“Pulp Fiction” and Beyond: The Future of NFT Litigation | Jones, Skelton & Hochuli, P.L.C.

by AryanArtnews
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As the market value of non-fungible tokens (“NFT”) continues to skyrocket, legal practitioners will soon face contract, copyright, and trademark issues associated with this new technology. In this article, I’ll explain that the recent headline-grabbing case of the rights to the 1994 movie “Pulp Fiction” heralds future NFT-related proceedings.

What is an NFT?
Simply put, an NFT is a digital certificate of authenticity that records ownership of an asset. The underlying asset is usually digital, but it can also be physical. Much of the value of NFT technology lies in the fact that it records identification information (such as ownership) on the blockchain. The blockchain is an immutable digital ledger that secures transactions. In addition to recording ownership, NFTs may include “smart contracts.” This includes terms and conditions that automatically manage subsequent sales of the NFT and provide royalties to the original author since the first sale.

Tarantino-Miramax proceedings
In November 2021, Quentin Tarantino, the award-winning director of the cult classic “Pulp Fiction,” announced that he would sell seven NFTs related to the film. Each NFT will be open to the public, including a “first uncut handwritten script” of the film, including Tarantino’s “exclusive custom commentary,” and a unique work of art inspired by the film. In response, movie distributor Miramax has claimed contract infringement, piracy, and trademark infringement to prevent Tarantino from auctioning NFTs under “pulp fiction.” Filed a lawsuit in federal court. Miramax quoted a wide range of unique rights in the film, arguing that Tarantino does not have the rights necessary to create and sell NFTs. The NFT auction continued as planned in January 2022 and the court date was set after February 2022.

The outcome of this proceeding may validate the wording that Tarantino gave to Miramax in the 1993 agreement between Tarantino and Miramax: In all media now or in the future … “Under this Agreement, Tarantino is limited, including, but not limited to, printed publications, including but not limited to audio and electronic film publications, if applicable. I reserved the right. Tarantino claims that the creation and sale of “Pulp Fiction” NFTs is within the scope of his print rights, especially screenplay rights. Miramax argues that NFTs are within the broader and more positive rights to govern “all media now and in the future.” In other words, the proceedings validate the contractual provisions drafted long before the invention of the technology currently at the center of the dispute and use traditional copyright and trademark concepts to find a solution in court. I’ll leave it to you.

Copyright law
Miramax claims that Tarantino infringed the copyright of “Pulp Fiction” under federal copyright law. Tarantino’s rights under the contract are limited to the publication of the script, so the copyright dispute depends on whether the creation of the NFT in this case constitutes a “publication” under US copyright law. In general, distributing copyrighted work to a small group with limited distribution for a limited purpose does not constitute a publication. Miramax argues that Tarantino’s sale of NFTs should be classified as a one-time transaction on the screenplay page. Tarantino, on the other hand, argues that NFT sales should be treated as a “publication”, as NFT buyers are free to share the NFT with the rest of the world as needed.

Copyright law is an area of ​​complexity when dealing with NFTs, as different rights may apply to the NFT itself and the work underlying the NFT. The copyright holder controls a number of rights related to the work in question, including the right to copy, sell, and create derivative works. Before selling or purchasing an NFT, it is important to identify which rights have been granted or transferred to avoid future legal complexity. For example, let’s say the NFT in question is digital artwork. In one scenario, the person who creates and sells the NFT is the artist of the underlying work itself and, at the time of sale, owns all exclusive copyrights, including the right to sell, copy, and distribute the work. .. Therefore, the seller can assign these rights to the buyer as much as necessary. In another scenario, the person who creates and sells the NFT is not the artist in the work itself, but the person who previously purchased the digital artwork from the original artist. The seller in this case may only assign the buyer’s rights that he himself acquired from the original artist. This scenario can be even more difficult as the seller may not properly own the right to copy or sell the original derivative. This suggests that you do not have the right to properly create and sell NFTs. In either case, as with physical artwork, keep in mind that the general public, who do not own the work, may be able to access or view the digital artwork online.

Trademark law
Miramax also claims that Tarantino infringed the “Pulp Fiction” trademark. The Federal Trademark Case is governed by Lanham Act, which prohibits unauthorized use of trademarks in ways that may confuse consumers. For example, in the case of Tarantino-Miramax, if Tarantino creates and sells a “Pulp Fiction” NFT without permission, it will convince consumers that Miramax has created or approved the sale, causing confusion and Miramax. Claims to abuse the good intentions of the general public.

As with copyright, it is important to determine which trademark rights are assigned to sellers and buyers. Proper ownership of NFTs can broaden the rights granted by trademark licenses. Federal and state trademark dilution methods can also affect NFTs if widely recognized trademark phrases or images are used. Under these laws, the parties may sue whether similar phrases or images are used to “dilute” the original trademark by obscuring the original trademark or damaging its reputation. I can do it.

The creation and sale of NFTs creates new legal issues complicated by high financial interests, the fast pace of the digital world, and related new concepts and evolving technologies. The Tarantino-Miramax case will be one of the first indicators of how the court will handle these issues. As courts extend existing concepts of copyright and trademark law to include NFTs, NFTs inevitably follow the same process that all emerging technologies follow in the area of ​​intellectual property law. At the same time, practitioners catch up and begin adding certain rights wording to future contracts.

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