This is perhaps one of the best advertisements in recent memory – an advertisement promoting a visit to Lexington, Kentucky, the horse capital of the world. The announcement promises to make children’s vacation dreams come true with the option to purchase “non-fungible thoroughbreds” at VisitLEX. The horses have names like Ol’ Pixel Face, iHorse, OpenSea Biscuit, Notta Pony, and Champing at the Bitcoin. They promise no feeding, grooming or maintenance. And “the only thing more valuable than a child’s wish is a unique, non-interchangeable unit of data with limited usage rights stored in an online registry.” Watch for laughs here: https://www.youtube.com/watch?v=6ZOegq2E030. It might make you want to visit Lexington after omicron leaves, hoping it will soon fly away like our old Christmas tree needles. And we might see you there!
NFTs (non-fungible, not thoroughbred tokens) weren’t a disappointment, but were rather all the rage for holiday giveaways this year, including offerings from brands such as Adidas and Balmain x Barbie. Amy’s teens were there and see them as a longer-term investment opportunity with immediate bragging and display rights. But if your customers are launching NFTs for sale in 2022, it’s essential to make it clear to consumers what they’re buying. In this new market, defining the “reasonable consumer” is difficult – is it the crypto-trading entrepreneur who has everything or the mother or father of a curious teenager? Better to assume little experience and make it very clear what property is being purchased.
- State very clearly which rights are transferred to the buyer. Generally, these rights include a limited license to access and display the NFT media for personal use, but do not include the ability to use it for commercial purposes or to reproduce or transform the underlying media.
- Also clarify that the purchase of an NFT does not confer any right to participate in secondary market royalties with respect to the underlying media; these rights belong to the entity that owns the copyright in the NFT media.
- Avoid advertising the purchase of NFTs as an investment opportunity.
In the case of our four-legged NFT friends in Lexington, the NFT sale is in the form of a charity auction. For promotions such as these, ensure that the third-party auction platform is registered in all applicable states in accordance with state auction laws. Additionally, business joint venture laws may apply where a for-profit entity raises funds on behalf of a non-profit entity, so there may be contractual, registration and reporting requirements. additional.