Contributing Author: Neil Elan
Within the last year, NFTs have grown from an experimental technology used by a niche community of artists and collectors to an innovative and disruptive distribution, marketing platform utilized by leading brands, celebrities, and studios. While many of the recently announced NFT collections/projects by entertainment studios center around new storylines, characters, and intellectual property (“IP”), an even greater number of NFT projects are being developed around preexisting IP, subject to previously negotiated licensing and assignment agreements. Inevitably, challenges will arise in determining whether a particular screenwriter, actor, producer, composer, musician, or studio has the right to launch NFTs around legacy IP subject to preexisting license agreements that were drafted years, and even decades, before NFTs existed.
The pending case of Miramax, LLC v. Quentin Tarantino and Visiona Romantica, Inc. (United States District Court, Central District of California, Case No. 2:21-cv-08979), previews some of these challenges. This article is intended to summarize the Miramax case, and raise key issues and considerations that attorneys handling NFT and licensing disputes will want to consider —especially given the nascency of NFTs and the corresponding absence of NFT jurisprudence.
In 1993, American filmmaker, Quentin Tarantino (“Tarantino”), entertainment studio Miramax, LLC (“Miramax”), and Tarantino’s production company Visiona Romantica, Inc. (“Visiona”), entered into a series of agreements relating to the production and financing of the 1994 film, PULP FICTION (“the Film”). Under the agreements, Tarantino granted to Miramax “all rights (including all copyrights and trademarks) in and to the Film (and all elements thereof in all stages of development and production) now or hereafter known including without limitation the right to distribute the Film in all media now or hereafter known (theatrical, non-theatrical, all forms of television, home video, etc.)…” The agreements granted Tarantino reserved rights to “soundtrack album, music publishing, live performance, print publication (including without limitation screenplay publication, ‘making of’ books, comic books and novelization, in audio and electronic formats as well, as applicable), interactive media, theatrical and television sequel and remake rights, and television series and spinoff rights.”
In the midst of the NFT craze in late 2021, Tarantino launched an NFT collection consisting of digital images of portions of the handwritten version of the PULP FICTION screenplay. The NFTs were auctioned on the NFT exchange, OpenSea. In response, Miramax sued Tarantino (and Visiona) for breach of contract, copyright infringement, trademark infringement, and unfair competition. The case centers around whether Tarantino’s reserved right to “screenplay publication” encompasses Tarantino’s right to launch the NFT collection (and, as a derivative issue, whether Tarantino’s development, marketing, and sale of the NFTs infringed on Miramax’s copyright and mark for PULP FICTION, in violation of federal copyright and trademark law). Miramax contends that Tarantino granted and assigned to Miramax all rights in and to PULP FICTION, and that the development, marketing, and sale of the NFT collection infringe on Miramax’s copyright and trademark rights. Tarantino contends that he was within his rights to develop, market, and sell the NFTs, as he reserved all print publishing rights for the screenplay (including in electronic form). Although the case is pending, there are already valuable takeaways.
As the Miramax case signals, NFTs are certain to usher in a series of licensing disputes in the entertainment industry. When Disney, Hasbro HAS , and every other prominent studio entered into license agreements for the development and production of the most successful franchises years (and even decades) ago, NFTS did not exist. For those developing NFTs based on preexisting IP, it will be critical to review the applicable licensing and assignment agreements to determine whether they have the right to do so in the first place. To the extent that the right to develop, market, and sell NFTs does not fall neatly within a preexisting license agreement, the intention of the parties and industry custom will inevitably come into play.
As a corollary, the Miramax case also serves as a helpful practice pointer for attorneys and parties faced with navigating the drafting and negotiation of contracts and licensing agreements involving NFTs. Since NFTs are in their infancy and tomorrow’s use cases, distribution platforms, and technological development are certain to profoundly evolve, it is critical that IP license agreements contain sufficient detail and context. That way, even if the contract does not cover a particular situation, the inferred intent of the contracting parties can guide the way in determining whether the parties intended a certain outcome under the contract.
Finally, since NFTs are most commonly sold via online exchanges, disputes and lawsuits involving NFTs will likely require the production of records in the possession of exchanges and other third parties. Indeed, in its pending lawsuit against Tarantino, Miramax sought OpenSea’s financial records relating to Tarantino’s compensation, royalties, and other remuneration of any kind. Accordingly, NFT exchanges should carefully scrutinize their protocols, procedures, and agreements regarding the preservation of their records, as well as their obligations when their records are subpoenaed.
Likewise, attorneys and parties negotiating and drafting contracts involving NFTs should consider including confidentiality provisions to prevent public dissemination of proprietary and sensitive financial information. As the Miramax case demonstrates, these records may very well come into play in the future. While the Miramax case is only one of a handful of pending NFT lawsuits, the upcoming years are certain to experience a massive surge of NFT litigation.
Legal Entertainment has reached out to representation for comment and will update this story as necessary.
Neil Elan is Senior Counsel at Stubbs Alderton & Markiles LLP. Neil’s practice consists primarily of business/commercial and entertainment/intellectual property litigation, in both state and federal court. Neil is particularly knowledgeable about the technical aspects of NFT transactions and primitives on different blockchains (including Bitcoin BTC , Ether ETH eum, Solana SOL , Tezos XTZ ), works closely with prominent NFT artists, collectors, and creatives, gives presentations to businesses on NFT technology and legal issues, and has been involved in the NFT space since 2020.
Find more: Miramax sues tarantino fiction nft auction – Krypto-NFTs