No NFT-Specific Legislation Coming To The US Yet

A report by the United States Patent and Trademark Office (USPTO) and the U.S. Copyright Office has found that current intellectual property laws are equipped to handle copyright and trademark issues in the non-fungible token (NFT) domain. 

Today, @USPTO and @CopyrightOffice published the results of our joint study on the intellectual property law and policy implications of non-fungible tokens (NFTs). Learn more and read the report: https://t.co/HBy2tNB7Qk pic.twitter.com/IrhynPLWo6

— USPTO (@uspto) March 12, 2024

This conclusion was part of a 112-page study initiated by Senators Patrick Joseph Leahy and Thom Tillis in June 2022 to explore the effectiveness of existing legislation in addressing the challenges posed by NFTs.

The investigation included three public roundtables and an open call for stakeholder comments, revealing a general agreement on the adequacy of current laws despite prevalent trademark infringements on NFT platforms. The report shared this view, suggesting no immediate need for changes to intellectual property legislation or the practices of the USPTO and Copyright Office regarding NFTs.

Stakeholders expressed concerns about the potential stifling effect of NFT-specific laws on the technology’s development and highlighted issues with trademark misappropriation by bad actors in the NFT space. According to some inputs, these actors exploit consumers’ personal information, prompting a call for the offices to consider these risks.

The U.S. regulatory stance on NFTs has been somewhat uncertain, as illustrated by the SEC’s action against Impact Theory in August 2023 for selling NFTs under promises of profit, thus treating them as securities. This case ended with the company setting up a fund to reimburse investors and paying a $6.1 million fine. However, the broader regulatory approach to NFTs remains undefined.

The report also mentioned the lack of clear judicial precedent regarding enforcing trademark registrations for physical goods against similar digital goods associated with NFTs. 

Meanwhile, the NFT market continues to face challenges, with a noted decline in the sales volume and falling floor prices of essential collections despite recent upticks in Ether prices.