Blockchain Neg - Michigan 7 2024 BEJJKP

Notes
Big thanks to our research group who took on the difficult task of siphoning through dense IP literature on top of even more dense crypto and blockchain literature. Shout out to Leo Federspiel, Campbell Hight, Ethan Huang, Maya Jagsi, Oliver Johnston, Ananth Mangalam, Clara Mengoli, Mihika Pandit, Melanie Pira, Joe Rozenblat, Res Seibels, Annika Sengupta, Varsha Sivasubramanian
This aff is somewhat of a choose your own adventure file. We have cut three advantages, one for patents, one for trademarks, and one for both. You can either read a patent aff with IP theft and blockchain, read a trademark aff with counterfeiting and blockchain, or read a patent and trademark aff with counterfeiting and IP theft. I think that all of the different versions of the aff have their own strengths and weaknesses. There are also a lot of cards that talk about copyright, but those internal links are generally not to as much of big stick impacts. To be honest, a lot of the advocates for this process are talking about using distributed ledger technology for all of the IP regime, which has some topicality issues. The 1AC advantages are also pretty sparsely populated with evidence, but that is because there are plenty of add on scenarios, etc for you to add to the aff to meet your needs.
There are some pretty good and simple counterplans to answer portions of the affirmative. If they read patent and trademark, you can just pic out of one and turn the other. If they read the blockchain advantage, one of the weaknesses is an IP key claim… but that is present in the rest of the aff, so it is quite vulnerable to advantage CPs.
A lot of the impact scenarios are lifted from other affirmatives in order to get the file out before the deadline, so thanks to so many of you who have cut cards throughout camp for those scenarios.
Neg---Case
Solvency
Turn---Blockchain---1NC
Copyright law is sufficient now but the aff hinders development.
Steve Kaaru 24, IP/tech reporter, 3-12-2024, "US copyright laws sufficient to handle NFT IP violations", CoinGeek, https://coingeek.com/us-copyright-laws-sufficient-to-handle-nft-ip-violations/, oj
Non-fungible tokens (NFTs) can boost artist income and expand brand appeal. However, according to a new report by U.S. copyright and trademark regulators, intellectual property rights (IP) infringement is rampant in the industry.
The U.S. Patent and Trademark Office (USPTO) and Copyright Office published a joint study delving into IP rights in NFTs. The study, conducted following a request by a Congressional committee, solicited comments from the public and held three public roundtables in January 2023.
The two found that NFTs are transformative for artists and can boost revenue through downstream resales of their works. They can also expand the brand appeal of trademark owners and support the management and licensing of IP rights.
However, the study expressed concern that NFT buyers and sellers are unaware of the IP rights implicated in creating, marketing, and transferring these tokens. The two watchdogs concluded that NFTs could facilitate trademark and copyright infringement.
“NFTs offer unique opportunities for creators to leverage their IP rights, but also present new challenges in keeping their work secure,” commented USPTO director Kathi Vidal.
Vidal pledged her agency’s commitment to continue working with industry stakeholders to understand the impact of NFTs and other new technologies, such as artificial intelligence (AI), on IP rights management.
Despite the concern, the two believe the current IP laws are sufficient to handle NFTs.
“…NFT-specific legislation would be premature at this time and could impede the development of new NFT applications, given the evolving nature of the technology…[we] do not believe that changes to intellectual property laws, or to the Offices’ registration and recordation practices, are necessary or advisable at this time,” the report stated.
NFTs have been at the heart of dozens of lawsuits involving major entities that have sued for IP infringement.
One of the most publicized legal battles was between digital artist Mason Rothschild and French luxury house Hermès (NASDAQ: HESAY). The company won a lawsuit in which it accused the artist of trademark infringement for his MetaBirkin NFT collection, which was based on Hermès’ luxurious Birkin bags.
Turn---Infringement---1NC
Turn --- NFTs are worse for infringement --- fails and causes rent seeking.
Eric Ravenscraft, 3-12-2022, "NFTs Don’t Work the Way You Might Think They Do," WIRED, https://www.wired.com/story/nfts-dont-work-the-way-you-think-they-do/
IT’S BEEN IMPOSSIBLE to avoid hearing about NFTs in recent months. Hype for the tokens—pitched as proof of ownership of a digital item—has reached a fever pitch, while billions of dollars have poured into the market for them. To some, these non-fungible tokens are the hottest new collectible hobby, to others a powerful investment tool, and still more, they’re the future of the internet.
The reality is, as always, more complex. In their current state, NFTs aren’t actually capable of doing much of what they’re often claimed to do. The extremely technical nature of how NFTs, blockchains, and cryptocurrencies work means that it’s easy to simplify the explanation of the tech to the point of being misleading.
Explaining the problems with NFTs is complicated, but we’re going to try to break down the issues as succinctly as we can. We have to tackle this with the understanding that no explanation, no matter how in-depth, can ever be totally comprehensive. With that in mind, there are some misconceptions about NFTs that are worth clearing up.
NFTs Aren’t Authoritative Tokens of Ownership
The most persistent misleading claim about NFTs is also the one that’s closest to being true. Enthusiasts frequently claim that since NFTs are fundamentally unique and live on a trustless blockchain, this constitutes proof that you “own” a digital asset. There’s only one token like this one, and you have it in your crypto wallet, so the thing it signifies must be yours.
This framing is misleading for a number of reasons. For starters, NFTs can only convey ownership (or rather, possession, but we’ll come back to that) of the token itself. As software engineer Molly White explained to WIRED, “With NFTs, the thing you've bought does not tend to give you ownership of the underlying item (image, game asset, etc.) in any way you would normally transfer physical or digital art.”
Instead, NFTs typically contain links to an asset hosted elsewhere. The NFT doesn’t convey ownership of the copyright, storage, or usage rights to the asset itself. As White explained, when someone buys an NFT, “They've paid to have their wallet address etched into a database alongside a pointer to something. I wouldn't say they really ‘own’ anything at all.”
Additionally, as mentioned above, the Ethereum blockchain (currently the most common blockchain for minting NFTs) doesn’t have a mechanism for distinguishing between possessing a token and owning it. If someone steals your bicycle, it’s generally understood that the bike is still yours. With an NFT, the “owner” is whoever has the token in their wallet. So, if someone’s ape NFT gets stolen via a phishing scam, the blockchain treats the thief as the new owner.
Centralized marketplaces like OpenSea have occasionally stepped in to freeze sales of stolen assets (on their own platform, anyway), but this puts the power to determine “real” ownership not in the NFT itself but in the hands of the marketplaces that trade them.
An NFT is also only unique in the context of the blockchain it was created on. NFT marketplace Rarible, for example, offers the choice of three different blockchains when minting a token, but what happens when two different people mint the same digital item on different blockchains? An artist could decide to mint their art on multiple blockchains and thus have an “original” on each, but deciding which of these blockchains is the “authoritative” or “real” one is still a social and platform problem.
As an example, Twitter recently started supporting NFT profile pictures, which are displayed in a unique hexagonal frame, but it currently accepts tokens only from the Ethereum blockchain. Having an NFT on the Flow or Tezos blockchains—both of which Rarible supports, and which are often cheaper to mint on right now—won’t get you that hexagon. Twitter could change this in the future, and other platforms could choose to support the other blockchains, or possibly even create their own, but once again this puts the power in the hands of centralized platforms to decide which chains are the “real” one.
Moreover, there’s very little to prevent someone from making multiple NFTs of an image on the same blockchain. Twitter user @NFTTheft has documented numerous cases of users on the OpenSea marketplace stealing artists’ work, creating duplicate NFTs, and selling them right next to the original (or selling NFTs of artworks that the original artist never intended to make into an NFT).
Since the blockchain doesn’t verify that a person minting an NFT has the rights to the asset they’re minting, it’s up to platforms to solve that problem (or not, as it were). “Verifying ownership of an asset at the point at which it is minted into an NFT is more of a social problem than a technical one,” White explained. “It's hard to do through code alone.”
According to OpenSea’s analysis of its own marketplace, over 80 percent of the NFTs listed on the marketplace were plagiarized art, fake collections, or spam. The company attempted to limit this problem by imposing a cap on how many free listings users could create, but reversed the decision after pushback from users. Meanwhile, DeviantArt has tried to help protect its artists with automated tools to scan for theft, which sent over 80,000 alerts of infringement to artists in five months, but this tool obviously only works for DeviantArt users.
OpenSea has also started verifying accounts and collections to try to combat this problem, but verification is solely up to OpenSea’s discretion. The result is that any given NFT is no more authoritative proof of ownership of the digital item it’s referencing than, say, a Twitter handle is. Every Twitter username may be unique, and if you claim yours first, then it might suggest that you’re the real person behind that username. But the 45th president of the United States still had “real” in his username because a parody account claimed @DonaldTrump first. Similar to OpenSea, Twitter’s manual verification process is the only authoritative way to know which account belongs to the real person. It’s hardly a foolproof system.
To make matters more complicated, marketplaces are only one method of interacting with the blockchain, but anyone can do it. So even if every major NFT marketplace put tools in place to block stolen artwork from being minted, and verified all its creators—a very big and complicated task already—there’s no way to prevent someone from minting stolen art on a blockchain like Ethereum with relative ease.
In the best cases, NFTs can only ever be proof of ownership of themselves. Third-party systems still need to verify the external data—artwork, digital items, etc.—that NFTs refer to.
No International Follow-On---1NC
Territorial limitations and legal ambiguity over IP laws prevents widespread adoption of blockchain.
Frederick Mostert 18. Professor of Practice, Dickson Poon School of Law, King's College, London. “THE APPLICATION AND CHALLENGES OF BLOCKCHAIN IN INTELLECTUAL PROPERTY DRIVEN BUSINESSES IN CHINA.” TSINGHUA CHINA L. REV. 13. 12-17-2018. https://heinonline.org/HOL/LandingPage?handle=hein.journals/tsinghua11&div=5&id=&page= //
While Blockchain technology has promising applications in the field of intellectual property, its widespread adoption could be slowed by the lack of clear rules governing how it can be used and what should happen in the event of a dispute. This goes back to the perennial issue of technology far outpacing the development of the law. The big challenge to the use of Blockchain in the area of intellectual property rights is establishing the appropriate jurisdiction and law to apply when a dispute occurs.'® The issue arises because of Blockchain’s decentralized nature. In a Blockchain, information is stored in distributed ledgers across the world via a network of individual participants called “nodes”.!” As this is a decentralized database in which nodes can be physically located anywhere in the world, figuring out which court has the authority to adjudicate a dispute and what rules it should apply can be challenging.''® The risk is that Blockchain transactions could fall under the jurisdiction of all of the nodes, and thus under a multiplicity of legal regimes.'!!
Taking copyright law. While international treaties recognise copyright protection in multiple jurisdictions, there is no “international copyright”, and copyright works are protected under the copyright laws of each country.'’> National jurisdictions differ greatly in certain aspects of copyright law. For instance, under the interpretation of originality, there are four different families of standards, ranging from the strictest to most generous.' These include: the EU’s personal intellectual creation standard, the United States’ Feist standard, Canada’s CCH standard, and the United Kingdom’s skill and labor standard. Additionally, countries are free to apply different types of exhaustion doctrine: “national exhaustion” in countries such as Russia and Brazil, “regional exhaustion” in the EU and “international exhaustion”''* in the US. Moreover, the terms of copyright protection also vary in different countries. The Berne Convention,'> for instance, sets a minimum protection standard of only 50 years, and while some countries, including China, follow the international treaty, some other jurisdictions such as US and EU have moved to 70 years of protection.
Copyright is made up of a “bundle” of rights, and the elements making up the bundle in different jurisdictions can vary greatly in scope and duration. It’s therefore possible to imagine a situation where a smart contract permits the use of a copyrighted work in one jurisdiction, but that same use infringes the copyright of another legitimate holder in a different region.''” When a copyright owner tries to enforce their copyright on an inherently cross-jurisdictional Blockchain, the need for some form of coordination emerges.''® However, it is not yet clear whether and indeed how Blockchain platforms can address such jurisdictional issues.'" Tt is quite possible these problems will disrupt the efficiency of the distributed ledger or even render it completely useless.'*
Of course such jurisdictional issues may be less problematic in a private Blockchain than in a public Blockchain, because the creator of the former is able to establish clear contractual obligations and rules governing all the nodes on their chain.! For example. they could maintain distributed ledgers only on nodes located within the same jurisdiction.'”> However, with the inherently expansive nature of DLT, jurisdictional disputes are bound to emerge.'” We would argue that it will be necessary to establish a consistent procedure for determining the location of a distributed ledger, and that the parties concerned should reach agreement beforehand by means of smart contracts or offline agreements. Otherwise it is likely that issues concerning jurisdiction and governing law will become apparent and should not be underestimated.'**
As Blockchain begins to be applied to areas beyond intellectual property, the same concerns will arise. For example, where a Blockchain stores personal data across multiple jurisdictions, data protection compliance becomes more difficult, given that it would be impractical to obtain the requisite consent from data subjects.'® In addition, one of the very features making Blockchain secure — the immutability of the information stored on it —only serves to complicate data protection when that personal information needs to be erased or corrected.'*® There are also implications for compliance with data-protection law, including Europe’s GDPR.'?
Absent resource tradeoff, widespread adoption of blockchain is implausible due to the lack of regulations and certainty.
Jean Rivière 18. Studied business and computer science at the Technische Universität München. “Blockchain technology and IP – investigating benefits and acceptance in governments and legislations.” Junior Management Science., 1-15-2018. https://jums-ojs3test.ub.uni-muenchen.de/JMS/article/view/5006 //
The main challenge facing the widespread adoption of blockchains for the enforcement of IP rights is the difficulty of explaining and understanding the complexities of the underlying technology. Today, in most countries, even the challenges and intricacies of online counterfeiting have not yet been adequately examined or comprehended by the enforcement authorities. In light of this fact, it is not difficult to guess that getting enforcement authorities to use a cutting-edge technology such as blockchain to protect IP rights will require a vast amount of persuasion and training. The application(s) must be constructed in a way that is relatively simple and easy to use. This is a crucial attribute that such applications must have, considering the wide range of possible users and their varying levels of technological adeptness. Not everybody has the will, talent or desire to learn how to code in order to create a smart contract. Therefore, applications with simple and easy-to-use interfaces will be essential in this field.
Another significant challenge could arise out of the nature of blockchain technology. The critics of the use of this technology in the field of intellectual property are mostly on the same page regarding this issue.65 These critics agree that the size of the data created would be enormous if this vision was realized and copyright management was carried out by using blockchain technology. Since the users of the system are also the nodes of the system in a blockchain, each one of them would need to store quite massive amounts of data. The solution to this problem may lie in the rapid development and improvement of the existing blockchain technology. In this context, looking at past technological developments could provide us with a sense of hope, once we realize how the meaning of “massive amounts of data” has changed in recent years. A USB flash drive with 64 MB storage capacity was first introduced in 2003, merely 15 years ago.66 Today, Kingston offers USB flash drives that can store up to two TB of data, which corresponds to a storage capacity that is more than 30,000 times bigger than the capacity offered by the most advanced USB flash drives just 15 years ago. Considering this exponential growth in storage capacity in the past 15 years, it would not be unreasonable to predict that the question of “storage space” for global music data will one day become obsolete. Nevertheless, at least for the time being, it is up to the software developers to address and resolve this issue.
From a legal perspective, the most difficult challenge to the adoption of blockchain technology for IP practice and enforcement appears to be the regulation of this technology. Since blockchain technology has been adopted quite rapidly and promises to bring about many changes, there are certain areas in which it must be regulated before it is too late. However, effectively regulating the technology in its early years is a significant challenge because the future of blockchain remains unknown. Therefore, apart from the social and technical challenges blockchain will face, the legal challenges will also provide a considerable obstacle to its development and widespread adoption.
Lack of regulation towards illegal transactions and delay blocks

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