The U.S. government has stated that there is no immediate need to make changes to intellectual property (IP) laws in response to the prevalence of piracy and IP infringement on nonfungible token (NFT) marketplaces, according to a report by the U.S. Copyright Office and Patent and Trademark Office (USPTO). The report, which was published on March 12, focused on the implications of IP law and policy in relation to NFTs. It acknowledged that NFT technology does not prevent unauthorized copying and highlighted the widespread trademark infringement and misuse on NFT marketplaces. However, despite these findings, the agencies concluded that changes to IP laws are not currently necessary or advisable. The report explained that if an NFT contains or links to an unauthorized copy of a copyrighted work, it would be subject to copyright law in the same way as any unauthorized reproduction or display. The report also emphasized that there are existing enforcement tools available to address NFT-related infringements, similar to those used for other online infringements. Under Secretary of Commerce for Intellectual Property and USPTO Director Kathi Vidal commented on the unique opportunities that NFTs offer creators to leverage their IP rights, but also highlighted the challenges in keeping their work secure. The report also addressed consumer confusion about IP rights and the legal status of smart contracts, concluding that these concerns would be better addressed through education and consumer protection rather than changes to IP laws. Although the report did not propose specific uses of NFTs or blockchain technology in U.S. patent and trademark registrations, it stated that their potential will continue to be explored. The study and report were carried out in response to a request from an IP subcommittee of the U.S. Senate Judiciary Committee in 2022. Meanwhile, NFT markets have yet to recover, despite an increase in Ether (ETH) prices this week. The floor prices of top collections have continued to decline, and sales volume data shows a nearly 22% decrease in the past week.
US government report: No new laws necessary as NFTs plagued by rampant IP infringement