The problem of intellectual property and legality in NFTs has gotten little attention thus far and requires additional research because of the increasingly digital nature of financial investments and the rapid growth of technology. Because NFTs are dynamic and ever-evolving and have an array of outcomes and impacts on digital ownership, technology, law, and various other aspects of society—both positive and negative—this chapter aims to examine NFTs in the context of the metaverse. The implications for digital intellectual property rights law will play a major role in this chapter. Research is required since previous studies have not sufficiently covered the rights of ownership of NFTs through digital intellectual property.
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Metaverse in recent years has gained significant attention due to its involvement in various technologies that provide a virtual world similar to the real world (Lee et al., 2021). Through the virtual world of metaverse people can engage in activities such as socializing, entertainment, learning, artistic work and can even experience real time shopping (Chen et al., 2023). Jasmini et al. (2023) defined metaverse as the “futuristic virtual world beyond the universe” while also predicting that most of the population in coming years will significantly ease tasks through use of metaverse and the organizations will also develop products and services centric to metaverse technology. The metaverse holds ample opportunities with a blend of the virtual social world and a significant space for businesses and investors (Singh & Sisodia, 2023). The rise of metaverse and its significance has built an opportunity for investors and businesses to enter into virtual space and expand their arenas.
The metaverse integrates with decentralized finance (DeFi) to offer various services in the virtual space such as financial services ease through cryptocurrency and blockchain technology, artistic opportunities and opportunities to build businesses (Kumar et al., 2023). It enables investing and trading through cryptocurrencies, virtual banking, virtual currency exchange and in fact virtual insurance services as well (Kaur et al., 2023). The blockchain technology used in the metaverse has a major contribution in empowering the digital management of assets offering a safe and secure distribution mechanism (Gadekallu et al., 2022). One aspect of these digital assets is that of Non- Fungible Tokens (NFTs) which have a unique feature of non-transferability (Razi et al., 2023), irreplaceability in the virtual world (Aksoy & Uner, 2021) unlike the other cryptocurrencies. NFTs also help in community development and cooperation by establishing virtual landscape, real estate, and creative ownership (Chalmers et al., 2022). The popularity of NFTs has been evergrowing since its prevalence, particularly in the artwork sector. Furthermore, because NFTs in the metaverse rely on decentralized technology to function, they assist artists in directly monetizing their unique creations without the need for middlemen (Kharitonova, 2024). Through the use of smart contracts included into NFTs, creators will receive a percentage of the proceeds from selling of their developed digital assets. According to Timucin and Birogul (2023), smart contracts provide a secure and efficient means of carrying out agreements and transactions in a decentralized environment. An environment that is more equal and transparent with respect to creators' assistance is made possible by this automated system. All good things though, come with a drawback. Looking at the emerging use of NFTs and the Metaverse, it is important to take digital intellectual property rights into account. The rights of creators need to be given more attention as the era of the internet progresses with advancements and digitization to gain the trust of people. Going backwards to the early days of the internet, fewer technological developments also helped to minimize dishonest behavior and scams. As we dig deeper into the digital transformation, we see that the virtual world evolved as an important aspect. The change from Web 2.0 to Web 3.0 is now the one that needs to be given attention. The platform offered by Web 3.0 is more user-centric. It is mostly dependent on blockchain technology, which necessitates a radical shift from conventional to contemporary investing methods. Web 3.0 represents a big change in data privacy, data management, and technology. This promotes a move toward a more helpful and advanced manner for consumers to interact with the internet.