Intellectual property issues for nostalgic NFTs

Non-fungible tokens (NFTs) create new economic opportunities in old and familiar spaces. To capitalize on the current popularity of NFTs, some retailers are turning to the timeless art of nostalgia: reworking old media or products in an NFT collection to advertise a brand in an online space or attract new attention (and customers) to a vintage product.

An NFT has a unique digital fingerprint that is transparently recorded and stored on a blockchain. Once registered, an NFT is immutable and can therefore represent ownership of a single item. Along with the Metaverse and other Web3 resources, NFTs are rapidly penetrating many aspects of the global economy.

For retailers, NFTs offer a new way to package and sell retro media. Due to their unique, non-replicable, and transparent nature, NFTs naturally provide rare and easily verifiable collectibles. And recent consumer trends show a strong interest in media from the 1980s to the early 2000s.

For example, Nickelodeon released an NFT collection featuring familiar faces from decades-old cartoons. Hi Arnold! and Rugrats.1 The collection features the faces of animated characters wearing different costumes and expressions referencing familiar episodes.2 Nickelodeon’s NFTs are particularly aimed at consumers in their late 20s and early 30s who were kids in the 1990s and early 2000s. Now adults and generally tech-savvy, those consumers could be the audience ideal target for a variety of nostalgic NFT collections.

Other nostalgia-based NFT trends point to a potential new way for retailers to rework old media in the Web3 space. Relics of the era of analog technology have seen a remarkable resurgence, even among Gen Z who weren’t around for such technology. Vinyl records have rebounded from disastrous sales in the early 2000s to selling over 40 million LPs in 2021.3 Perhaps even more surprisingly, cassettes have doubled in sales over the past few years.4 In digital media, Disney has seen huge returns on its modern remakes of animated classics like Aladdin and The beauty and the Beast.5 Even outside of the world of remade and repackaged media, new movies and TV shows take inspiration from the 1980s: stranger things, Dark, Chernobyl, The Goldbergs, Americans, Cobra Kai and GLOW are among the most popular.

NFTs focused on vintage products can come with established customer bases and not require the investment in design and development that is typically required to bring the products to market. Thus, retro-NFTs could create revenue streams without consuming resources that can instead be focused on creating and marketing new products. Retailers could be looking to ride this wave of nostalgia by offering NFTs for sports memorabilia, art, and apparel, and in some cases already are.6

From an intellectual property (IP) perspective, creating retro-NFT alerts other retailers and the public and can prevent misuse of the retailer’s brand, vintage products, and intellectual property rights. As NFT creators continue to push the boundaries of creativity, it is important that retailers monitor the market, do what they can to prevent diversion and detect suspected infringement early, and be aware of potential licensing opportunities. .seven Older media and products are more prone to inadvertent misappropriation, as many creators will not remember media or care to avoid misuse. Publishing older media and promoting older products in new ways can help mitigate these risks and establish brand credibility in the NFT market.

Retailers should carefully monitor developments in NFT markets and determine whether their products or services can be sold as NFTs. This is especially true for retailers with a large current or past public presence. In addition to the economic opportunity, retailers should also be aware of the intellectual property benefits that come with issuing NFTs.



FOOTNOTES

1 https://opensea.io/collection/nickelodeon-rugrats-heyarnold-eth.

2 For example, see Arnold’s Hi Arnold! wearing a banana suit, a reference to the series premiere: https://opensea.io/assets/ethereum/0x223e16c52436cab2ca9fe37087c79986a288fffa/5.

3 Richer, Felix. “The vinyl comeback continues” Statistical, https://www.statista.com/chart/7699/lp-sales-in-the-united-states/January 12, 2022.

4 Morris, Chris. “Gen Z nostalgia strikes again, as cassette sales show signs of becoming the new vinyl” Fortune, https://fortune.com/2022/07/21/cassette-tape-sales-doubled-gen-z-nostalgia-trends-vinyl/July 21, 2022.

5 Whitten, Sarah. “Disney’s remakes have grossed over $7 billion worldwide since 2010” CNBC, https://www.cnbc.com/2019/07/26/disneys-remakes-have-made-more-than-7-billion-globally-since-2010.htmlJuly 27, 2019.

6 Williams, Alex. “Nike sold an NFT sneaker for $134,000” NYT, https://www.nytimes.com/2022/05/26/style/nike-nft-sneaker.htmlMay 26, 2022.

seven Brittain, Blake. “Hermès ‘MetaBirkins’ NFT Lawsuit Can Go Forward, Judge the Rules,” Reuters, https://www.Reuters.com/legal/litigation/hermes-lawsuit-over-metabirkins-nfts-can-move-ahead-judge-rules-2022-05-05/May 6, 2022.

Copyright © 2022, Hunter Andrews Kurth LLP. All rights reserved.National Law Review, Volume XII, Number 214

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