Authored By: Anshika Singh
Rajshree Law College, Bareilly
ABSTRACT
Non-Fungible Tokens have quickly become an economic reality that intellectual property law was not designed to handle. Millions of cash are exchanged on NFT marketplaces every day but what the buyer really owns is still a mystery. According to this page, purchasing an NFT does not grant you copyright on the associated work under Indian law. Producers and consumers face challenges resulting from the gap between legal expectation and reality in the marketplace. The author examines the existing legal structure and its shortcomings and suggests positive modifications to the 1957 Copyright Act, the 2000 IT Act, and the recent legal developments in the USA, EU, UK, and China.
Keywords: NFT: Copyright; Intellectual Property, Digital Asset, Blockchain Copyright Act 1957, IT Act 2000; Ownership
Introduction
If you paid sixty-nine million dollars for a painting you would expect to own it so what happens when there is no painting, only a string of code?
That question stopped being assumed in March 2021, when digital artist Beeple sold a collage at Christie’s for $69.3 million. No canvas changed hands The buyer received a Non-Fungible Token a blockchain record and with it a assumption of ownership over a file that any internet user could freely download at no cost. The sale dominated headlines worldwide. The legal question lurking beneath it did not: what, in any sense that law actually recognises, did the buyer own?
In my view now this is not a rhetorical question. It sits at the junction of intellectual property law, contract law, and technology policy and it has no clean answer yet. NFTs have made an impression of scarcity around digital works, trading them as if they were rare physical objects. Copyright law which governs creative expression, has struggled visibly to keep up. The market has sprinted ahead of the statute book, and the consequences are being felt by artists whose works are minted without consent, by buyers who discover they own far less than they believed, and by platforms that operate in a regulatory vacuum.
This article makes a straightforward argument: under Indian law, buying an NFT does not give you copyright in the work it references. These are two legally different things, and the current confusion between them is neither academic nor harmless. After establishing the technical and legal basics the article examines what Indian copyright law actually says, surveys how other jurisdictions are grappling with the same problem, and closes with three targeted reform proposals
Meaning of NFT and Copyright
A Non-Fungible Token is a unique cryptographic record stored on a blockchain, typically created using the ERC-721 or ERC-1155 standard on the Ethereum network. Non-fungible means each token is distinct unlike Bitcoin, where one coin is identical to every other. An NFT is minted through a smart contract and carries metadata pointing to an associated digital file. And here lies the first, most consequential misunderstanding: the NFT is not the digital file. It is a reference to the file. The actual image or artwork typically lives on a separate server one that can go offline, taking the associated work with it while the token persists on the chain, pointing at nothing.
Copyright by contrast is a well-established body of law. Under the Copyright Act, 1957, copyright subsists automatically in original artistic, literary, dramatic, and musical works upon creation without registration, without notice. Section 14 of the Act confers on the owner an exclusive bundle of rights: to reproduce the work, distribute copies, communicate it to the public, and create adaptations. Section 17 designates the author as the first owner. And Section 19 crucially requires that any assignment of copyright must be in writing, signed by the assignor. An oral transfer is void. A blockchain transaction, as will be seen, is not enough.
Statutory base: Copyright Act, 1957 Sections 13, 14, 17, 19, 30, 51, 57; IT Act, 2000 Sections 5, 10A, 79.
III. Concept of Ownership in Digital Assets
Classical property law rooted in the idea of exclusive physical possession maps badly into digital assets. A digital file is perfectly replicable at zero cost. When you ‘transfer’ it, you are in practice copying it. This is precisely why copyright developed: to create legally enforceable exclusivity over creative expression in the absence of physical scarcity. The NFT attempts to reconstruct that scarcity artificially, by anchoring a unique blockchain token to a digital work. But the token is scarce. The underlying work is not.
Under Indian law, there is no statutory definition of ‘digital asset,’ and no judicial decision has directly classified an NFT as a species of property. The Transfer of Property Act, 1882 addresses movable and immovable property in the conventional sense. An NFT could arguably be characterised as a chose in action an intangible right enforceable by legal action but this has not been tested in any Indian court. What is clear is that whatever the NFT is ownership of it is legally distinct from ownership of the copyright in the work it references. These are two separate things, and conflating them is the source of most confusion in this space.
NFT Ownership vs. Copyright Ownership
The most important part of the Copyright Act, 1957 is Section 19. It clearly says that an assignment of copyright is not valid unless it is in writing and signed by the person giving it up. A blockchain transaction, even if it is stored permanently on thousands of nodes, is not a signed written assignment of copyright. Section 5 of the IT Act, 2000, recognizes electronic signatures, but this doesn’t solve the problem. For an electronic signature to be valid, there must be an agreement that gives up certain rights, and a standard NFT purchase doesn’t do that.
Buying an NFT is like buying a signed print of a painting; it’s the best way to describe the situation. You own the print. The painter still owns the rights to the work. You can’t copy the image commercially, license it, or prevent others from using it unless the painter has separately and expressly assigned those rights to you in writing. In the overwhelming majority of NFT transactions, no such assignment exists. The buyer holds the token the creator holds the intellectual property.
It can be argued and platforms sometimes do argue that the act of minting and selling an NFT carries an implied licence to the buyer. Courts have recognised that licences can arise by implication from the conduct of parties, where necessary to give business efficacy to the transaction. However, implied licences are construed narrowly. At most, an implied licence in an NFT transaction covers personal, non-commercial display of the associated work. It would not extend to merchandise, sublicensing, or derivative works.
Key authority: Effects Associates, Inc. v. Cohen, 908 F.2d 555 (9th Cir. 1990) implied licence scope confined to the evident purpose of the transaction.
Rights of NFT Buyers
Absent an express licence, an NFT buyer acquires: ownership of the token itself; the right to resell or transfer it; and at most an implied personal licence to display the associated work. Nothing more, no right to reproduce, adapt, sublicense or commercially exploit. Interestingly even the right of display on resale is uncertain most licence terms, where they exist at all, are personal to the original buyer and do not transfer to subsequent purchasers.
Some projects have attempted to address this through explicit licensing. Bored Ape Yacht Club originally granted holders broad commercial licence tied to their specific token a model that generated genuine economic value but ran into trouble when Yuga Labs unilaterally revised its terms. CC0 projects like Nouns DAO take the opposite approach, placing the artwork in the public domain entirely; the NFT confers prestige and provenance rather than exclusive rights. Neither model has been tested in Indian courts.
The first sale doctrine under which a buyer may resell a lawfully purchased copy without the copyright owner’s consent offers little comfort here. The US Second Circuit, in Capitol Records v. Redigi, held that reselling a digital file requires making a new copy, thereby infringing the reproduction right and falling outside the first sale doctrine’s protection, Whether an Indian court would reach the same conclusion is uncertain, but the reasoning is persuasive, and there is no Indian authority pointing the other way.
US authority: Capitol Records, LLC v. ReDigi Inc., 910 F.3d 649 (2d Cir. 2018) digital resale infringes reproduction right; first sale doctrine inapplicable.
Legal Issues and Challenges
The most immediate challenge is infringement. Third parties routinely mint NFTs of artworks they do not own
effectively selling another creator’s work without consent. Under Section 51 of the Copyright Act, 1957, this constitutes clear infringement both the act of reproduction in creating the token’s metadata and the act of communication to the public through marketplace listing. Civil remedies under Section 55 include injunction and damages, criminal liability under Section 63 may extend to imprisonment of up to three years. The practical problem is enforcement: NFT platforms are pseudonymous, often foreign-incorporated, and the infringing token remains permanently on the blockchain even after a listing is removed.
Moral rights present a separate concern. Section 57 of the Copyright Act, 1957 interpreted authoritatively in Amarnath Sehgal v\s Union of India (2005) confers on authors an inalienable right of integrity, allowing them to object to modifications prejudicial to their honour or reputation. This right survives even a full assignment of copyright. An NFT buyer who alters the associated artwork and resells it as a derivative NFT may squarely infringe this right. Conversely and this is an angle worth developing the blockchain’s immutable provenance record could serve as a powerful tool for enforcing the right of paternity, establishing authorship in a way that existing law has never achieved technically.
Smart contract enforceability is another open question. Section 10A of the IT Act, 2000, validates electronically formed contracts, providing some foundation for treating NFT transactions as legally binding. But the automatic execution of royalty provisions by smart contracts on which many creators rely has been overridden by major marketplaces that have made royalties optional. Whether those royalty terms constitute binding contractual obligations enforceable against the platform remains unresolved in India.
Indian authorities: Amarnath Sehgal v. Union of India (2005) 117 DLT 717 | Shreya Singhal v. Union of India (2015) 5 SCC 1 | Eastern Book Co. v. D.B. Modak (2008) 1 SCC 1.
VII. Position Under Indian Law
India has no NFT-specific legislation. The Copyright Act, 1957, the IT Act, 2000, and the Indian Contract Act, 1872 must be applied by analogy and the analogies, while workable up to a point, leave significant gaps. The Copyright Act’s Section 19 writing requirement prevents blockchain transactions from constituting valid copyright assignments. Section 57’s moral rights provisions apply to digital artworks. Section 79 of the IT Act offers conditional safe harbour to marketplace intermediaries, subject to the actual-knowledge standard clarified in Shreya Singhal. And Section 10A validates electronically formed contracts, giving some legal foundation to smart contract-based transactions.
What the law does not provide is guidance on how to classify NFTs as property, how to determine which jurisdiction’s law governs a cross-border NFT dispute, what consumer protections apply to NFT buyers, or whether AI-generated NFT artworks attract copyright at all. Section 2(d)(vi) of the Copyright Act designates the ‘person who causes the work to be created’ as the author of a computer-generated work but whether this extends to autonomously generated AI art is genuinely uncertain, particularly in light of the US decision in Thaler v. Perlmutter (2023), which held that human authorship is a prerequisite for copyright protection. If a work lacks copyright, the NFT pointing to it represents nothing of legal value whatsoever.
The regulatory picture is equally unsettled. The RBI has issued no clear guidance on NFTs. SEBI could assert jurisdiction over NFTs structured to deliver investment returns but has not done so. The result is a regulatory vacuum that leaves creators, buyers, and platforms to navigate by inference.
Key provision: Copyright Act, 1957, §2(d)(vi) person who causes computer-generated work to be created is the author. Cf. Thaler v. Perlmutter, No. 22-1564 (D.D.C. 2023).
VIII. Comparative Analysis
The United States has produced the most developed NFT caselaw. In Miramax v. Tarantino (2021), a dispute over whether Tarantino’s reserved screenplay rights included the right to mint NFTs of unproduced scenes exposed how NFT rights intersect dangerously with pre-existing contractual frameworks a problem that will only grow as more content is tokenised. Hermès v. Rothschild (S.D.N.Y. 2023) saw a jury reject the First Amendment artistic expression defence and find trademark infringement in ‘Meta Birkins’ NFTs demonstrating that NFT disputes often engage trademark law as much as copyright. The foundational statutory provision, 17 U.S.C. § 202, which explicitly separates material object ownership from copyright ownership, maps neatly onto the NFT context and would benefit from an Indian equivalent.
The European Union’s MiCA regulation (2023) explicitly carves NFTs out of its scope as ‘unique and not fungible’ crypto-assets leaving them largely unregulated even under the most comprehensive crypto-framework in the world. The UK Law Commission’s 2023 recommendation to recognise a new category of personal property called ‘data objects’ distinct from things in possession and things in action is the most intellectually serious attempt to give digital assets a coherent legal foundation. India would do well to study it. China’s model, which prohibits secondary trading of ‘digital collectibles’ and requires real-name verification on state-approved platforms, offers lessons in platform accountability, even if the broader restrictions are unsuitable for India’s open market context.
Comparative cases: Miramax v. Tarantino (2021) C.D. Cal. | Hermès v. Rothschild, 22-cv-384 (S.D.N.Y. 2023) | Capitol Records v. ReDigi, 910 F.3d 649 (2d Cir. 2018).
Conclusion
The legal reality of NFT ownership is simpler than the market pretends: buying an NFT transfers the token, not the copyright. Section 19 of the Copyright Act, 1957, requires a written signed assignment for any copyright transfer, and no standard NFT transaction provides one. Buyers acquire, at most, a narrow personal licence to display not reproduce, not commercialise, not sublicense. This gap between what buyers believe they own and what the law says they own is real, consequential, and growing.
Three reforms are urgently needed. First, an amendment to the Copyright Act, 1957, should define ‘digital asset’ and establish a clear framework for rights transfer in NFT transactions distinguishing token ownership from copyright ownership in statutory terms, as the US does under 17 U.S.C. § 202. Second, mandatory IP disclosure requirements should be imposed on Indian NFT marketplaces, similar to the Consumer Protection (E-Commerce) Rules, 2020, requiring plain-language disclosure of what copyright rights, if any, accompany each NFT sale. Third, a standardised Indian NFT Licence Framework modelled on Creative Commons but tailored to the Indian legal context should be developed by the Copyright Office, giving creators tested, legally clear licensing options.
The digital economy cannot grow responsibly on a foundation of legal ambiguity. India has the statutory architecture to address this. What it lacks, so far, is the legislative will to build on it.
Reference(S):
Statutes
1 Copyright Act, 1957 (India) — §§ 2(c), 2(d), 13, 14, 17, 19, 30, 51, 55, 57, 63.
2 Information Technology Act, 2000 (India) — §§ 5, 10A, 79.
3 Indian Contract Act, 1872 — § 10.
4 17 U.S.C. §§ 101, 106, 202, 204 (United States Copyright Act).
5 EU Directive 2019/790 on Copyright in the Digital Single Market.
6 Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA).
Cases — India
7 Eastern Book Company v. D.B. Modak, (2008) 1 SCC 1 (SC).
8 Amarnath Sehgal v. Union of India, (2005) 117 DLT 717 (Delhi HC).
9 Shreya Singhal v. Union of India, (2015) 5 SCC 1 (SC).
10 Internet and Mobile Association of India v. RBI, W.P. (Civil) No. 528/2018 (SC, 2020).
Cases — International
11 Capitol Records, LLC v. ReDigi Inc., 910 F.3d 649 (2d Cir. 2018).
12 Miramax LLC v. Tarantino, No. 2:21-cv-08979 (C.D. Cal. 2021).
13 Hermès International v. Rothschild, No. 22-cv-384 (S.D.N.Y. 2023).
14 Yuga Labs, Inc. v. Ripps, No. 2:22-cv-04355 (C.D. Cal. 2023).
15 Thaler v. Perlmutter, No. 22-1564 (D.D.C. 2023).
16 Effects Associates, Inc. v. Cohen, 908 F.2d 555 (9th Cir. 1990).
Books & Reports
17 V.K. Ahuja, Law of Copyright and Neighbouring Rights (LexisNexis, 2nd ed., 2015).
18 Primavera De Filippi & Aaron Wright, Blockchain and the Law (Harvard UP, 2018).
19 Law Commission of England and Wales, Digital Assets: Final Report (Law Com No. 412, 2023).
20 U.S. Copyright Office, Copyright and Artificial Intelligence Part 2 (2024).
