Court in Barcelona rules that virtual display of NFTs based on original paintings would be “fair use”.

Court in Barcelona rules that virtual display of NFTs based on original paintings would be “fair use”.

Recently, a court in Barcelona, Spain, ruled on a case involving copyright infringement (DA), NFTs and the metaverse, in the first trial on the subject in the country. At the heart of the dispute was a virtual reality fashion exhibition by a well-known Spanish clothing brand, which featured NFT reinterpretations of works by famous Catalan artists.

After learning about the event, the Visual Artists Management Entity (VEGAP), which represents the plaintiffs’ DAs in Spain, filed a DA infringement action against the owner of the clothing brand. VEGAP claimed that the company had profited from exhibiting not only the physical works, but also their virtual (Decentraland) and digital (OpenSea) adaptations.

The plaintiff argued that even if the owner of the clothing brand owned the original physical paintings, it would need the authorization of the owners of the works for the virtual exhibition and for the transformation of the works into NFTs, and that such uses would be detrimental to the financial interests of the owners of the works and to the image of the authors.

In the judgment, the court considered that the NFTs in question were unpriced and registered on a blockchain, with no possibility of transfer to third parties.

Regarding the right of public display of the work, it was held that, as the original paintings were the property of the owner of the clothing brand, she had the right to display them, whether in the real or virtual world.

Finally, with regard to other uses, including transformative use, which in theory would require authorization from the owners of the works in dispute, the court ruled on the case using the doctrine of “uso inocuo”, similar to the American “fair use”, which observes legitimate unauthorized uses of works protected by copyright. Although “uso inocuo” is not expressly stipulated in Spanish law, this doctrine is adopted by the country’s courts. It was then ruled that the use of the works by the clothing brand was not commercial, as it was only for the purpose of displaying them. It was also decided that the virtual display of the paintings had not tarnished the value of the physical works, nor the images of the artists, whose authorship was credited.

The decision (only available in Spanish) can be accessed via the link: https://www.technollama.co.uk/wp-content/uploads/2024/02/SJM_B_1_2024.pdf