Despite Concerns, Study Finds No Need for NFT-Specific Legislation, Highlighting Risks of Bad Actors and Misinformation”

A comprehensive 112-page study conducted jointly by the United States Patent and Trademark Office (USPTO) and the U.S. Copyright Office has determined that existing intellectual property laws are sufficient to address concerns regarding copyright and trademark infringement related to non-fungible tokens (NFTs).

Requested by former Democratic Senator Patrick Joseph Leahy from Vermont and Democratic Senator Thom Tillis from North Carolina in June 2022, the study involved three public roundtables and the collection of feedback from various stakeholders. Despite common occurrences of trademark misappropriation and infringement on NFT platforms, most stakeholders expressed satisfaction with the current legal framework.

“The Offices agree with these assessments and do not believe that changes to intellectual property laws, or to the Offices’ registration and recordation practices, are necessary or advisable at this time,” concluded the study.

Also, read- Investing in NFTs: Top 10 Practical Uses of NFT (Non-Fungible Tokens)

Concerns were raised among stakeholders about the premature nature of NFT-specific legislation, fearing it could hinder the ongoing development of NFT-related technology.

However, a technology industry association cautioned against the misuse of trademarks by bad actors to exploit consumers’ personal information, urging regulators to consider this risk in the context of NFTs.

While U.S. regulations surrounding NFTs have been somewhat ambiguous, there have been notable instances of enforcement actions. In August 2023, Impact Theory, a California-based media company, settled charges brought by the U.S. Securities and Exchange Commission (SEC) related to NFT offerings. The SEC classified these NFTs as securities due to promises made to investors about potential profits, leading to a settlement of $6.1 million and the establishment of a reimbursement fund for investors.

The study also highlighted the challenge of enforcing trademark registrations for physical goods against similar digital goods tied to NFTs, citing a lack of controlling judicial precedent.

Despite regulatory complexities, notable figures like Donald Trump have ventured into the NFT space, launching and selling out their NFT collections.