On demand 1h 2m 32s Intermediate

The Metaverse: Go Boldly Where None Has Gone Before—Intellectual Property Meets Augmented Reality and Web3

4.9 out of 5 Excellent(17 reviews)
Start your free 7-day trial
* Claim credit(s) for one free course during your 7-day trial.
  • Credit information
  • Related courses

The Metaverse: Go Boldly Where None Has Gone Before—Intellectual Property Meets Augmented Reality and Web3

“The metaverse is the new virtual and visual frontier, a user-interactive digital environment based in computer-generated spaces of augmented and virtual realities in which visual imagery predominates, cryptocurrency is lucre and NFTs are fashion and decor." 1 The technology is new but the legal rights regulating imagery and art are not new-- copyright, trademark, publicity rights. We will discuss art, sports, entertainment and rap examples of how rights owners, including Quentin Tarantino and Pulp Fiction, Andy Warhol and Prince, rapper Lil Yachty, heirloom and iconic brands like Hermes, Patek Philippe, Cartier and Bulgari, are asserting their claims and defenses in the metaverse world of appropriation. This presentation connects the Andy Warhol fair use case [Section 107 of Title 17 of the US Code] before the U.S. Supreme Court with appropriation concepts in metaverses and NFTs and other appropriation types of litigation in copyright and trademark infringement, publicity rights, unfair competition. Participants will gain a general understanding of what they need to know in this evolving technology space to ethically and responsibly advise clients in a climate of rapid change and inconclusive precedent.

Transcript

- Welcome, I'm Alexandra Darraby and I'm going to do a program today on behalf of Quimbee called The Metaverse: Boldly Go Where None Has Gone Before. The presentation is supported by written materials and my bio is in the materials, so there's no need for us to spend some time on it now. But you will see that I have written a lot on this topic of metaverse, non fungible tokens and appropriation. The three objectives that we've had for the learning program today. This is the treatise that I have been author of for 25 years, it had its anniversary edition. It also includes a lot of technological material. It's titled "Darraby on Art Law". And the reason I mention it here, because if you are registered with Quimbee, the publisher, Thompson Reuters West provides a discount to attendees and the discount code is provided. It's also in some other places. I believe it's on one of the bios. So our topic today involves metaverse and non fungible tokens, and I thought it would be a good introduction to look at Facebook's rebrand under Mr. Zuckerberg because in 2021 he decided to rename the corporate entity, Meta, Meta as in metaverse. And I think before we actually get into the substance of the program, it's interesting to pause here for a moment because this slide encapsulizes so many issues that have to do with non fungible tokens, technology, lawyers, and metaverse. So for one thing, we're going to be talking in the cases today about trademark. And this is a trademark that is owned by what was formerly Facebook by the corporate entity and logos. And you can see to the left of the word Meta is the logo, kind of the infinity logo that they applied for and received from the United States Patent and Trademark Office. And another reason we pause on this slide is that this area of metaverse, NFTs, technology is so dynamic, fluid, innovative, exciting, interesting, but it has on its other side a reason for lawyers to give pause. Because the technology is so innovative and involves so many architectural technological levels, it is not clear what the laws are, whether they are existing laws or whether Congress is legislating new laws to incorporate some of these aspects of the technology. So we have to be careful as lawyers that we, as we will see in the ethics part of the program today, that we are giving the appropriate advice and communicating the appropriate content to the clients. So heads up, this is an area that's in big change and the reason I put Meta up is that last year I was invited to do several different lectures and I proposed metaverse and no one knew what it was until Facebook and Zuckerberg decided that they would publicly announce the rebrand of Meta. And between November, 2021 or the fall of 2021 and today, which is only a few months, everyone or almost everyone has heard or knows the term metaverse. So again, we're not talking about things changing over years or decades. We're talking about things changing over months and sometimes weeks. So if you're practicing in this area, you have to be extremely flexible and agile to deal with the changes. And the other reason we give pause on this slide is that everywhere you will see the metaverse, metaverse is not a the. There are many metaverses. In fact, there are an infinite number of metaverses. Facebook does not own the metaverse, as some people said when this was announced in fall 2021. And in fact, Quimbee could create its own metaverse. They could create a metaverse with me, they could create a metaverse with their attendees. So sometimes you'll see, even in my program, you'll hear the term the metaverse, editors and simplification. Different publishers want to simplify it, but you should know as attorneys that there is no single metaverse. And our last point, as lawyers, we need to know that no one owns the metaverse. So it is not proprietary to Facebook or the rebrand Meta. It is not proprietary to any one entity or any one individual. So today's program involves a bird's eye view of this quite complex area. And we're going to go over the law, some basic ABCs of intellectual property that can reduce down several years of law school and practice into three or four slides. We're going to concentrate on federal regulation because we're all in different states and under jurisdictions. But I am going to give you a heads up on some state law issues. We're going to look at the NFT examples. Again, if you're not familiar in this area, NFT is non fungible token. And then we're going to look at how do NFTs relate to the metaverse. And finally we're going to look at some actual disclaimers and warranties, which should give attorneys more of a heads up as to how alert we need to be in this area with respect to our representation of our clients. Again, implicating the ethical practices, which I'm going to discuss. And at the very end I'm going to highlight a couple of cases that illustrate how these NFT metaverse brands, I just showed you the Facebook's new brand. I showed you both the logo and the trademark. And I had at the top of the slide branding rebranding. We're going to talk about how these issues come up in the cases and how they're defended against. By the way, those cases are in the article that was provided as part of your CLE material. I think the article is also called Go Boldly, Where None has Gone Before, which was written in February, 2022. So here we have the core of what we are going to discuss today. And whether you're an IP lawyer, whether you're not an IP lawyer and just wanna be informed on this topic or whether you just want to sort of know this because you see it in the media and in the blogs and you plan to go post pandemic to cocktail parties and just wanna know about it. Here we have what I call the big four. On the left is the US Constitution, whether you're in law school or a lawyer, you all know what that is. Next to it, we have the Bill of Rights from which we extract for our purposes the First Amendment. It's gonna be part of our discussion. And next to that we have Title 17 of the US Code. The US Code is federal statutory law. Title 17 is copyright law. Part of of this area of using content is copyright. And next to that we have the US Code, Title 15, which is Federal Trademark. Federal Trademark statutory in the US Code. So these items are the core of both are ideas about federal content in NFTs and the metaverse and in terms of the case law, and to make sure that for pedagogical purposes that you all remember this in case you are not practicing in the IP area, I call this the big four. Four ACEs is as you know, best of a kind, best of four for any pairs and any four of a kind in poker. And the big four are just what we discussed, the US Constitution, the First Amendment, Title 15, federal trademark and Title 17 federal copyright. And I should say when you look at the big four, it's important for lawyers who do not practice in this area to know that Title 17 federal copyright is constitutional. One of the big fours is the Constitution. Federal copyright is constitutional. Federal trademark Title 15 is not constitutional. And in fact, many states have their own trademark laws, which sometimes are called baby trademark. Baby trademark laws. Want you to keep this big four in mind as we go through the program. And as you yourselves go to analyze the cases, think of having a hand of four aces. And as you read the cases, what are the claims and defenses? So here we have all of the things that can apply for purposes of our bird's eye view of federal regulation, of this NFT area of preexisting content. So it says the basic ABCs of copyright and trademark. And it says if you own a copyright or trademark, what is the legal use of creative content? Of course there are exceptions I reduced this down for you so we can get through this complex area, but this really does cover it all. So one, you can own it. And for the first set of items on the PowerPoint or the slide pack, I'm going to tell you that we're dealing with the copyright. And on the right I put two of the aces we saw in our pack the Constitution and Title 17 of the US Code. You can simply own the copyright, two, you can license the copyright. So let's say you're an owner of a copyright on, it can be an artwork, it can be anything that's copyrightable, it can be film, it can be a book, it can be music. And you decide you've had enough between the pandemic and supply chains, you're going to Tahiti, you still own that copyright. You own it for life plus 70 if you're an individual, you own it for a longer time if you're a corporate entity. And you're sitting in Tahiti and someone comes along and says, your creative content is so fantastic, we want to license it license the second thing on the PowerPoint slide, we wanna license your content and we're gonna do it in so many territories. So we're gonna pay you so much as a royalty. And you say, you know what? I'm done with legal regulation. I'm sunbathing in Tahiti and I'm on the beach and I really don't want to get involved in contracts and hire lawyers. And I'm not going to license it to you even though you think it's so great. As the copyright owner, you're entitled to license it or not. So we're still under the constitution, and Title 17. So they go away and a few months later you get another call and you're still on the beach sunbathing in Tahiti and scuba diving. And they call and they say, okay, we get it. You don't wanna get involved in contracts and licensing agreements but just authorize us. Just tell us it's okay to use your incredible creative content. We're gonna develop these amazing NFTs and we're gonna launch them in the metaverse and we will still pay you what we agreed we would pay you under the license, we'll pay you. Your accountant's can expect inspect our revenue and it's not a problem. Just tell us it's okay. And you decide you don't even wanna deal with anyone, you love the life you have, you have a long time to exploit the ownership of your creative content. And you tell them, no thank you. I'm not gonna authorize it either. I'm scuba diving, please go away, don't call me, I'll call you. And a couple more months pass. And you get a text or an email from someone who you haven't ghosted on your system and they say, guess what, your creative content is all over. If it was music, it's all over Spotify and Pandora. If it was a film, it's all over HBO Max or some film distributor, whatever it is. They tell you, hey, your content is out there. And you go look it up and you say, oh my goodness, I told these people I wouldn't license it. I told these people I didn't authorize them to use it. How can they be using my creative content? And the answer to that again is in our big four, we're gonna use three of the aces that I put up in my hand of four aces because there's something in Title 17 called fair use. Fair use. And since I've used the word appropriation a couple of times and I've said this NFT world involves appropriation, fair use means under Title 17 and the Constitution that you can use creative content, someone else's creative content, not yours under certain rules that are in the statute. And why have I put slash the First Amendment next to the words fair use? Because in copyright, there is no First Amendment defense, repeat, there is no First Amendment defense. But I've just said there is a fair use defense. Yes, fair use is an affirmative defense, but it incorporates what Congress believed were First Amendment concerns in this country. As I told you, Title 17 is based in constitutional law. Article one, section eight, clause eight was in the slide. So we have this situation where now our friend in Tahiti has to go find a lawyer, an IP lawyer, perhaps my firm or your firm, and say, hey, did these people really fairly use, do they really have a defense what did they use? This is a different lecture for Quimbee, but that would be their defense if you didn't license them and you didn't authorize them and they're still using your creative content. Do they have a fair use affirmative defense? So I always get this question and I'm gonna preempt the question and the question is, but hey, the creative owner of the copyright said, no, I'm not licensing and I'm not authorizing you. So how can they use fair use? And the answer is, it does not matter. It does not matter. Now, there are certain good faith, bad faith arguments again beyond our topic today. But basically you can be as a user of preexisting creative content, if you have a true fair use defense, it does not matter that you were not licensed or authorized to use it, that's what the fair use defense is. And finally, we have this arena that's as large perhaps as the metaverse, and it's called the public domain. Public domain is an international concept. It's not something just for United States or Title 17 or the Constitution or the First Amendment. And when copyrighted material goes into the public domain, it's free game. There are again, exceptions to this because certain things can be restored under, it's quite complex, but ordinarily things in the public domain can be used. So I said the first couple of things on the slide involve copyright, and now we wanna switch to trademark because I said trademark is part of this intellectual property area for non fungible tokens in the metaverse and in trademark, we do have a First Amendment defense. There is actually a fair use in trademark that is a law that's being developed. So we do have a First Amendment defense. We do have a fair use defense. What are other ways we can use someone else's trademark that they own? If the trademark has been canceled, if the trademark has expired, the trademark is dead, then other people can go in and use the trademark. Mr. Zuckerberg's attorneys, when they switched from Facebook to rebrand to Meta, you might say to me, oh, are they going to now let other people use Facebook or are they going to allow Facebook to expire or somehow be canceled or die out? The answer is, of course not. They have vehemently and appropriately made sure they maintained their rights in Facebook as well. And finally, I have at the bottom, you may wonder why I've put this example of the speeding ticket. And the reason I have the speeding ticket is that there may be appropriators listening or you may represent appropriators and they say, hey, we've been ripping people off for, you fill in the timeframe, weeks, years, months, decades. And we've never been caught. And I used used to give this to my law students because in California we're quite automobile based. People are driving all over the place. And you can be on a freeway in Los Angeles and be exceeding the speed limit. And if the California Highway Patrol pulls you over and you say, Mr. Patrolman and everyone was going over the speed limit as was I, what is the big deal? You are the one who's caught and that is not a defense to your speeding ticket. So the issue is not that this happens, yes, I'm very aware it happens. The issue is what happens if you are caught and someone decides to enforce whatever against you? In our case, we're talking about civil litigation and people suing for trademark infringement or copyright infringement. So on the learning objectives and on the slide pack you saw earlier it said we would move to what are non fungible tokens? What are the examples of preexisting creative content? And I've given you here a list and there are many more things that I have. If you read the article that is part of the CLE materials, you see I've included other things. But let's start with this list. So artworks, the big NFT that made everyone aware of what an NFT is or was, they preexist what happened in 2021? But it was an artwork called in short 5,000 Days. And it was done by kind of a graphic designer tech person, and it sold through an auction house for $69 million, which included some auction fees and so on. And let's call it 70 million, it's easier. And this got the attention of everyone because even in an inflated state of markets, $70 million is nothing to turn away from. And it actually surpassed the media coverage of this NFT sale of a piece of digital art for $70 million surpassed the media coverage of the pandemic, which by that time was had already gone through some 12 months. So it really captured the imagination. So it can be artwork and NFT but I've just explained to you that NFTs can be any preexisting content and they can source to trademark, Title 15 logos and trademarks. You can use those and we're going to see examples of them used as NFTs. It can be slogans and mottoes, it can even be tweets. We're going to see another example of that momentarily can be movie scripts and promotional materials. And I think I included in the article the story of Quentin Tarantino and the famous movie called "Pulp Fiction" cult movie at this point, and how movie scripts and promotional materials have been used as NFTs. It's in the sports world. There's a lot of litigation going on right now about persons who bought NFT sports cards, cards of their athletes or digital signatures of athletes. Tom Brady and others have launched metaverses in which athletes are signing memorabilia. These are all NFTs and they're being sold to people who want to purchase them. It's crossed into the fashion world. It's even hit the core of America's diet, pizza. See examples where Pizza Hut tokenized and made an NFT of the pizza slice. It's been heralded as Pizza Hut's very first digital slice of pizza. It's even made it into our intimate spaces of like British people call it the loo or the lav. It's made it into our bathrooms and toilet paper by Charmen, it's been tokenized as NFTs and it's also celebrities and athletes. I've mentioned that. And although I'm only focusing today for purposes of this presentation on federal regulation, I did say I would bring your attention to certain states' rights. And there are rights in about a third of the states that are called publicity rights. In California, we call them celebrity rights. And these state rights give an economic right in your image, your likeness, your voice, your portrait, and so on. So when you see some of these NFTs that have people in them or personages in them, those persons may not only have rights under the big four or pack of four aces but they may also have rights under state law. And you will see in some of the complaints that I have discussed in the CLE materials, I provided that in fact, people who were suing on their content and saying you have infringed my copyright, you have infringed my trademark. They are also saying you have violated my publicity rights. And similarly for the rest of us who are not so famous as individuals, we have privacy rights. These are also state rights and some of the litigation involves those rights as well. So I now we are going to sort of get really deep into the NFT and the metaverse space. I'm showing you here a fashion icon. It's from the French House, the famous house of Hermes and it's called a Birkin bag. Now if you are into fashion, no matter what your gender orientation, you may know what this is, but if you're not, I'm going to fill you in. This is a essentially a purse that is artisanally crafted, handcrafted in France, and it goes, it sells for the tune of $10,000, $15,000, $25,000. And according to Hermes, even $100,000. So these are not, you're a guy or not so interested in fashion. You may say, Alexandra, this is a purse. Yes, it's a purse, but it's a legacy purse if you want to put it that way that is unbelievably iconic and expensive. And Hermes in its complaint said that even during the pandemic when many things had shut down that they had a huge long waiting list to get, order one of these purses, they do go on at auction and they, you can look up the auction results. So the reason I show this to you, because this is a real purse and now I'm going to show you something else. And so I think I've made the case for luxury goods because I think most people would consider a purse that's $10,000, $15,000, $50,000 or $100,000 much a luxury good. And here I have the Meta Birkin NFT and you are going to say, well, except for some coloration, it looks pretty much like the bag or the purse you just showed me. And you might even say, my goodness, it's actually identical to what you just showed me. And there's the Birkin trademark, there's the Birkin logo. That is by the way, Hermes' logo for Birkin. And you can see on the right, and I'm not sure if some of the other slides, I'm not sure if we included them or not, but the Birkin trademark and the Birkin brand and the Birkin logo was used over these. So these are NFTs, well these are prepared by an artist who has no relationship to Hermes, he's not part of the family or the corporate entity. And he thought it would be a lark to tokenize the Birkin bag and used the Birkin mark over the bag and he opened up a website and a blog and a handle and a Facebook and Twitter and a variety of different social media platforms and internet platforms to market these as artworks, he's an artist and to say buy these NFTs, they're Meta Birkins and some of them he has different names for different lines. And what you are seeing is, I think I have this on the next slide. Alright, well before I tell you what that is, I mentioned that tweets are, have also been tokenized as NFTs. And this is kind of an interesting example to go back to how fluid these markets are. So when Twitter was set up, Jack Dorsey who founded it, did the first tweet he claims in March of 2006. And you can see I put the tweet up here and it says, just setting up my Twitter, just setting up my Twitter. And then some 14 or 15 years later, Dorsey tokenized his tweet and he sold this NFT of his setting up his Twitter account for $2.9 million, and he added his digital autograph. I gave you an example before of athletes and other people selling as NFTs their digital autograph. And in March 2021, which is not that long ago, about a year and a few months ago, he sold it for almost $3 million. And the person who bought it is someone involved in the blockchain, which is part of this metaverse NFT. We have to relate these two, which we will do shortly. And he wrote, when he, by the way he has a self-interest in making sure that the NFT market is strong because it's paid for in something called crypto, cryptocurrency, which gets recorded on a blockchain. So as lawyers that should start giving you clues and alerts. And he wrote, this is not just a tweet. And what he's talking about is the words just setting up my Twitter that I've put for you on the top. This is not just a tweet. Years later people will realize that the value of this tweet is like the Mona Lisa, is like the Mona Lisa. So I don't know you, and I'm not sure what you think of Leonardo Da Vinci, but I am sure you have heard or seen the Mona Lisa. And one might give pause to whether one the words just setting up my Twitter rise to the level of the Mona Lisa, regardless of what your feelings are about that particular painting. And I thought as the film or the sequel to this discussion that the platform that sold the tweet for $3 million just a year ago, one year later closed, the platform was shuttered because as the CEO of the platform publicly stated it was so beridden with fakes, with people claiming that they own this preexisting content. Remember four aces claiming they had a trademark or a copyright or some constitutional right to use the content. And in fact they didn't and there were lawsuits being filed. And so the platform itself shutter. And if you remember when I showed you the Meta logo at the very beginning, I said, this is a very fluid dynamic, exciting, innovative, interesting area. But as lawyers, we have to be able to keep up with what's happening and communicate appropriately with our clients because you can see in a very short time span, it went from a tweet to something worth $3 million and then it sort of disappeared from the landscape, from the technological landscape. So, and this is what we are dealing with right now because all of these non fungible tokens, all of these NFTs, the tweet, the pizza slice, they are all binary systems. They are cryptographic, all right, there's no substance to them. So I've given you some examples to ratify this for people who find it odd and difficult to wrap your head around, people paying $70 million or $50 million or buying those Meta Birkins for tens of thousands of dollars, not the purse that I showed you, but the NFT of the purse. So on the pizza, don't bother to say hold the tomato sauce or hold the anchovies because there is no pizza there. It's completely digital. What Pizza Hut sold as an NFT was digital. The toilet paper I referred to earlier, I thought Charmen was quite clever. They called it NFTP as a non fungible toilet paper, but it was marketed as something to put in your loo or your lav to enhance your experience. Again, I think I've quoted exactly what the advertisement campaign was. It's not something that would be functional. I can't drill down anymore into that, you can use your own imagination. "Pulp Fiction", we're going to discuss that script. What Quentin Tarantino was offering people who wanted to purchase an NFT was not his original script, it was an encoded cryptographic digital image of his script. The Meta Birkin bags we've already discussed. And the 5,000 Days, as I've explained to you, were just digital images. Now what rights come with those NFTs varies we're going to see is the lecture continues that NFTs one size does not fit all. Told you there's an infinite amount of metaverses and there are multiplicity of ways things can be tokenized, marketed, promoted, and sold. So one person getting an NFT of pizza may not be the same rights as someone getting an NFT of "Pulp Fiction". Important for lawyers to know. I've set you up for this slide and it's an important point to understand. All NFTs are not the same. I mentioned earlier in the presentation that the architecture of this technology is quite complex and layered. That is a series of lectures onto itself. You just need to know that it is that way. And as it says right here, different vendors, different sellers, different platforms, different auctions, programmers, cryptographers and tokenizes do it differently. So there is not only one way. So what do we need to know as lawyers that the promotional part of selling the NFT is not necessarily what you get when you buy an NFT. So your client may call you up or text you and say, oh look, I've seen such and such actor or such and such athlete, such and such company or such and such artist is selling this NFT and there's gonna be an auction and I wanna buy it and look at the promotion, it looks fantastic. What is in the promotional content is not necessarily what you are getting either literally in terms of what it looks like or in terms of the rights you're going to get. So as an attorney, you need to make sure that your client, whether he's the seller or the buyer or doing the promotional offer or launching the platform, is making clear through warranties, disclaimers, contractual terms, what we call terms of service, TOS, sometimes you'll see them called terms of use that everyone is communicating so that it is understood what's being bought and sold. I think some of the lawsuits we see today are because there was no clarity and people did not understand the technology and they were putting in millions and millions of dollars and they weren't sure what they were getting. And in fact what they were getting was a digital image that could be publicly available on the internet as 5,000 Days was for a period of time. The next practitioner alert and here's the core of our content, the person selling the NFT does not necessarily own the content or the image that's in the promotion for the NFT, repeat that they may not own the trademark or the copyright. Now I did say there are defenses, but that means you have launched into a litigation arena and it depends on the risk you have, whether you want to go forward without authorization or license to use preexisting content. Because if you don't own it and you are economically exploiting it as an NFT and you are marketing and promoting it and belongs to someone else, that someone else or that entity else may not be very happy about it. Remember our friend who was scuba diving in Tahiti who didn't wanna be bothered with all of this was suddenly quite bothered when he saw that he wasn't getting any revenue at all and that his work after he said do not use it, I don't authorize you, they were using it anyway and saying that was fair use. So we have to ask whether we're representing the platform, the buyer, the seller, whoever we're talking about in the chain, whose rights are at issue. And finally, the other practitioner alert for right now is that attorneys need to understand the technological environment of the NFT and the metaverse. There are no materiality and there are no goods or products involved with minor exceptions. It says right here on the slide with minor exceptions. So most of these things, as I told you with the pizza, don't bother to hold the tomato sauce because there is no pizza that is being sold. And for most of these things that there is no actual object or something that has what we call in the art world, materiality. And I did mention in the very beginning as a prelude so we could all be on the same page for this presentation, that there is no single metaverse. Similarly, there is no single blockchain. And just to fill in the gaps once more, what happens with an NFT is it is tokenized. That is a technological process if you wanna try it. There are several DIY, do it yourself sites on the internet and you can try to tokenize your own content and go through the steps and so on if your computer has the technology to do it and you get enough software and apps, you can do it. So there is no single way to tokenize and when the NFT is sold, it is sold on something called a blockchain. There is no single blockchain I showed you that the purchaser of Jack Dorsey's tweet owns a blockchain, one of the many blockchains. And it is good for his business for people to be tokenizing and recording these NFTs on the blockchain because there is a fee and a charge every time this happens. And so people who own blockchains make money when people use their blockchain to record the token. And the token is paid for in cryptocurrency. I mentioned that. The person who purchased the 5,000 Days for 69 million plus he is a crypto manufacturer. So again, if the crypto market is strong, it benefits his company. And I've said there's no single metaverse. And to just give you an idea about the back end of how this is all working, I have a slide here that tells you not only is there no single blockchain, but there are all different kinds of blockchains. I haven't listed them all for you, but there are public ones and even the public can be permissionless or permissioned. There are private or managed blockchains, there are consortium blockchains, there are hybrid blockchains, there's other kinds of blockchains. So my point being, when a fireman sees flames coming out of a building, he doesn't just rush in or she, he or she makes a risk assessment to himself and his team and to the potential of life in that burning building. And he decides before he just rushes into the burning building what the plan is. And so by telling you these things, my point is as you're representing clients and you have a greater awareness of this, or even if you're not directly their IP lawyer, but they are asking you questions about this, you are not going to give a rush of words about what they should do or shouldn't do or how to do it. But you're going to remember that like the fire persons male or female before you run into a burning building, you do sort of a risk assessment and you understand the terrain and the exposure and you have a plan so that you are getting a successful result and not one that burns to the ground. So the need to know basis in this area is broad, for this presentation we cannot discuss every single thing attorneys should need to know, but I think I've made this quite clear that counseled, you need to be able to advise on the appropriate disclaimers, the warranties, the exclusions, the contractual time periods. And you need to make sure you can draft a contract that's going to relate to those warranties and exclusions and disclaimers. And we're gonna contract is not one provision, it's an integrated form of a variety of provisions. So you can't just say, oh, okay, she told us disclaimers. So that's what we're gonna concentrate on. Two, you need to know that the standard language of Title 17, which does cover copyright content, does cover technology that is now known or later developed. And we're going to see in these contracts that this is the language that was used in the 20th century. In the 1990s. We're gonna look at a specific contract, but it's also the language that is used right now. And what I am suggesting to you or even recommending to you as attorneys is that that language may no longer be apt or shall I say it may no longer encompass the kind of agility, flexibility, innovation, dynamism that this technology provides. So you might want to look at the standard contract terms that we have used in licensing agreements and in authorization agreements and in distribution agreements for copyright content and trademark usage. Might wanna look at that and try to think about some of the things that are raised here in this presentation as to whether or not you might want to either do a supplement or an amendment or a revision or for future contracts that may involve this kind of technology. And they say the blockchain is here to stay. I'm not sure that NFTs, but the blockchain is here to stay. You might want to be savvy and at least make an informed decision as to whether or not you want to do that. And finally, finally, but finally for this slide, I do think that need to have the self confidence in their own competence to be able to tell clients when they don't know something. And I've put here that this whole area is terra incognito. I've told you that between a year before when I was discussing metaverse with clients and other entities that we represent, they thought I was from Mars or something. But by November, 2021 when Mark Zuckerberg rebranded Facebook as Meta, everyone understood that there is something new happening that there is this metaverse. So things are happening very quickly, not in decades but in months. And the tokenization of the $69 million artwork called 5,000 Days after that there were I don't know how many hundreds, thousands, tens of thousands you could go online. Everyone was NFT, people were, you saw NFT pizza, toilet paper, scripts, I mean NFTs were the rage. So we have a very dynamic environment technologically and legally and I think it is appropriate to say to the client, We don't know how the courts are gonna rule on this, these these court, this is going to be cases of first impression just like my art law practice has been for some decades. These are cases where there is not precedent and there is not a lot of established law on NFTs, it's just these lawsuits have been filed in the last 10 to 12 months. So I think I've mentioned that, even in the last 90 days, the legal space has changed. So you need to be able to handle this kind of practice and counsel so that the client is well served, lawyers don't have to know everything and I think in this day and age it's not possible to, but you can certainly inform them of the things we've talked about today. So I did mention that contracts in this technological space, in this metaverse space have their own disclaimers and warranties. And I should tell you that I've excerpted a couple of sentences here. But when you go onto the metaverse, any of the metaverse platforms and you see the disclaimers and the limited warranties of using the metaverse and buying or acquiring an NFT, there are pages and pages. So you have to rethink when we think of contracts, there's usually, I don't know, there usually aren't many, many pages of disclaimers, but in this space there are because it's so unknown. So here's an example, just took out a sentence and I think this is from one of the sellers and it says you acknowledge the ownership of an NFT carries no rights, expressor implied other than the property rights for the lot, the digital artwork tokenized by the NFT which is the syllogism. You understand and accept that NFTs are issued by third parties and not by whoever the name of the salary is. So this should give you an inkling into what you are buying. In bridge, they call it bidding air, AIR, and buying an NFT is buying digital content, which is like air, it's binary codes. So again, you can see that lawyers who were representing clients in this space were quite aware of what was happening, even if people buying the NFTs were not. So I mentioned before we get into the cases that my list of target legal objectives are ethics. And you may be in a state that uses the ABA model code of professional responsibility or you may be in a state that has adapted parts of the ABA model code or you may be in a state that has its own professional responsibility rules and regulations. But I have chosen some that are common to all and one is competence. And we have used this throughout the presentation, but that's what the rule is called. And so I'm putting it here in blue and white and we have to be competent in our practice. So most rules of professional responsibility allow lawyers to retain others in terms of things they can't do. So for example, a big motion picture distribution deal almost always has some kind of certified public accountant and other financial experts who work on these things and it's completely appropriate, estates and trust, a lot of that work estates and trusts attorneys use certified public accountants and other financial experts in people who handle investments and so on for the asset portfolios. So we are allowed to use others. So in this space, the others that attorneys may need to rely on are the technological experts and not just as expert witnesses, but actually in the structure of how the NFT is formed and tokenized and marketed and promoted and sold. So you just need to be quite clear about which I have below on the scope of your representation. So you either need to be extremely competent in this space or you need to be able to tell the client that this is the scope of my representation, I'm going to do X, Y, Z, or I'm going to do A, B, C. But in terms of other aspects of the token and using the token on the metaverse or entering the metaverse to buy the token, you need to consult or you need to consult. But this is not something that my law firm is offering you or if it is offering, you that you put down what the scope of your representation will be with respect to your offer. And the middle term is communication. I have also mentioned this earlier and in preparing for the program today, I thought, I'm just gonna spot check a couple of other jurisdictions beside my own and see what they say about communication. And this is kind of interesting, almost all the communication with the client is about making sure they understand the fee structure and creating trust and making sure about charges and hourly rates and so on and so forth. That's incredibly important and I'm not undermining it in any way, but it's not what I'm talking about here today. I'm talking about a different aspect of communication, which I believe is appropriately under the rules of professional responsibility and I believe is your ethical obligation, whether it's under your rule or not. And that is communicating to the client what we've just talked about here today. There are many aspects of NFTs in metaverses and they involve a lot of technological layering, some of which is proprietary, so that neither the client nor you as the lawyer representing the client understand because if you call any of these technological entities and platforms, they're not going to say, oh sure I'm going to share my trade secrets and my proprietary information about the apps and the software and so on with you. So even the creative comments and the open source, may not fully be apprised of how everything works. So you just need to make sure that your communication with the client in the technological area is clear. Because when I wrote this book, "A User's Guide to the Metaverse" and I talked to these technological people on the same thing and I don't wanna give a specific example right now, but you could take a specific term and each of those experts and they were experts and they actually are developers used the term in a slightly different way or thought the term had a slightly different meaning. So there is a lot of, let's put it this way, where there's smoke, there is not always fire and where there's no smoke, there can be fire. So to use our fire person's thing. So you have to be careful you're communicating appropriately to the client. And now I'd like to turn, as I said, which was on our list to to some of the cases that are in the written materials that I gave you because I think it makes clear how the NFTs relate to the metaverse. So for one thing, you know, what is the metaverse? And I think again, I refer to Mr. Zuckerberg, when he launched Meta he said, I don't know what it is. And his lawyers that may make it laugh because in the famous case of Jack Bellis, the Supreme Court said, well we don't know obscenity, we can't tell you what it is, but we'll know it when we see it. And that's what kind of Mark Zuckerberg was saying about the metaverse. It's evolving, it's what I said, it's evolving and I do have a definition for you. I think it was provided in the materials, it's certainly in the book and it's copyright to me. And it says the metaverse is a new virtual and visual frontier, a user interactive digital environment based in computer generated spaces of augmented and virtual realities in which visual imagery predominates, cryptocurrency's used and NFTs are used as fashion and decor. So again, no one blockchain and no one metaverse. So some metaverses might be about community and sharing health advisories and healthy lifestyle and they may sell as NFTs, NFT weights and NFT, some kind of Gatorade, some kind of NFT Gatorade or some kind of sports drink and NFT fashion apparel that's for the sports industry. And if I had an art metaverse, mine might be sort of about renting a curator, renting an avatar for curator. And it might be more lofty about ideas about art and art history and how visual imagery is expressed in binary code. And if Quimbee had a metaverse, theirs might be about why they had the best offerings of CLE materials and their outreach to different communities and how they were trying to get people to understand the law from different aspects and have basic understanding. So we don't know what each of those metaverses will be. They all differ, they all differ. So let's look at Miramax versus Tarantino because that's one of the examples I gave you on the list. It had the film script and it has the four aces and the in a nutshell what it says is Miramax says we own "Pulp Fiction", we paid to make the movie "Pulp Fiction", we distributed "Pulp Fiction", we own all the rights. And you, Mr. Quentin Tarantino who tried to, not tried successfully tokenized seven NFTs, he took seven uncut "Pulp Fiction" scenes and he marked, promoted and sold them as non fungible tokens. And Miramax told him, don't do that. And it's something that in the IP world we call a cease and desist letter. And he went ahead and did it anyway and they sued him. And this is all happening last year. And the argument or the defense, which is not been completely flushed out because in the answer you don't have to do that. But basically Mr. Tarantino said, I have a reservation of rights and part of my rights are to the original film script and that's what I've tokenized. And so Miramax, sorry you're upset about this but I have the right to do it. And Miramax came back with the language that they used in the 1990s when these contracts and reservation of rights and distribution agreements and copyright agreements were entered into. And they used the language that I told you and it says now known or later developed. And Miramax's position is, hey, who knew about NFTs in 1990? 1990. So this is a technology NFTs and the metaverse that has been later developed and we, you may have a reservation of rights, but we have the right to do the NFTs. So we are going to see not only in this case, this is an example, it's a pedagogical example, it's not about Mr. Tarantino and or Miramax and what's going to happen in that particular lawsuit, but it's about the issue of who owns the rights. So the preexisting content there was a script, and it was also to go back to our earlier slides, the promotional content which I told you is usually done on social media and the promotional content included some of the actors who were in the movie. And some of those actors were iconic celebrities like John Travolta and Samuel Jackson. And in some of the promotional marketing material for the seven script excerpts of Quentin Tarantino, he has their images. In fact it's a, looks like a still from the film. So you see them, they're walking and it's from this hamburger scene. And you might say to yourself, didn't we just see in the slides that in addition to the big four, the big aces, US Constitution, Bill of Rights, First Amendment, Title 15, Federal trademark law Title 17 of the US Code, federal copyright, didn't she also tell us that there are publicity rights or celebrity rights that are state laws, privacy rights, that are state laws. So in the complex offering that is part of the the NFT to get people to buy it. Because if you say you're buying five lines of digital code, you're probably not gonna get a lot of people putting $70 million down to buy five lines of digital code. So you market it in a way that makes it exciting and interesting and innovative and dynamic and all the things we talked about. But do those persons who are displayed in those promotional materials have some of their own rights depending upon what they may have allocated to the studio or the distribution company or what may be as part of the reservation of rights. You won't know all that as a lawyer just looking at it. You would have to do some kind of due diligence to find out that's why we're having all these kinds of lawsuits. And I should hasten to say, haven't looked this up yesterday, but as far as I, at the time I certainly wrote the article, none of these actors had brought a lawsuit that I know of. So that's one of the things where Miramax says, not only do we own the copyright to the content of the script, but we own the trademarks. You're using trademarks, "Pulp Fiction". We sell things under these marks and we own them, not you. And the next case that I mentioned, and by the way, so to go back to our four aces, it is not only the ability to tokenize and use an affirmative defense of fair use or First Amendment and trademark, but to say First Amendment altogether gives us the right, because this is a part of free expression, this is a part of the creative expression of the constitution, the clause for progress in the arts. This is what it's made for progress in the science and arts. So we have a right to do this. And I think I can get one more case in, and I think we should use the Meta Birkins case because we talked about that. And in that case I told you the artist sold Meta Birkins as digital content using the Birkins mark. And he had domain names, he had E-commerce stores, he formed a URL, he had a Twitter handle, Instagram account had the Discord Channel, which is a chat site. He had social media hashtags and they all said Meta Birkins. And you can imagine that Hermes which was formed in the 1800s and protects its brands and its logos and its trademarks, was not happy about that because they said this is something that we only we can exploit, not you. And the artist's defense is again, the First Amendment and that this Meta-speech, Meta hyphen speech is something that should be deserving of First Amendment protection whether the mark underlying it is Birkin or Hermes or something else. So the implications of this are there are so many people behind productions that means in terms of Hermes, what are their licensing agreements with their stores and distributors, with Miramax, what are the studios agreements with their distribution chain? So it is not just the persons or the entities that you are seeing on the social media platform and in the NFT and the creator, but all of the worlds behind those kinds of creative ideas, manifestations, expressions, products. And the answer is, we don't know yet. So these cases are now in front of the courts and we will see whether the courts are going to sort of cleave to the existing language or they are going to look to some new language or modern adaptations of what the laws should be in 2022. Thank you for your attention. And I'm going to turn this back to Quimbee. This is Alexandra Darraby, if you have questions, my contact data is on the short bio and you are welcome to contact me. I want to thank Quimbee and its staff for helping produce this program and I wish you a good day and lots of creative content, thank you.

Credit information

Jurisdiction
Credits
Available until
Status
Alabama
  • 1.0 general
Pending
Alaska
  • 1.0 voluntary
October 13, 2024 at 11:59PM HST Available
Arizona
  • 1.0 general
October 13, 2024 at 11:59PM HST Available
Arkansas
  • 1.0 general
October 13, 2024 at 11:59PM HST Approved
California
  • 1.0 general
October 13, 2024 at 11:59PM HST Approved
Colorado
    Not Offered
    Connecticut
    • 1.0 general
    October 13, 2024 at 11:59PM HST Available
    Delaware
      Not Offered
      Florida
      • 1.0 technology
      Pending
      Georgia
      • 1.0 general
      Pending
      Guam
      • 1.0 general
      October 13, 2024 at 11:59PM HST Available
      Hawaii
      • 1.0 general
      October 13, 2024 at 11:59PM HST Approved
      Idaho
        Not Offered
        Illinois
        • 1.0 general
        October 16, 2024 at 11:59PM HST Approved
        Indiana
          Not Offered
          Iowa
          • 1.0 general
          Pending
          Kansas
            Not Offered
            Kentucky
            • 1.0 general
            Pending
            Louisiana
            • 1.0 general
            Pending
            Maine
            • 1.0 general
            December 31, 2026 at 11:59PM HST Pending
            Minnesota
              Not Offered
              Mississippi
              • 1.0 general
              Pending
              Missouri
              • 1.0 general
              October 13, 2024 at 11:59PM HST Available
              Montana
                Not Offered
                Nebraska
                • 1.0 general
                October 12, 2024 at 11:59PM HST Approved
                Nevada
                • 1.0 general
                December 31, 2025 at 11:59PM HST Approved
                New Hampshire
                • 1.0 general
                October 13, 2024 at 11:59PM HST Available
                New Jersey
                • 1.2 general
                January 16, 2025 at 11:59PM HST Approved
                New Mexico
                  Not Offered
                  New York
                  • 1.0 areas of professional practice
                  October 13, 2024 at 11:59PM HST Available
                  North Carolina
                  • 1.0 general
                  February 28, 2025 at 11:59PM HST Approved
                  North Dakota
                  • 1.0 general
                  October 13, 2024 at 11:59PM HST Available
                  Ohio
                  • 1.0 general
                  Unavailable
                  Oklahoma
                  • 1.0 general
                  Pending
                  Oregon
                  • 1.0 general
                  October 13, 2025 at 11:59PM HST Approved
                  Pennsylvania
                    Not Offered
                    Puerto Rico
                      Not Offered
                      Rhode Island
                        Not Offered
                        South Carolina
                          Not Offered
                          Tennessee
                          • 1.0 general
                          Pending
                          Texas
                          • 1.0 general
                          Pending
                          Utah
                            Not Offered
                            Vermont
                            • 1.0 general
                            October 13, 2024 at 11:59PM HST Approved
                            Virginia
                              Not Offered
                              Virgin Islands
                              • 1.0 general
                              October 13, 2024 at 11:59PM HST Available
                              Washington
                                Not Offered
                                West Virginia
                                  Not Offered
                                  Wisconsin
                                    Not Offered
                                    Wyoming
                                      Not Offered
                                      Credits
                                      • 1.0 general
                                      Available until
                                      Status
                                      Pending
                                      Credits
                                      • 1.0 voluntary
                                      Available until

                                      October 13, 2024 at 11:59PM HST

                                      Status
                                      Available
                                      Credits
                                      • 1.0 general
                                      Available until

                                      October 13, 2024 at 11:59PM HST

                                      Status
                                      Available
                                      Credits
                                      • 1.0 general
                                      Available until

                                      October 13, 2024 at 11:59PM HST

                                      Status
                                      Approved
                                      Credits
                                      • 1.0 general
                                      Available until

                                      October 13, 2024 at 11:59PM HST

                                      Status
                                      Approved
                                      Credits
                                        Available until
                                        Status
                                        Not Offered
                                        Credits
                                        • 1.0 general
                                        Available until

                                        October 13, 2024 at 11:59PM HST

                                        Status
                                        Available
                                        Credits
                                          Available until
                                          Status
                                          Not Offered
                                          Credits
                                          • 1.0 technology
                                          Available until
                                          Status
                                          Pending
                                          Credits
                                          • 1.0 general
                                          Available until
                                          Status
                                          Pending
                                          Credits
                                          • 1.0 general
                                          Available until

                                          October 13, 2024 at 11:59PM HST

                                          Status
                                          Available
                                          Credits
                                          • 1.0 general
                                          Available until

                                          October 13, 2024 at 11:59PM HST

                                          Status
                                          Approved
                                          Credits
                                            Available until
                                            Status
                                            Not Offered
                                            Credits
                                            • 1.0 general
                                            Available until

                                            October 16, 2024 at 11:59PM HST

                                            Status
                                            Approved
                                            Credits
                                              Available until
                                              Status
                                              Not Offered
                                              Credits
                                              • 1.0 general
                                              Available until
                                              Status
                                              Pending
                                              Credits
                                                Available until
                                                Status
                                                Not Offered
                                                Credits
                                                • 1.0 general
                                                Available until
                                                Status
                                                Pending
                                                Credits
                                                • 1.0 general
                                                Available until
                                                Status
                                                Pending
                                                Credits
                                                • 1.0 general
                                                Available until

                                                December 31, 2026 at 11:59PM HST

                                                Status
                                                Pending
                                                Credits
                                                  Available until
                                                  Status
                                                  Not Offered
                                                  Credits
                                                  • 1.0 general
                                                  Available until
                                                  Status
                                                  Pending
                                                  Credits
                                                  • 1.0 general
                                                  Available until

                                                  October 13, 2024 at 11:59PM HST

                                                  Status
                                                  Available
                                                  Credits
                                                    Available until
                                                    Status
                                                    Not Offered
                                                    Credits
                                                    • 1.0 general
                                                    Available until

                                                    October 12, 2024 at 11:59PM HST

                                                    Status
                                                    Approved
                                                    Credits
                                                    • 1.0 general
                                                    Available until

                                                    December 31, 2025 at 11:59PM HST

                                                    Status
                                                    Approved
                                                    Credits
                                                    • 1.0 general
                                                    Available until

                                                    October 13, 2024 at 11:59PM HST

                                                    Status
                                                    Available
                                                    Credits
                                                    • 1.2 general
                                                    Available until

                                                    January 16, 2025 at 11:59PM HST

                                                    Status
                                                    Approved
                                                    Credits
                                                      Available until
                                                      Status
                                                      Not Offered
                                                      Credits
                                                      • 1.0 areas of professional practice
                                                      Available until

                                                      October 13, 2024 at 11:59PM HST

                                                      Status
                                                      Available
                                                      Credits
                                                      • 1.0 general
                                                      Available until

                                                      February 28, 2025 at 11:59PM HST

                                                      Status
                                                      Approved
                                                      Credits
                                                      • 1.0 general
                                                      Available until

                                                      October 13, 2024 at 11:59PM HST

                                                      Status
                                                      Available
                                                      Credits
                                                      • 1.0 general
                                                      Available until
                                                      Status
                                                      Unavailable
                                                      Credits
                                                      • 1.0 general
                                                      Available until
                                                      Status
                                                      Pending
                                                      Credits
                                                      • 1.0 general
                                                      Available until

                                                      October 13, 2025 at 11:59PM HST

                                                      Status
                                                      Approved
                                                      Credits
                                                        Available until
                                                        Status
                                                        Not Offered
                                                        Credits
                                                          Available until
                                                          Status
                                                          Not Offered
                                                          Credits
                                                            Available until
                                                            Status
                                                            Not Offered
                                                            Credits
                                                              Available until
                                                              Status
                                                              Not Offered
                                                              Credits
                                                              • 1.0 general
                                                              Available until
                                                              Status
                                                              Pending
                                                              Credits
                                                              • 1.0 general
                                                              Available until
                                                              Status
                                                              Pending
                                                              Credits
                                                                Available until
                                                                Status
                                                                Not Offered
                                                                Credits
                                                                • 1.0 general
                                                                Available until

                                                                October 13, 2024 at 11:59PM HST

                                                                Status
                                                                Approved
                                                                Credits
                                                                  Available until
                                                                  Status
                                                                  Not Offered
                                                                  Credits
                                                                  • 1.0 general
                                                                  Available until

                                                                  October 13, 2024 at 11:59PM HST

                                                                  Status
                                                                  Available
                                                                  Credits
                                                                    Available until
                                                                    Status
                                                                    Not Offered
                                                                    Credits
                                                                      Available until
                                                                      Status
                                                                      Not Offered
                                                                      Credits
                                                                        Available until
                                                                        Status
                                                                        Not Offered
                                                                        Credits
                                                                          Available until
                                                                          Status
                                                                          Not Offered

                                                                          Become a Quimbee CLE presenter

                                                                          Quimbee partners with top attorneys nationwide. We offer course stipends, an in-house production team, and an unparalleled presenter experience. Apply to teach and show us what you've got.

                                                                          Become a Quimbee CLE presenter image