songs, videos, collectible cards, or even social media posts, can become NFTs. An NFT may also be a digital link to a tangible asset, say via a QR code. When someone creates an NFT, they create a file on a blockchain, which serves as a decentralized ledger, and the file so created cannot be edited or deleted. All transfers will be recorded on the blockchain. This thus distinguishes NFTs from traditional digital files - digital files can be copied as many times as you want, whereas the chains of ownership of the NFTs recorded on the blockchain cannot be copied. Accordingly, two NFTs with the same digital content may be valued differently due to the differences in the chains of ownership.
