Legal perspective of NFTs (Non-fungible tokens)
Authors: Marius Stanciu - Partner Buju Stanciu & Asociații Ștefan Călin - Intern Buju Stanciu & Asociații
Introduction
Whether NFTs (Non-Fungible Tokens) represent the future or a bubble, the continuous growth of the phenomenon means that they cannot be ignored. The evolution of NFTs has been staggering: over 2 billion dollars were spent on them in the first quarter of 2021 alone1.
NFTs are currently among the most popular2 digital assets. The Metaverse has facilitated the popularisation of these asset-s, being the ideal place where they can be displayed. For instance, in The Sandbox3, metaverse, users can purchase virtual “land” (land) on which to build various structures or which they can rent out, exactly as if it were real land. That land is, from a technical standpoint, an NFT on the Ethereum blockchain.
NFTs have also stolen the spotlight when it comes to advertising. Adidas4 has listed for trading a collection of NFTs in the Metaverse, which are already sold out. Nike5 has not been left behind either, entering the Metaverse by launching NFTs featuring virtual trainers. At the same time, luxury fashion houses, including Louis Vuitton and Burberry, have entered the field by creating characters from NFT games bearing their brands6.
Due to the high trading prices, NFTs have also become a means of expressing social status, by displaying them as profile pictures on various social networks, such as Twitter7. There is a close connection between NFTs and virtual currencies (criptomonede, in common usage), given that on most platforms dedicated to NFTs (such as the main platform: OpenSea8) transactions involve an exchange of cryptocurrency for an NFT.
This study will address the copyright law issues that may arise in the process of creating, trading and acquiring NFTs on mainstream platforms (e.g., OpenSea), for artistic purposes, and not for authentication purposes9/registration for access to various systems10, certification of certain qualities of a product11 or for obtaining certain benefits in exchange12.
- What is an NFT from a technical standpoint?
According to one definition, non-fungible tokens sau NFTs (Non-Fungible Token) sunt cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from one another. Unlike cryptocurrencies, these cannot be traded or exchanged at equivalence. This differs from fungible tokens, such as cryptocurrencies, which are identical to one another and can therefore be used as a means for commercial transactions13.
NFTs can cover, among others, 2D or 3D visual art, music, sounds, photos or internet domains. Practically, almost any element that can be stored in the virtual environment can be the subject of an NFT. What is specific to NFTs and confers uniqueness upon them in the digital world is facilitated by blockchain technology. This technology has made it possible to ensure individuality and uniqueness in the virtual environment, which was not previously possible.
In a specialist article14 it is mentioned that the NFT contains a piece of code written on the blockchain which contains various bits (bits) of information. In order to transform a digital file (containing the picture, drawing, song, etc.) into an NFT, i.e. the process known as minting, one can resort either (i) to the implementation of token standards (token standard) relating to smart contracts (smart contracts)15 on a blockchain, or (ii) to the use of minting tools specially dedicated to creating NFTs. We will address the first method below.
Thus, blockchain technology is used for “tokenisation of digital assets” (tokenization of assets), where the token is a digital unit of value, which can be expressed in programming language, which is recorded on the blockchain16. Tokens can be fungibile17 (e.g. cryptocurrencies, shares, loyalty points, etc.) or nefungibile (NFTs), where fungibilitatea18 represents the capacity of an element to be replaced by another of the same kind, quality and quantity, where it forms the subject matter of an obligation. By contrast, nefungibilitatea will be synonymous with the uniqueness of the elements. We will analyse the ERC-721 standard19, used on the Etherum blockchain, which is among the most frequently used token standards.
The ERC-721 standard contains certain mandatory elements and others that are optional. The first essential element of an NFT is a number known as the tokenID, which is generated when the token is created; the second is the contract address which is a blockchain address that can be viewed anywhere in the world using a blockchain scanner20. The combination of elements contained in the token makes it unique: there can only be one token in the world with that combination of tokenID and contract address. In essence, in order to identify an NFT, the unique combination of these two numbers (contract address and tokenID) is required. In other words, the digital file referred to above (which is intended to be turned into an NFT) is used by the smart contract, which employs a certain tokenisation standard and which, through compilation, produces metadata (which characterises the unique combination of tokenID and contract address), which is subsequently recorded on the blockchain. That metadata, encoded on the blockchain, has its own identifying elements, which confers uniqueness on the token.
However, there are also other important elements that may be present: (i) one is the creator's wallet address, which helps identify the NFT with its originator, (ii) most NFTs usually include a link to where the original work can be found, since the non-fungible token does not represent the work itself but, rather, a unique digital signature linked to an original work.
As the specialist literature rightly points out21, the NFT is, in fact, a digital title to an original work or evidence of an original work signed by the author, not the work itself. This explains the emergence of NFTs whose subject matter is works of art over which previously acquired rights exist, or NFTs relating to pre-registered internet domains, for example. It would be absurd to accept that, for instance, holding/creating an NFT relating to the Nike brand could confer upon us the rights of use that Nike previously obtained by going through costly and lengthy procedures before the competent bodies. This analysis will further develop and nuance the interplay between intellectual property law and Romanian copyright legislation, on the one hand, and the concept of the NFT, on the other.
- What is an NFT from a legal standpoint?
As stated above, an NFT represents the unique combination of contract address and tokenID, which is globally unique and stored on the blockchain. In legal scholarship, the opinion has been expressed23. according to which NFTs are crypto-assets that may embody movable property or other rights that can be traded in exchange for virtual currencies or transferred from one holder to another.
The specialist literature defines24 cripto-activele as those digital assets recorded on a distributed ledger, secured by cryptography, while digital assets25 represent anything that can be stored and transmitted electronically (using a computer), can be held and, therefore, can carry associated ownership and use rights. Owing to the diversity of digital assets, they can take various forms, ranging from audio files to email accounts and even crypto-assets.
In a proposed EU regulation26, a crypto-asset is defined as a digital representation of value or rights that can be transferred and stored electronically, using distributed ledger technology or similar technology.
By analogy with cryptocurrencies, from the standpoint of Romanian civil law, the NFT is a bun mobil, in civil circulation, individually determined (in the absence of a contrary stipulation by the parties), nefungibil (although the parties may agree that NFTs within a collection are to be fungible), consumable, income-producing (if we accept that they may be rented out, for example), divizibil (if we accept that a fractional share of the NFT can be purchased)27, principal (if we do not consider the NFT to be an accessory to the digital file over which the copyright arose), incorporal, and may even be regarded as a mass of assets (if we accept that a collection of NFTs is intended for exchange), nedomenial, generally held for exclusive use (although we do not rule out the existence of NFTs held in joint or common ownership) and sesizabil.
It is important to note that on mainstream NFT trading platforms, in order to carry out transactions with them, the user-parties to the transaction each need to have a digital wallet, since the existence of the NFT in the form in which it was created (metadata on the blockchain) is conditional on the user's “virtual identity” on the blockchain, that is, on the fact that the user has a digital wallet (wallet. Furthermore, on most relevant platforms, in order to acquire an NFT, the “buyer” must offer the “seller” in exchange a certain determined amount of cryptocurrency. Cryptocurrency (virtual currency) is also an asset. Consequently, the contract whereby one party offers cryptocurrency and, in exchange, the other party offers an NFT is a contract of exchange, governed by art. 1763-1765 din Codul civil (articles 1763-1765 of the Civil Code)28. Of course, the transaction concluded within the platform, from a technical standpoint, is carried out by means of a smart contract, but this does not affect its legal characterisation.
One of the key issues is the widespread confusion surrounding the rights acquired when purchasing an NFT. Some acquirers believe that they obtain the original work of art and all rights associated with it. In reality, however, they simply acquire the metadata associated with the work, not the work itself.
- Copyright legislation. Does the assignment of copyright work within platforms dedicated to NFTs? Resale right (droit de suite) versus royalty.
Copyright is inherently intertwined with creative activity, and NFTs are therefore closely connected to these issues. To begin with, we must establish the conditions under which copyright is born.
The main law regulating copyright over literary, artistic or scientific works, as well as over other works of intellectual creation, is Legea nr. 8/1996 (Law no. 8/1996) on copyright and related rights (hereinafter “Legea nr. 8/1996 (Law no. 8/1996)”), pursuant to art. 1 of the same normative act29.
A) The NFT as subject matter of copyright
According to art. 7 of Legea nr. 8/1996 (Law no. 8/1996), “[o]riginal works of intellectual creation in the literary, artistic or scientific domain constitute subject matter of copyright, whatever the manner of creation, mode or form of expression, and irrespective of their value and purpose”.
Therefore, in order to speak of copyright, we must be in the presence of a work of intellectual creation. In other words, the creation, whatever its nature, must be the fruit of human imagination (of a natural person), and not emanate from a robot (e.g.: products of artificial intelligence30), or from “creations” arising by chance in the surrounding environment, without human intervention, or from other such sources.
From the wording of art. 7 of Legea nr. 8/1996 (Law no. 8/1996) (“original works of creation [...] whatever the manner of creation, mode or form of expression”), a second condition arises: the work must be capable of being expressed in a certain form31, a form that another person can perceive32. Thus, a person must be able to be aware of the existence of the form and of the existence of the work it embodies (when a person sees a book, they should be able to assume that those pages embody a piece of writing; when a person sees a USB memory stick, they should be aware that this medium can store data), but need not necessarily understand or appreciate it.
Finally, the third condition arising from article 7 of Legea nr. 8/1996 (Law no. 8/1996) is that the work must be original. According to the prevailing doctrinal views, with which we concur, in the continental system (and therefore also in Romania), by originalitate one understands the fact that the work contains an expression of the author's personality, as opposed to the system found in the USA, where a work must meet two conditions to be original: it must not be copied from a prior creation, and it must contain a creative step. Originality may therefore also concern pre-existing creations of other authors which, through the imprinting of the author's own vision, become original works. On the other hand, one may also consider that the requirement that the work not be copied is a necessary component of the fact that it must represent an expression of the author's personality, a distinction that is relevant, for example, in the case of computer programs, where the originality requirement is reduced to the idea of not being copied.
Originality is not to be equated with novelty, nor with the artistic or pecuniary value, usefulness or purpose of the work.
If these three conditions (intellectual creation, capable of being expressed in a certain form perceptible to the human senses, and originality) are met, the work may constitute subject matter of copyright.
Furthermore, art. 9 of Legea nr. 8/1996 (Law no. 8/1996) excludes from the scope of copyright certain matters such as ideas, theories, texts of a political or administrative nature, means of payment, news and press information, mere data or facts. In other words, in essence, no one may hold a monopoly over an idea or a factual piece of information, but only over the original manner of expressing it.
Returning to NFTs, we must examine in respect of which creation copyright may arise. As noted above, from a technical standpoint, an NFT represents the unique combination of tokenID and contract address, stored using code on the blockchain. According to art. 7 lit. a) of Legea nr. 8/1996 (Law no. 8/1996), computer programs may give rise to copyright for their creator. The question is whether, for the purposes of granting legal copyright protection (i), we assimilate metadata (which contains the tokenID and contract address) to a computer program sau (ii) we grant copyright to the content of the compiled file to which the metadata points (metadata results from the compilation of the smart contract, being essentially a link between the blockchain and the digital file uploaded by the creator during the minting).
We are of the opinion that, in accordance with Romanian law currently in force, the second option is the correct one. Thus, the creation which truly meets the three conditions required to form the subject matter of copyright (intellectual work, capable of being expressed in a certain form perceptible to the human senses, and original) is in fact the content of the digital file which is meant to be “linked” to the blockchain network for the purpose of distribution to other users, as an immediate purpose (for trading, authentication, or simple display and the like, as mediate purposes). That content of the digital file (the picture, drawing or music that is the subject of the minting) process) is in fact the fruit of the author's imagination, while the metadata is merely a means of propagating this work in the digital environment, the metadata also being the product of the execution of the smart contract corresponding to the standard chosen on a given blockchain. Blockchain is thus a platform, an infrastructure, for the organised distribution of works in the online environment.
One of the first lawsuits involving copyright infringement is currently underway in the USA and involves the artist Jay-Z. In 1996, Jay-Z released his debut album Reasonable Doubt with the record label Roc-A-Fella, which was co-founded by producer Damon Dash. The producer is now only a minority shareholder in Roc-A-Fella, but in June 2021 he announced that he would list an NFT of Reasonable Doubt with the collectibles platform SuperFarm. Roc-A-Fella holds the copyright in the album, and so it immediately sued Dash, alleging copyright infringement33. A judge issued a temporary restraining order halting the trading34, the case being still pending resolution.
B) When and how does copyright arise in the case of an NFT?
Under art. 1 para. (1) of Legea nr. 8/1996 (Law no. 8/1996), the intellectual creation is recognised and protected, irrespective of its communication to the public, by the mere fact of its creation, even in an unfinished form.
Thus, in the case of NFTs, the moment at which copyright arises is the moment the digital file is created, that is, the moment the photograph, drawing or sounds forming the subject-matter of the minting process, and contained in that digital file, are actually made. Copyright arises without any prior formality, from the very moment the digital drawing is completed, the photograph is taken or the sounds in question are created.
C) Transfer of NFTs
Under Legea nr. 8/1996 (Law no. 8/1996), copyright over a work comprises, on the one hand, economic rights, and on the other, moral rights.
Moral rights (or personal, non-economic rights), provided for by art. 10 of the law35, entail the disclosure of the work, authorship of the work, the name under which the work will be brought to the public's attention, respect for the integrity of the work, and withdrawal of the work.
As stated above, the author will always be the person(s) who created the work (natural persons), authorship being inalienable.
Economic rights mainly entail the exclusive exploitation of the work36 (copyright) and the resale right. Economic rights may be transferred by the author by way of cesiune (for consideration or free of charge) or by way of universal succession (the legal heir of the deceased author of the work will, among other things, inherit from the estate the economic rights arising in connection with the deceased's work), or particular succession (the deceased author left a will transmitting, upon death, his economic rights in connection with a work).
As regards NFTs, once created and “chained” to a blockchain through minting, on most platforms the author has the right to “list for sale” the NFT created, either with the possibility of purchase by any other user of the platform, or with the possibility of transfer, for consideration or free of charge, to a specified person.
Legitimate issues arise concerning the operation of the copyright assignment mechanism. We shall consider below the situation in which the author of the NFT “lists it for sale” on a trading platform for all users of that platform. The transaction will be legally classified, under art. 1225 para. (1) of the Codul civil (Civil Code), according to the main legal operation carried out by the parties, which is the exchange (as shown supra), if regard is had to the real and concordant intention of the parties required for the classification of the contract (art. 1266 of the Codul civil (Civil Code)).
Consequently, the question of any transfer of copyright will be ancillary to the exchange contract, which is the main operation intended by the parties, and will therefore be dependent on the exchange, in accordance with the maxim accesorium sequitur principale.
Art. 43 din Legea nr. 8/1996 (Law no. 8/1996) provides that the existence and content of the assignment agreement (exclusive or non-exclusive) of the economic rights may only be proven by written form of the agreement, with the exception of contracts concerning works used in the press.
In the absence of a “classic” contract, concluded in physical, materialised form between the parties (a hypothesis rarely encountered in this field), it must be examined whether ticking a box made available by the trading platform by the NFT creator regarding the exclusive or non-exclusive assignment of copyright has the effect of successfully transferring these rights (it must be examined whether that ticking has the value of a document under private signature).
Pursuant to Art. 267 of the Code of Civil Procedure, documents drawn up in electronic form are subject to the provisions of special legislation. According to Art. 7 of Legea nr. 455/2001 (Law no. 455/2001) on the electronic signature, in cases where, under the law, written form is required as a condition for the evidencing of a legal act, a document in electronic form fulfils this requirement if it has incorporated into it, attached to it, or logically associated with it, a extended electronic signature, based on a qualified certificate and generated by means of a secure signature-creation device37.
For the purposes of that law, by document in electronic form is meant a collection of data in electronic form between which there are logical and functional relationships and which reproduce letters, numbers or any other characters with intelligible meaning, intended to be read by means of a computer program or other similar process (Art. 4(2)).
Therefore, the platform made available to users through which the NFT creator has the possibility to express his consent, by ticking a box, regarding the assignment of the transferable copyright over the work contained in the digital file (to which the process of minting) refers) may, in our opinion, be regarded as a document in electronic form.
However, for this document to be capable of amounting to a document under private signature, it must have attached to it an extended electronic signature, which, pursuant to Art. 4(4) read together with point 3 of Legea nr. 455/2001 (Law no. 455/2001), is that electronic signature which fulfils cumulativ the following conditions: a) it is uniquely linked to the signatory; b) it ensures the identification of the signatory; c) it is created by means which the signatory can maintain under his sole control; d) it is linked to the data in electronic form to which it relates in such a manner that any subsequent alteration of the data is identifiable.
On most online NFT trading platforms, users must have a wallet used to carry out transactions, which is the “place” where crypto-assets (virtual currencies, NFTs, etc.) are stored and which represents the users' virtual identity. Upon creation of the NFT through minting, the execution of the smart contract generates a contract address, which represents a unique identifying element linking the walletwallet of the creator to the blockchain.
We are of the opinion that this contract address can be considered to fulfil conditions a), b) and d) mentioned above, supra, however, it can also be considered to fulfil condition c) only where the user, who is also the creator of the NFT, generates the electronic signature by means that are controlled exclusiv by them (the signatory of the assignment). In the event of litigation, this evidence will be established through a specialist technical expert report.
Under art. 268 para. (2) of the Codul de procedură civilă (Code of Civil Procedure), where the signature is electronic, it is valid only if reproduced under the conditions laid down by law. If the court considers that the conditions for an advanced electronic signature referred to above are not met, then the document in electronic form provided for by art. 5 of Legea 455/2001 (Law no. 455/2001) will not be valid, being regarded as prima facie written evidence under art. 284 para. (2) of the Code of Civil Procedure.
D) Resale right vs. royalty
Under art. 24 of Legea 8/1996 (Law no. 8/1996), the author of the original work of graphic art or of a photographic work benefits from a resale right (at the rates established by law), representing the right to receive a percentage of the net sale price obtained on any resale of the work following its first transfer by the author, as well as the right to be informed as to the whereabouts of the work. The resale right applies to all resale transactions involving, as sellers, buyers or intermediaries, art galleries, salons, and any dealer in works of art. Art. 145 para. (1) letter c) of Law no. 8/1996 provides that the exercise of the resale right is conditional upon collective management of copyright, which can only be carried out for works previously made available to the public (art. 144 para. (2) of the law).
Furthermore, under art. 24 para. (3) of the law, copies of original works of art or photographs made in a limited number by the author themselves or with their approval (as is the case with NFT collections) are considered original works of art. This raises the question of whether NFT trading platforms fulfil the status of dealer in works of art.
On an extensive interpretation of the concept, given that platforms generally charge a certain fee for listing NFTs for trading and subsequently even for follow-on transactions, carrying out this activity on a continuous, organised basis and assuming a degree of risk, it can be considered that these platforms are dealers in works of art, requiring them to have CAEN code 4791 - Retail trade via mail order houses or via Internet included in their object of activity38.
On this view, the author of the work is entitled to benefit from the resale right for each transaction intermediated by the platform, regardless of whether they have ticked the percentage amount usually referred to on these platforms as royalty39, which represents the percentage of subsequent NFT transactions that the platform undertakes to automatically transfer to the creator of the NFT.
On a restrictive interpretation, these platforms are not regarded as dealers in works of art, but rather as online intermediary platforms, of the marketplace type, which merely match supply and demand in relation to certain digital products. Such platforms should have CAEN code 4619 - Agents involved in the sale of a variety of goods included in their object of activity40. However, in light of the case-law of the Court of Justice of the EU, in the case of Asociación Profesional Elite Taxi v Uber Systems Spain SL41, a court could find that the intermediation and facilitation activity is ancillary, with the main activity being that of trading in works of art.
- Taking a photo screenshot of an NFT legitimately created/acquired by another person and displaying the screenshot on social media without the consent of the NFT's owner. Transforming a pre-existing NFT and thereby creating another NFT. Legal consequences and remedies.
On the one hand, as stated above, copyright arises in relation to the work contained in the digital file, the NFT being merely a means of distribuire42.
Thus, among the various copyright infringements, the act of a person taking a screenshot of an NFT without the consent of the author of the work referenced by the NFT can be considered reproducere43.
Under art. 12 and 13 letter a) of Law no. 8/1996, the author of a work of art has the exclusive economic right to decide whether, in what manner and when the work will be used, including the right to consent to its use by others, including the right to authorise or prohibit reproduction of the work, subject to the exceptions provided by art. 35, 35^1 and 36 of Law no. 8/1996.
On the other hand, where the author of a work has created an NFT, and subsequently another person creates a new work consisting of a transformation of the first work and creates a separate NFT for trading purposes, the question arises as to whether this conduct is or is not in accordance with Law no. 8/1996. The analysis in fact concerns derivative works, regulated by art. 8 of the aforementioned law44.
Thus, if the derivative work is the result of an intellectual creative activity, is materialised through expression in a certain form and displays originality, with the second author imprinting the pre-existing work with the expression of their own personality, then separate copyright will arise in relation to the second work, which nevertheless depend on the will of the first author.
Under art. 37 of the law, “[t]he transformation of a work, without the consent of the author and without payment of remuneration, is permitted in the following cases: a) if it is a private transformation, which is not intended for and not made available to the public; b) if the result of the transformation is a parody or caricature, provided that the result does not create confusion regarding the original work and its author; c) if the transformation is required by the purpose of the use permitted by the author; d) if the result of the transformation is a summary presentation of the works for didactic purposes, with mention of the author” (emphasis added).
From these provisions it follows, therefore, that regula in matters of derivative works is that the author of the derivative work must seek the permission of the author of the original work and grant them remuneration for the transformation of the original work, save for the cases provided for by art. 37. Consequently, the author of the second work (the derivative work) and the owner of the second NFT must seek the permission of the author of the original work and offer them remuneration in exchange.
But if a person creates an NFT which has as its object a pre-existing trade mark, validly registered with OSIM, in accordance with the law, is their conduct in line with the law? Pursuant to art. 2 of Legea nr. 8/1996 (Law no. 8/1996), the recognition of the rights provided for in this law does not prejudice or exclude the protection granted by other legal provisions. Thus, for example, if Nike previously registered its trade mark with OSIM under the terms of Legea nr. 84/1998 (Law no. 84/1998) on trade marks and geographical indications, thereby obtaining legal protection, and another person creates a visual work which they subsequently wish to trade through NFTs, then Nike will be able to resort to the remedies provided by Legea nr. 84/1998 (Law no. 84/1998) to defend its rights.
Infringement of the rights recognised and protected by Legea 8/1996 may give rise to civil, administrative offence or criminal liability, as the case may be, in accordance with the law. Pursuant to art. 181 para. (1) letter h) of the law, the Romanian Copyright Office (ORDA) monitors, at its own expense, either of its own motion or following a written complaint, compliance with legislation in the field. Art. 188 para. (1) also provides that: “[t]he holders of the rights recognised and protected by this law may request the courts sau other competent bodies, as the case may be, to recognise their rights and establish the infringement thereof, and may claim damages for the harm caused”.
Preliminary conclusions
NFTs represent a genuine innovation in the digital world, facilitating the dissemination of art to the public through the online environment and blockchain technology, as well as fairer and more effective remuneration for creators. As shown in the first section, NFTs can serve numerous other functions, commercial or non-commercial, and can also lend a real helping hand in the charitable sphere, as we have recently seen in the context of the serious situation in Ukraine45.
It is evident that the current legislative framework needs additions and adjustments to keep pace with emerging technologies, which are becoming increasingly popular. We may hope for the wisdom of the legislator, who will understand that, in a market economy based on meritocracy, creativity represents value, and, in the field of technology, represents progress. NFTs are certainly lending a hand to the consolidation of civilisation in the digital era.
1 https://www.cnbc.com/2021/04/13/nft-sales-top-2-billion-in-first-quarter-with-interest-from-newcomers.html
2 https://cryptopotato.com/most-expensive-nfts-sold/
3https://sandboxgame.gitbook.io/the-sandbox/land/what-is-land#:~:text=A%20LAND%20is%20a%20digital,166%2C464%20LANDs%20will%20be%20available.
4 https://www.adidas.com/metaverse
5 https://www.lifestyleasia.com/bk/style/fashion/nike-metaverse-virtual-sneakers-nft-rtfkt/
6 https://www.scmp.com/magazines/style/luxury/article/3144333/louis-vuitton-and-burberry-are-diving-nfts-and-online-gaming
7 https://www.cnet.com/personal-finance/crypto/twitter-rolls-out-a-way-to-showcase-nfts/
9 https://www.investopedia.com/terms/s/security-token.asp
10 https://www.linkedin.com/pulse/nfts-keys-web3-authentication-pseudonymous-economy-misch-strotz/
11https://medium.com/@nycwatchguys/how-nfts-can-solve-authentication-why-brands-will-never-use-them-641aac7058b9
12 https://identityreview.com/10-nft-future-use-cases/
13 https://www.investopedia.com/non-fungible-tokens-nft-5115211
14The treachery of images: non-fungible tokens and copyright - Andres Guadamuz, published in Journal of Intellectual Property Law & Practice, 2021, Vol. 00, No. 0, p. 4.
15 Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They are typically used to automate the execution of an agreement, so that all participants can be immediately certain of the outcome, without the involvement of any intermediary or loss of time. They can also automate a workflow, triggering the next action when the conditions are met (https://www.ibm.com/topics/smart-contracts).
16 Andres Guadamuz - idem., p. 3.
17https://www.investopedia.com/terms/c/crypto-token.asp#:~:text=Tokens%20are%20created%20through%20an,company%20can%20purchase%20these%20tokens
18 https://dexonline.ro/definitie/fungibil
19 https://eips.ethereum.org/EIPS/eip-721
21 Andres Guadamuz - idem, p. 17.
22 Image taken from the website https://docs.opensea.io/docs/metadata-standards.
23 „Blockchain technology, virtual currencies and criminal law” - George Zlati, article published in the publication Penalmente Relevant no. 1 of 2021 dated 30 June 2021 (https://sintact.ro/#/publication/151022340?cm=SREST).
24 Definition taken from, “Report containing recommendations to the Commission on Digital Finance: emerging risks in crypto-assets - regulatory and supervisory challenges in the area of financial services, institutions and markets”, European Parliament, October, 2020, p. 2, cited in the article “Crypto-assets. Theoretical, technical and regulatory perspective” - Oana Dragomir, published in the Revista Română de Drept al Afacerilor no. 4 of 2021 dated 31 August 2021 (https://sintact.ro/#/publication/151022868?cm=STOP).
25 „Blockchains and digital assets” - Luis-Daniel Ibanez, Michał R. Hoffman, Taufiq Choudhry, University of Southampton, 2020, p. 3, cited in Oana Dragomir - op.cit..
26 Proposal for a Regulation of the European Parliament and of the Council on Markets in Crypto-assets and amending Directive (EU) 2019/1937, COM/2020/593 final (https://eur-lex.europa.eu/legal-content/RO/ALL/?uri=CELEX:52020PC0593).
27 We emphasise that the NFT, in itself, is indivisible, though there may be co-owners of it.
28 M. Of. 505 of 15.07.2011 (https://legislatie.just.ro/Public/DetaliiDocument/175630).
29 Art. 1 of Legea 8/1996 (Law no. 8/1996): „[t]he copyright in a literary, artistic or scientific work, as well as in other works of intellectual creation is recognised and guaranteed under the terms of this law. This right is linked to the person of the author and comprises moral and economic attributes. (2) The work of intellectual creation is recognised and protected, independently of its communication to the public, by the mere fact of its creation, even in an unfinished form. (3) The provisions of this law shall apply only insofar as the provisions of national legislation on the processing of personal data are complied with” (emphasis added).
30 Code, devised by a human in a programming language, may benefit from legal protection, but the “creations” resulting exclusively from the execution of the code do not benefit from legal protection.
31 For example, printing a story in a book, publishing an analysis on a website, devising a computer program in a programming language, performing a film's soundtrack on the piano, etc.
32 For example, a human being able to read the book, the analysis published on the website, the program's code, or being able to hear the soundtrack.
33 The text of the claim can be consulted at: .
34 Roc-A-Fella Records v Damon Dash, Case 1:21-cv-05411-JPC. Available at ,
35 Art. 10 of Legea 8/1996 (Law no. 8/1996): „“[t]he author of a work has the following moral rights: a) the right to decide whether, in what manner and when the work will be brought to the attention of the public; b) the right to claim recognition of authorship of the work; c) the right to decide under what name the work will be brought to the attention of the public;
d) the right to claim respect for the integrity of the work and to oppose any modification thereof, as well as any prejudice caused to the work, if it harms his honour or reputation; e) the right to withdraw the work, compensating, where applicable, the holders of rights of use who are prejudiced by the exercise of such withdrawal”.
36 Art. 12 of Legea 8/1996: „“[t]he author of a work has the exclusive economic right to decide whether, in what manner and when his work will be used, including the right to consent to the use of the work by others”.
Art. 13 of Legea 8/1996: „[t]he use of a work gives rise to distinct and exclusive economic rights of the author to authorise or prohibit: a) the reproduction of the work; b) the distribution of the work; c) the import, for the purpose of marketing on the domestic market, of copies made with the author's consent; d) the rental of the work; e) the lending of the work; f) the communication to the public, directly or indirectly, of the work, by any means, including by making the work available to the public in such a way that it can be accessed at any place and at any time individually chosen by members of the public; g) the broadcasting of the work; h) the cable retransmission of the work; i) the creation of derivative works””.
37 An electronic document, to which an advanced electronic signature has been incorporated, attached or logically associated, based on a qualified certificate that was not suspended or revoked at the relevant time and generated by means of a secure signature-creation device, is treated, as regards its conditions and effects, as equivalent to a private document bearing a signature (art. 5 of Legea 455/2001 (Law no. 455/2001)).
38 https://caen.ro/caen/4791-comert-cu-amanuntul-prin-intermediul-caselor-de-comenzi-sau-prin-internet
39 https://cyberscrilla.com/nft-royalties-what-are-they-and-how-do-they-work/
40 https://caen.ro/caen/4619-intermedieri-in-comertul-cu-produse-diverse
41 Judgment of the CJEU of 20 December 2017, delivered in the case Asociación Profesional Elite Taxi v Uber
Systems Spain SL, Case C-434/15, paras. 37-40 (https://curia.europa.eu/juris/liste.jsf?num=C-434/15).
42 Within the meaning of art. 15 of Legea 8/1996: „[b]y distribution, within the meaning of this law, is meant the sale or any other means of transfer, for consideration or free of charge, of the original or copies of a work, as well as their public offering. (2) The right of distribution is exhausted upon the first sale or the first transfer of ownership of the original or copies of a work, on the domestic market, by the rightholder or with his consent”.”
43 Within the meaning of art. 14 of Legea 8/1996: „[b]y reproduction, within the meaning of this law, is meant the making, in whole or in part, of one or more copies of a work, directly or indirectly, temporarily or permanently, by any means and in any form, including the making of any sound or audiovisual recording of a work, as well as its permanent or temporary storage by electronic means”.”
44 Art. 8 of Legea 8/1996: „[w]ithout prejudice to the rights of the authors of the original work, derivative works created on the basis of one or more pre-existing works also constitute the subject matter of copyright, namely: a) translations, adaptations, annotations, documentary works, musical arrangements and any other transformations of a literary, artistic or scientific work that represent intellectual creative work; b) collections of literary, artistic or scientific works, such as encyclopaedias and anthologies, collections or compilations of materials or data, whether protected or not, including databases, which, by reason of the selection or arrangement of their contents, constitute intellectual creations””.
45 https://www.independent.co.uk/tech/ukraine-nft-russia-crypto-airdrop-war-b2027648.html