Non-fungible tokens (NFTs) have exploded in popularity almost overnight. The rise in interest is primarily due to the high prices demanded by this technology’s works. Consequently, companies are scrambling to figure out how to leverage NFTs as marketing tools and develop new user experiences and earn income. There are many NFT-related works based on pictures and video images. A well-known person’s name, picture, or resemblance may also appear in some of the NFTs. NFTs are a popular and straightforward method for celebrities to communicate with their followers while monetizing their personality rights. An individual’s right to control the commercial use of their identity, image, likeness, or other parts of their identity is known as personality rights. The right of publicity protects a person’s image and appearance from being commercially used without their consent or contractual remuneration. For more detail consult experts like HHS Lawyers in Dubai
Right to Publicity and NFT:
A person’s right to privacy is especially important for NFTs using their picture. These kinds of NFTs aren’t uncommon. For example, the community has minted NFTs picturing Kurt Cobain’s “The Last Session” photo session and showing YouTube sensation Logan Paul on a Pokémon card. In light of the right to publicity, however, very little has been published on the legal implications of NFT minting. To prevent minting or to auction NFTs that utilize a person’s image without their knowledge and benefit, NFT developers and sellers should consider this problem while coming up with their methods.
State law protects individuals’ right to publicity, giving them the sole right to govern commercial use of their identity, including their name, appearance, likeness, and voice. Although the scope of protection varies state to state, infringement normally happens when someone else uses the perosn’s identity for commercial gain without permission.
Using a person’s name, picture, or likeness in an NFT without permission risks infringing on that person’s right to publicity. Any entity engaging in NFT trading that portrays a person may be liable since each entity may be regarded to be using the individual’s image in conjunction with a commercial purpose.
Comedy III Productions, Inc. v. Gary Saderup, Inc., a 2001 California Supreme Court decision, illustrates the outlines of how a claim for infringement of the right of publicity may be examined in NFT-specific settings. An artist (Gary Saderup) drew celebrity portraits that he subsequently replicated on T-shirts, including the famous comedy team The Three Stooges. Saderup was sued by the owner of The Three Stooges performance rights, stating that he infringed the owner’s right of publicity.
The trial court finally awarded Saderup $75,000 in damages, $150,000 in lawyers’ costs, and a permanent injunction prohibiting Saderup from utilizing The Three Stooges’ image on T-shirts or any other product he could sell or advertise. The California Supreme Court upheld the trial court’s finding that Saderup violated the plaintiff’s right to publicity on appeal. According to the court, Saderup’s artistic ability is “clearly subordinated to the overarching goal of creating literal, conventional depictions of The Three Stooges to capitalize on their fame” and “the marketability and economic value of Saderup’s work are derived primarily from the celebrity depicted.” In essence, the court found no defence for Saderup’s attempts to profit on The Three Stooges’ image. Courts may see the right of publicity as applicable to NFTs in the same way it applies to T-shirts.
Infringement of the Right to Publicity
For people who buy NFTs whose underlying work violates someone’s right of publicity, they could be held liable if they try to sell the NFT or use the underlying work to promote their business. For example, they own a valuable or desirable NFT and use it to get customers to their business. Also, it is essential to note that many states that recognize a right of publicity also protect these rights after death, such as California and New York. It means that NFTs that show dead people in the work’s underlying work still run the risk of breaking the rights of their estates and heirs. Despite this, each state has different rules about how long people have post-mortem rights and what they need to do to get those rights. For example, where the person died, where they lived at the time of their death, and all play a role.
Considerations for commercial use:
Many commercial agreements, especially in the sports and entertainment industries, include the right to publicity. The language in these agreements can be very different. People can get permission to use their publicity rights “by any means or methods now known” and “in the future,” but a clause that says the licensor has “all rights not expressly granted” may not apply to an NFT that features the person’s image. It is because the clause says the licensor has “all rights not expressly granted.”
NFT minters should look at the rights involved in their activities and carefully read the license agreement to see if any language could support or discredit their right to mint. Similarly, rights holders should look at the contracts to see if they have given their licensees the right to mint NFTs and stop them from minting or selling NFTs based on or incorporating their IP.
This article aims to provide a general overview of the subject. The information included herein may not be appropriate in all circumstances and should not be relied upon without seeking specialized legal counsel based on specific cases.