This Article is the first to elaborate a theory of decentralized intellectual property (De-IP) to explain the phenomenon of NFTs. This theory of De-IP provides a compelling new understanding of NFTs. Like the current movement to adopt decentralized finance (“DeFi”), De-IP utilizes blockchain technology to provide an alternative, decentralized way to engage in activities traditionally governed by a highly centralized regulatory system, typically involving the U.S. government and dominant industry intermediaries who operate as de facto gatekeepers. The primary vehicle for De-IP is a new technology called the non-fungible token (“NFT”), which consists of a computer program called a smart-contract that authenticates a unique virtual token on blockchain and identifies some other subject matter, such as a copyrighted artwork, whose use is governed by a license setting forth the rights the NFT owner receives. Through a combination of virtual tokens (which are new intellectual property in their own right), code, licenses, practices, and norms, NFTs are providing a viable, decentralized alternative to the copyright system—an alternative that does not eliminate the copyright system, but instead, makes it more responsive to what artists and people want. Although critics may object that De-IP does not adequately consider the public interest in how the copyright system should be reformed, both republican theory of deliberation and the ongoing public debate about copyright on social media and in decentralized autonomous organizations (“DAOs”) allay such concerns. Indeed, the current decentralized debate about NFTs and copyright law may be not only better for democratic deliberation but also more responsive to the needs of individual authors and the public. Everyone can participate.
* Professor of law and co-director of Illinois Tech Chicago-Kent College of Law’s Center for Design, Law, and Technology. Many thanks to Anupam Chander, Graeme Dinwoodie, Hal Krent, Stephanie Stern, Jay Thomas, and Adrian Walters for their incisive comments and suggestions. I am grateful to the organizers and participants of the 2022 NFT.NYC conference and the 2023 DuPont Summit, where I presented this paper to the public. I am indebted to the students in the Georgetown Tech Law Colloquium for their insightful questions and feedback. The theory discussed in this Article is further developed in my book Creators Take Control: How NFTs Revolutionize Art, Business, and Entertainment, published in March 2023 by Harper Business.
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