Unwinding NFTs in the Shadow of IP Law

TL;DR

This paper argues that existing intellectual property laws are the most appropriate legal framework for regulating NFTs, effectively addressing market challenges and balancing policy concerns better than alternative legal approaches.

Contribution

The article defends the suitability of IP law for NFTs, countering proposals to use personal property or sales law, and highlights IP law's advantages in managing market issues and norms.

Findings

IP laws better address market tragedies and commons issues.

NFT communities develop norms based on existing IP laws.

IP regimes balance innovation, competition, and consumer protection.

Abstract

Amid the surge of intellectual property (IP) disputes surrounding non-fungible tokens (NFTs), some scholars have advocated for the application of personal property or sales law to regulate NFT minting and transactions, contending that IP laws unduly hinder the development of the NFT market. This Article counters these proposals and argues that the existing IP system stands as the most suitable regulatory framework for governing the evolving NFT market. Compared to personal property or sales law, IP laws can more effectively address challenges such as tragedies of the commons and anticommons in the NFT market. NFT communities have also developed their own norms and licensing agreements upon existing IP laws to regulate shared resources. Moreover, the IP regimes, with both static and dynamic institutional designs, can effectively balance various policy concerns, such as innovation, fair competition, and consumer protection, which alternative proposals struggle to provide.