I have summarised the first 25 pages (out of 95) of the report by the Conseil Supérieur de la Propriété Littéraire et Artistique proposing a legal qualification for NFTs.
The main points are as follows:
According to Article L54-10-1 of the French Monetary and Financial Code, NFTs are tokens that are not considered to be financial instruments, but which may be used as a means of exchange. Article L552-2 of the same code defines them as "any intangible asset representing rights in digital form".
Parliament has also equated NFTs with the same "intangible movables" mentioned in article L320-1 of the French Commercial Code.
Two ways of finding a legal qualification:
🙅🏻♀ What NFTs are not
🔹 A work of art
❌ no original character expressing the author's personality
👉🏼 their creation comes under a highly constrained and automated computer coding process
🔹 The medium of a work of art
❌ the mere presence of a link between the NFT and the work
👉🏼 hardly qualifiable as a medium (unlike memory cards or storage spaces)
🔹 A certificate of authenticity
❌ NFTs are technologically neutral, so are still susceptible to fakes and forgeries
👉🏼 the authenticity in question would therefore be perceived as misleading in the field of artistic creation.
🤷🏻♀ What NFTs could be
🤔 A contract?
💡 within the meaning of the civil code, it is an agreement of wills between several persons with the aim of creating obligations
👉🏼 In this sense, the term contract is ill-chosen insofar as the computer programme shares few characteristics in common with a contract within the meaning of the Civil Code.
👉🏼 It will be necessary, as in any contract, to ensure the validity and agreement of wills of the parties.
❌ However, the pseudonymity of blockchain prevents the identification of the parties and their wills
🤔 A rights management tool?
💡 Rights management systems are based on technical protection measures that represent digital locks to prevent circumvention. It might be thought that, by virtue of its characteristics, the NFT could play this role.
❌ However, creating an NFT on a file does not prevent unauthorised use. In the absence of protection, the underlying file remains accessible everywhere, for all the holders of the link that refers to it.
🤔 A rights title?
👉🏼 As we have seen, the NFT can be likened to intangible personal property, which corresponds to a title to the token registered in the blockchain, to which other rights over the file may be associated, which may have, depending on the smart contract:
- multiple objects
- different types (ownership, use, access, etc.)
✅ This is the ambition of the NFTs, who want to make it the future of property, particularly in the metaverse.
Conclusion: NFTs are still OJNIs. Unidentified Legal Objects. To be continued. 🕵🏻♀
Better Call Eva