NFTs exhibit uniqueness, value, duality, akin to property. Minting parallels printing and NFT transactions resemble physical work transfers, lacking new copies. This sets the stage for exhaustion of rights application, viewed as a defense against infringement, distinct from copyright limitations.
Last Update: 06.03.24
I Exhaustion of Rights in the Traditional Copyright System. Justifications for copyright exhaustion include promoting access to culture and knowledge, supporting competition and innovation, and maintaining a delicate balance between the rights of creators and the public domain. International agreements such as the WCT and the WPPT provide a framework for exhaustion principles, while different jurisdictions like the USA, the EU, and China have implemented varying provisions regarding exhaustion.
II From Material to Digital Exhaustion in the Digital Era. Digital formats, including e-books, streaming services, and digital downloads, complicate the traditional notions of ownership and distribution. Classificatory dilemmas emerge, questioning the categorization of digital transactions as goods or services, sales or licenses, and distribution rights or communications to the public. Judicial practice across different jurisdictions exhibits divergent approaches to digital exhaustion, with varying interpretations and applications of traditional copyright principles in the digital context.
III New Changes in the Blockchain Era: NFTs Digital Art. NFTs leverage blockchain technology to create unique, immutable digital assets, revolutionizing the way digital works are bought, sold, and owned. NFTs offer economic value by eliminating intermediaries, ensuring authenticity and scarcity, and facilitating royalty collection and transparency. The dual legal nature of NFTs raises complex questions regarding their characterization as virtual assets and digital artworks, blurring the lines between property and copyright law.
IV Legal Characterization of Trading NFTs Digital Collections. Unlike traditional digital works, NFT transactions involve the transfer of ownership and copyright simultaneously, complicating legal analysis. Questions arise regarding the applicability of distribution rights, communication to the public, and civil law concepts such as assignment of debt. Comparisons with traditional distribution models highlight the unique aspects of NFT transactions and their implications for copyright law.
V Whether Exhaustion of Rights can be Applied to Trading NFTs Digital Collections. Contradictions and uncertainties persist regarding the application of exhaustion principles to NFTs. Legal considerations include the interpretation of ‘tangible medium,’ the characterization of NFTs as goods or services, and the scope of exhaustion in the digital environment. Balancing the economic interests of creators, the rights of consumers, and the public’s access to culture and knowledge remains a paramount concern.
VIReconsidering Digital Exhaustion in the Blockchain Era and the Way Forward. Aligning copyright law with technological advancements, promoting innovation, and combating piracy are key objectives. Legislative adjustments, judicial discretion, and doctrinal flexibilities are necessary to adapt copyright law to the realities of the digital age.
Zhenni Chen
Professor Yongming Li, Zhejiang University, PRC
I.3 Funktionswandel
