The protection of intellectual property rights in non-fungible tokens (NFT) is an important element in the process of distribution and trade of digital works. There is now a first case on this in China. In April 2022, the Hangzhou Internet Court held a public hearing on the first NFT infringement case in China. The plaintiff was Qicediechu, which owns an exclusive copyright to the Fat Tiger illustration series, and the defendant was Hangzhou Yuanyuzhou, which operates the Bigverse digital collectibles trading platform. A user had created and sold a digital NFT work on Bigverse that was identical to the Fat Tiger work.
The court held that the trade of digital NFT works involves the reproduction and distribution of the works through the information network, and that the consent of the copyright owner of the works must be obtained for such trade. Because the digital collectibles trading platform receives a commission for trading NFT works, it has a verification obligation. It must confirm the legality of the source of the NFT digital works and take reasonable measures to prevent infringement. The court finally ordered the defendant to immediately delete the Fat Tiger NFT works published on the affected platform and to compensate the plaintiff for the costs and his economic losses compensation.
In China, legal supervision of NFT includes intellectual property protection as well as other aspects such as blockchain-related regulations. NFT traders and platform operators should learn about the relevant obligations in detail.
Picture: WeChat Public Account from Hangzhou Internet Court