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Tarantino NFT Suit Previews Rights Battles in Future Contracts

Nov. 23, 2021, 3:09 PM

Miramax’s lawsuit alleging copyright infringement by Quentin Tarantino based on his selling of “Pulp Fiction” nonfungible tokens has the potential to shift how ownership rights are divvied up in contracts to account for NFTs.

The suit centers on whether or not Tarantino or Miramax LLC has the right to sell NFTs that link to the “Pulp Fiction” screenplay. Tarantino retained the right to publish the screenplay under a 1993 agreement. Miramax contends that those rights can’t include NFTs, which didn’t exist at the time.

The case will hinge on whether that piece of copyright—the right to publish the screenplay—covers an NFT, said Devika Kornbacher, an intellectual property lawyer and Vinson & Elkins’ head of technology transactions.

“This suit and many more like it are going to define what the metes and bounds of NFT creation and exploitation are,” Kornbacher said. “Cases like these and others are going to start to do that because it is the Wild Wild West.”

Tarantino is selling images of the handwritten “Pulp Fiction” script, including exclusive scenes, through NFTs on OpenSea, the largest exchange for NFTs. The NFT is a transactional record of ownership of the image, meaning it’s how owners find the image, or whatever else the owner is selling.

The 1993 agreement between Miramax and Tarantino shows Tarantino owns the publishing rights to the “Pulp Fiction” script, according to the complaint Miramax filed. Miramax alleged that selling NFTs isn’t included in Tarantino’s reserved rights, saying the contract doesn’t contain any “forward-looking language” for rights to assets like NFTs that hadn’t been invented.

“There’s probably a lot of contracts out there that people are looking at now because none of them say anything specific about NFTs,” said Chris Sprigman, a law professor at New York University and co-founder of the intellectual property firm Lex Lumina LLC. “So the players are going to be trying to figure out who has rights over something that probably no one had in mind.”

An outcome in favor of Tarantino would signal that NFTs represent a means of exploitation that wasn’t covered by existing agreements, said Jeremy S. Goldman, a co-chair of the Blockchain Technology Group at Frankfurt Kurnit Klein + Selz.

Studios, record labels, publishers, and other entities are going to add language to their agreements to cover this kind of situation, similar to how labels are now adding no re-recording provisions to their contracts after Taylor Swift started re-recording her first six albums, Goldman added.

Kornbacher said there are likely to be similar suits in the future. Disputes are more likely to arise with older media, like “Pulp Fiction,” because attorneys are starting to include NFTs in contracts now, she said.

Value of NFTs

While Miramax says that language in the agreement is broad enough to include NFTs, copyright attorneys said NFTs likely wouldn’t be included in Miramax’s rights. NFTs don’t actually contain the media that Miramax claims is infringing, but are tools to locate the media, they say.

The NFT on its own doesn’t implicate copyrights, said Aaron Moss, a copyright attorney at Greenberg Glusker and writer of the CopyrightLately blog. The case involves the underlying content, the screenplay images, associated with the NFTs that Tarantino is selling.

It’s clear, Moss said, that Tarantino is the copyright owner of the screenplay with the right to publish the screenplay. The question is whether Tarantino can sell collectibles, such as the content associated with the NFT, within that publication right or is that content considered merchandise, a right which the studio retained, Moss said.

“The question really has to do with does the image that you’re selling or displaying or distributing, does that itself violate someone’s copyright?” Moss said. “The fact that it’s being done as an NFT, I don’t think really should matter.”

Goldman also questioned why it matters to Miramax that Tarantino is selling the screenplay shots as NFTs, saying NFTs aren’t themselves new forms of media that would be covered by Miramax’s “in all media now or hereafter known” language.

The fact that Miramax is going through the trouble of a lawsuit, though, will raise the value of NFTs in the entertainment industry even more, Goldman said, because the suit suggests Miramax sees real value in NFTs as another form of exploitation of intellectual property.

A Tarantino win in the suit has the potential to open the floodgates for other writers who have ownership rights to screenplays or songs to sell NFTs, Kornbacher said. Production companies wouldn’t want to be left behind.

The outcome of the lawsuit, if there’s no settlement, will help define how contract and entertainment lawyers handle NFTs, Kornbacher said.

“The NFT part matters because it’s so hot,” Kornbacher said. “If he had published—we probably wouldn’t have this fight—a little bit on a website, no one would care. But making it an NFT, an untapped market for companies, they’re like, ‘We have to shut this down for precedent.’”

To contact the reporter on this story: Samantha Handler in Washington at shandler@bloombergindustry.com

To contact the editors responsible for this story: Renee Schoof at rschoof@bloombergindustry.com; Kibkabe Araya at karaya@bloombergindustry.com

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