NFT Intellectual Property and Copyright 4 — Questions and Answers
Question 1: Which U.S. federal agency handles copyright registration for digital artworks including NFTs?
- U.S. Patent and Trademark Office (USPTO)
- Federal Trade Commission (FTC)
- U.S. Copyright Office (USCO) (Correct answer)
- Securities and Exchange Commission (SEC)
Correct answer: U.S. Copyright Office (USCO)
The U.S. Copyright Office, a part of the Library of Congress, manages copyright registration for all creative works including digital art.
Question 2: If an NFT project's smart contract automatically pays royalties to the original artist on secondary sales, what legal concept does this reflect?
- Droit de suite (resale royalty right) (Correct answer)
- First sale doctrine
- Work for hire
- Compulsory license
Correct answer: Droit de suite (resale royalty right)
Droit de suite gives artists a right to a percentage of resale proceeds; NFT smart contracts can enforce this automatically on-chain.
Question 3: A digital artist discovers their work was minted as an NFT by someone else. Which is NOT a valid legal remedy available to them?
- Seeking a court injunction
- Claiming copyright infringement damages
- Demanding the blockchain delete the transaction (Correct answer)
- Issuing a DMCA takedown on the marketplace listing
Correct answer: Demanding the blockchain delete the transaction
Blockchain transactions are immutable and cannot be deleted by courts or rights holders; remedies focus on marketplaces and downstream distribution instead.
Question 4: What is the significance of copyright registration for an NFT artist pursuing infringement litigation in the U.S.?
- It is legally required to own a copyright
- It enables the artist to seek statutory damages and attorney's fees (Correct answer)
- It transfers the copyright to the government
- It automatically removes infringing works
Correct answer: It enables the artist to seek statutory damages and attorney's fees
Registration before infringement (or within 3 months of publication) allows the copyright holder to pursue statutory damages up to $150,000 and attorney's fees.
Question 5: Which term describes artwork whose copyright has expired and is freely usable by anyone?
- Open source
- Fair use
- Public domain (Correct answer)
- Creative Commons licensed
Correct answer: Public domain
Public domain works are those whose copyright has expired or was never established, making them free for anyone to use without permission.
Question 6: An NFT marketplace hosts infringing artwork. Under which legal framework might the platform avoid liability?
- The DMCA safe harbor provisions (Correct answer)
- The Patent Act
- The Lanham Act
- The Sherman Antitrust Act
Correct answer: The DMCA safe harbor provisions
DMCA Section 512 safe harbors shield online platforms from copyright liability if they promptly remove infringing content upon notice.
Question 7: What is meant by 'split royalties' in an NFT smart contract?
- Dividing the NFT into multiple tokens
- Automatically distributing secondary sale proceeds among multiple rights holders (Correct answer)
- Splitting copyright ownership between creator and platform
- A tax on NFT sales
Correct answer: Automatically distributing secondary sale proceeds among multiple rights holders
Split royalties in smart contracts programmatically distribute a percentage of each resale among designated parties such as creator, collaborators, and charities.
NFT Intellectual Property and Copyright 4
Which U.S. federal agency handles copyright registration for digital artworks including NFTs?