How does the NFT platform implement the work rights review mechanism?

On April 20, 2022, the case of the dispute between the plaintiff and the defendant, a technology company infringing the right to disseminate works information, was publicly heard, and a judgment was pronounced in court, and the defendant was ordered to immediately delete the "fat" published on the platform involved. Tiger Fighting Vaccine" NFT works, and at the same time compensate Qice Company for economic losses and reasonable expenses totaling 4,000 yuan.

This case has made judgments from the nature of NFT products and their transactions to the legal liability of the NFT platform. In particular, the court proposed that The NFT platform should establish a digital work rights review mechanism, So how should this mechanism be established? Let's discuss it.

First of all, we summarize the relevant issues involved in this case from the following seven aspects.

One , how do you view NFT technology and NFT digital works? We see that in the trial of this case, the court affirmed the application of NFT technology to a certain extent, and focused on guiding the pursuit of value for the good of science and technology, in regulating blockchain technology, promoting the development of digital economy, and promoting digitalization The transformation aspect has a very positive positive effect.

Second, from what aspects did this case form the judicial review standards for NFT products? We have seen that the court has boldly explored and judged many legal and judicial issues related to NFT digital works by hearing this case, clarified the legal nature of NFT digital products and their transactions, and made clear the legal nature of NFT digital products and their transactions. The legal rights and obligations of relevant parties, such as platforms, publishers, and copyright holders of works, have been clearly judged. Remarkable. This has positive significance for regulating and guiding the NFT application model and NFT industry development, and protecting the legitimate rights and interests of NFT participants.

3. What legal issues are involved in the minting transaction of NFT digital works? The court held that , NFT digital works minting and trading included three acts of copying, selling and information network dissemination of the digital works. We conclude that the NFT digital works in this case have the above characteristics, but in terms of the inherent characteristics and development prospects of NFT technology applications, the casting process may not be just copying and may also include other The use, adaptation and re-creation of original works, the sale process may be automatically executed in combination with smart contracts, and thus may have different legal properties, resulting in different rights, obligations and legal responsibilities, and may not be read and used by everyone during the dissemination process. Corresponding data, so this may not be a simple information network dissemination process, so in future cases, specific case-by-case specific analysis is required.

4. What kind of rights are the NFT digital works purchased by users? The court held that the NFT transaction model is essentially a buying and selling relationship with digital content as the transaction content, and what the purchaser obtains is a property right, not a license to use a digital property, nor a knowledge of a piece of knowledge. The transfer or licensing of property rights, the transaction object of NFT digital works is the digital work itself as a digital commodity, and the legal effect of the transaction is also reflected in the transfer of property rights. We see that the court conducted a detailed legal analysis of the relevant behaviors in the NFT digital work business link in the review of this case, and clarified that the NFT product is digital content in nature, and users have the right to the digital content. The property rights and interests of NFT products are owned by the owner of the NFT products. The NFT digital works do not involve the transfer and authorization of intellectual property rights. The transaction object of the NFT digital works is the digital work itself as a digital commodity, and the transaction effect of the NFT digital works is its The transfer of property rights, but its property rights come from the transfer of ownership of the original or copied works. The distribution of NFT digital works belongs to the right of information network communication, and the copying behavior in the work is absorbed by the information network broadcast rights.

5. How to bear if NFT digital works stop infringement? The court believes that the infringing NFT digital work can be disconnected on the blockchain and entered into the address black hole to achieve the effect of stopping the infringement. We understand that once the information of any digital work is on the chain, it will be recorded and stored on the blockchain in a tamper-resistant manner. However, due to most of the current NFT digital works, only the Token is in the blockchain. The metadata is still stored in the issuer or platform server, so what the court calls "disconnection on the blockchain" may be a requirement to disconnect the content pointed to by the NFT from the digital content stored in the corresponding server. This technical operation is possible with digital content stored off-chain. At the same time, the address is also put into a black hole, that is, the original Token is also "destroyed". If understood in this way, the above judgment of the court is very accurate.

6. What is the difference between the transaction of NFT digital works and the resale of copies of traditional carrier works? The court held that NFT digital works do not meet the principle of exhaustion of copyright. We believe that,consistent with our judgment in similar projects, if the resale distribution is aimed at the work rather than the carrier of the work, it should be considered as an infringement of the copyright of the work; If it is the specific physical and tangible physical carrier of the work, then it cannot be considered as infringement of intellectual property rights such as the copyright of the work, and it is essentially a transaction based on "things".

That is to say, the intellectual property works with the real right carrier may be applicable to the exhaustion of rights, and the copy generated by the NFT product leads to the copying and dissemination of the work, and its tangible carrier is not transferred, so the right does not apply Exhausted rules.

7. How to judge the review obligations of the NFT platform? The court held that the platform's liability boundary should be comprehensively judged in combination with the particularity of NFT digital works and the transaction mode, technical characteristics, platform control capability, and profit model of NFT digital works. We see that,Although the specific business models of each NFT platform are different in practice, and the domestic NFT platform has different business models even if it is based on the alliance chain, the court has proposed a responsibility determination framework for the NFT platform. , which is judged from the aspects of transaction mode, technical characteristics, platform control ability, profit model, etc. It is a relatively reasonable judgment framework that compares the unity of rights and obligations, and the consistency of responsibilities and risks. For example, in this case, the user uploads his own work, and the NFT platform is a network service rather than a content providing platform.

We deeply feel in the actual business that different platforms have different business models, different technical features, different platform control capabilities, and different profit models, so the legal identities of the businesses involved in the platform are different. Yes, its rights, obligations, responsibilities and risks in related businesses are also different. Some of the specific and popular indicators include, is the platform an issuer of NFT digital works? What kind of fees does the platform charge for the distribution of digital works? Are the operators of the platform and the underlying blockchain independent? Does the platform give users the authority to operate accounts on the chain? What is the actual control ability of the platform in specific transactions? The platform's processing capabilities include the ability to provide evidence, mediation and coordination when relevant legal disputes arise in the transaction of NFT digital products? The specific answers to the above-mentioned series of related questions may affect the specific legal responsibilities that the platform should bear.

Secondly, how does the NFT platform establish a digital work rights review mechanism? Let's take a scenario for a brief discussion.

Assuming that a natural person or institution (referred to as "issuer") who intends to distribute NFT digital works on the platform only holds a certain item, how to review the rights of the work is carried out in the following cases Discussion:

Whether the issuer uses the items it holds to generate digital material works for creation or NFT digital works needs to obtain third-party authorization, depending on whether the ownership of the items it holds has rights flaws and the related rights involved in the digitization process.

Whether the items held by the issuer also involve other rights, such as photos or manuscripts, etc., and other civil rights such as copyright and other intellectual property rights and portrait rights are attached to the items. When creating an NFT digital work, the issuer should obtain the authorization of the corresponding right holder's copyright and other intellectual property rights and portrait rights and other civil rights.

In this case, before the issuer creates and distributes NFT digital works for the held items, it shall obtain the authorization of the third party with intellectual property rights such as the copyright owner and other civil rights holders such as portrait rights holders.

If the items held by the publisher do not involve intellectual property rights such as copyright or other civil rights such as portrait rights. This issuer does not need to obtain third-party authorization, and does not involve the original right holder at this time. In this case, the platform should make a clear and specific agreement on the relevant rights and obligations with the issuer according to the following different situations by entering into a corresponding NFT digital work cooperation agreement.

(1) Whether the issuer's ownership is flawed. The platform needs to conduct a formal review of its ownership, and requires the issuer to prove the legal origin of the items it holds and the legal status of its current holdings. The authenticity of the thing is proved and whether it can be freely circulated to confirm.

(2) After the issuer digitizes the items it holds, whether there are copyrights and other intellectual property rights for the generated basic material works. If a third party owns the copyright and other intellectual property rights of the digitized work, the publisher shall obtain the authorization of the copyright owner of the basic material work and other intellectual property rights when submitting the basic material work.

Author: Zhang Feng, partner of Wanshang Tianqin Law Firm, director of Wanshang Tianqin Digital Legal Professional Committee, expert of think tank of Shanghai Blockchain Technology Association.

source: How does the NFT platform implement the work rights review mechanism?