Tokenized Art: The Implications of Copyright Law on NFTs

Abstract

The mid-2010s marked an exponential rise in the popularity of NFTs, which instantaneously became one of the most lucrative and sought-after properties. With its introduction, several questions were raised in the field of law, more specifically in the realm of intellectual property and information technology law. Being a new crypto-asset class, NFTs lack a real regulatory mechanism in India but are still treated as a viable mode of trade, both in art and data. NFTs are digitalized assets representing an underlying work supported by several components like smart contracts and metadata. Although the underlying work is undoubtedly protected, if it is a copyrightable subject matter, the copyright ability of smart contracts and the metadata remains relatively unexplored. The copyright ability of these components has been extensively analysed in this article. Further, the potential of unauthorized tokenization, listing, and sale is a growing concern in the NFT realm, which has not only been highlighted in this article, but solutions to neutralize the issue have been proposed. Finally, the adequacy of the Indian legal regime has been tested; reforms and recourses have been suggested to fill recognized gaps in the Indian legal system with the aim of accommodating and facilitating the NFT market.