NFTs, an “opportunity to be grasped but framed” for the world of culture

In the last two years, non-fungible tokens (JNF or NFT in English) have experienced a spectacular boom in the field of culture. These tokens associated with a digital file by a “smart contract” and registered on blockchain (computer protocol is considered inviolable) as a guarantee of authenticity, have made it possible to appreciate digital works of art that are hitherto difficult to sell because they can be reproduced in the infinite. Other JNFs have been used to market digital copies of physical works: paintings, sculptures, etc.

Market star artists like Jeff Koons, prestigious museums like the Uffizi in Florence, the British Museum in London or the Hermitage in St. Petersburg, large auction houses like Christie’s or Sotheby’s and intermediate platforms have started publishing and selling such tokens. Thus, by 2021, according to the site, the artistic JNF sector would have represented a global sales volume approaching $ 2.8 billion (or euros), revealing a real speculative flight.

Since then, this market has experienced rather bearish trends in the first half of 2022. “it is very likely that these use cases will continue and evolve over time”, estimates a report from the Higher Council for Literary and Artistic Property (CSPLA), attached to the Ministry of Culture, published on 13 July. According to him, “all sectors are ultimately concerned: from graphic arts to cinema, from publishing to music, the private sector as well as the public sector”.

Copyright Infringements

“While JNFs are particularly rich in potential, they are not without risks and without weaknesses for authors and rights holders as well as for consumers”, immediately emphasizes the rapporteurs, Jean Martin, lawyer at the Court, and Pauline Hot, master of requests at the Council of State, who consulted about sixty experts. They invite the public authorities “to ensure the use of this technology to encourage the most virtuous use cases, which will have a calling to continue beyond the speculative phenomenon”.“The first risk identified isthe many scams that accompany any speculative phenomenon: fraud, fraudulent transactions, the sale of “empty” JNFs, the misappropriation of portfolios. »

It is difficult to qualify with precision from a legal point of view, and JNF can, according to these authors, be considered “a deed to the token to which other rights to the digital file may be attached”. “Such digital files remain subject to copyright and related rights unless expressly contractualized”, insists the two rapporteurs. On 31 May, about twenty major foundations or estates of artists, including Matisse and Picassos, had in fact condemned in a joint text that “Non-fungible tokens are increasingly being used to market digital copies of works (…) often without the assistance of the artist or his successors in the title “. This is especially true during resale “by the JNF in the secondary market that the risk of copyright infringement is the strongest”adds the rapporteurs.

A charter of good practice must be drawn up

Even when it is a work that has fallen into the public domain, the commercial exploitation of its image must ensure respect for the “moral rights of the author”, specify the CSPLA’s rapporteurs, who encourage the development of a “charter of good practice” for platforms issuing JNFs.

Another proposal, this time to stem the spread of counterfeiting: “establishment of third-party checkers of content associated with JNFs exchanged on blockchain”. The rapporteurs also request that “JNF integrates into European reflection on harmonizing the fight against money laundering and terrorist financing” which thrive especially thanks to the opacity of cryptocurrencies.

Finally, the very energy-intensive side of blockchains, which consume tens of thousands of TWh per year, corresponding to entire countries’ electricity consumption (between one and three times Denmark’s), is another problem at the time of global warming, notes. The report. However, he notes that switching to other systems may make it possible to reduce this catastrophic carbon footprint in the future, and therefore advocates the exemplary environmental character of innovative JNF projects supported by public authorities “.

French museums in anticipation

By reviewing initiatives that have been implemented in the fields of art, cultural heritage, music, film, audiovisual media, books or photography, they first believe that the production of JNF constitutes a certain source of income, although it is difficult to assess. She can “enable, through participation or co-financing mechanisms, support certain cultural projects”, judge the rapporteurs, but also “Reaching new audiences and (news) amateur communities » by “more playful uses” as collectibles.

French museums have so far stayed on the sidelines, out of caution. However, the report states “the risk of such an attitude is to miss the strategic positioning of cultural establishments in the metaverse; (1)if the early creation of JNFs for exhibition at digital museums could be a first step ”. He recalls that in an interview with the specialized media The Big Whale on April 24, 2022, the President of the Republic stated that he was in favor of the development of large public cultural institutions. “of a policy towards the JNF, for example through the promotion, dissemination and protection of twins or variants (note: digital reproductions) of their physical collections. And he wanted to launch a collective reflection on “what would a dematerialized museum of French history be”.

The CSPLA report thus advocates “the conduct of progressive experiments”, for example, with an actor such as RMN’s photo agency and external service providers, both for the acquisition of JNF linked to newer digital works and for the production of JNF in connection with works from public collections. With the key “a guide to operational recommendations”.

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