By Michael Rosen

Last year was so unusual that an acronym earned the title of “Word of the Year.” Collins Dictionary crowned “NFT,” short for “non-fungible token,” as its 2021 champion.

While the term has existed for several years, it exploded in use and popularity last year. As we noted last March, NFTs — which represent authentic, one-of-a-kind digital representations of art, history, sports highlights, and the like — have begun generating intense interest and value. This is perhaps best symbolized by Christie’s auction house’s sale of a digital collage NFT for $69 million. Along the way, these tokens have sparked intriguing issues in the world of intellectual property (IP).

By way of example, last November, celebrated film director Quentin Tarantino indicated his intention to auction “exclusive scenes” from his cult-classic 1994 hit “Pulp Fiction.” Specifically, the director aims to sell NFTs derived from his original screenplay for the film, each containing “the original script from a single iconic scene as well as personalized audio commentary from Quentin Tarantino himself.”

In response, Miramax, the studio behind the film, got angrier than protagonist Jules Winnfield in the film’s famous diner scene, suing Tarantino to block the sale of his NFTs on the ground that they retain the rights to virtually all IP associated with the film. “It was profoundly disappointing to learn of this deliberate, premeditated, short-term money grab by the Tarantino team to unilaterally circumvent Miramax’s rights to ‘Pulp Fiction’ through the illicit development, promotion and distribution of NFTs,” Miramax’s attorney asserted. According to the studio, in the parties’ 1993 contract, the director “granted and assigned nearly all of his rights to “Pulp Fiction” (and all its elements in all stages of development and production) to Miramax in 1993, including the rights necessary for the “secrets from ‘Pulp Fiction’” that he intends to sell.”

For his part, Tarantino channeled Winnfield, who insisted to the would-be diner robbers that “we’re gonna be cool.” The director maintained that, in signing the contract, he reserved to himself the IP rights in his screenplay, which should include the ability to publish digital scans of his work. “Quentin Tarantino’s contract is clear,” his lawyer contended. “He has the right to sell NFTs of his hand-written script for ‘Pulp Fiction’ and this ham-fisted attempt to prevent him from doing so will fail.” Indeed, undeterred by the November lawsuit, Tarantino pressed ahead earlier this month, announcing he would go forward with the auction in partnership with the Israeli technology company SCRT Labs.

So who’s right? The concept of NFTs obviously didn’t exist in 1993, when Tarantino and Miramax inked their contract — a shortcoming Hollywood is shoring up in current contracts, which now expressly reserve for the studios all digital rights. So the court will have to assess whether the NFTs derive more from the screenplay or from the film itself. In that light, it seems the director has a modestly stronger argument than the studio, since he’s expressly publishing and auctioning portions of his screenplay, along with new original content he is creating himself nearly three decades after the film hit theaters. In addition, images of the screenplay itself appear to more closely resemble screenplay content than film content.

In one of “Pulp
Fiction’s” climactic scenes, Bruce Willis’s character announces,
“Zed’s dead, baby. Zed’s dead.” In contrast, the IP fight over NFTs remains
very much alive, as the Tarantino episode makes clear.

The post ‘Zed’s dead’ — but the intellectual property fight over NFTs is very much alive, as ‘Pulp Fiction’ fight shows appeared first on American Enterprise Institute – AEI.