“If my answers frighten you, Vincent, then you should cease asking scary questions.”
– Jules Winnfield in Pulp Fiction
Scary questions are always in the script when the law collides with new technology. And Non-fungible tokens (NFTs) pose novel legal challenges. Our closeup is on a recent legal dispute between Quentin Tarantino and Miramax regarding the rights to sell Pulp Fiction NFTs. Various intellectual property and contractual rights were implicated with minting, selling, or buying these digital assets.
NFTs are digital assets that prove ownership or authenticity of unique items like collectibles, music, videos, or other forms of digital media, using blockchain. Unlike regular cryptocurrencies like Bitcoin, each NFT is unique and cannot be exchanged on a one-to-one basis. People use NFTs to buy, sell, and trade digital assets securely, with ownership details recorded on a blockchain to prevent fraud and ensure transparency.
NFTs have gained traction globally over the past few years. While it is unclear whether NFTs are just a fad, Hollywood has taken notice, particularly regarding Quentin Tarantino. In 2021, Tarantino announced he’d be selling Pulp Fiction NFTs. Tarantino’s plan was to produce seven NFTs that showcased never-before-seen scenes and exclusive insights into the film. These NFTs were intended for auction on the privacy-focused “Secret Network.”
Regrettably for his fans, Tarantino’s NFT project faced a legal setback when Miramax, the film’s production company, filed a lawsuit in November 2021, claiming that Tarantino lacked the rights to mint and sell the NFTs. Miramax alleged breach of contract, copyright infringement, trademark infringement, and unfair competition, following an unanswered cease-and-desist letter.
In response to the legal action, Tarantino argued that his existing contracts granted him the right to publish parts of his original screenplay for Pulp Fiction. Tarantino further argued his rights to use NFTs under the First Amendment and copyright fair use doctrine.
The dispute revolved around the interpretation of Tarantino’s “reserved rights” outlined in the original 1993 contract with Miramax. While Tarantino retained rights with regard to the screenplay, Miramax contended that its rights are broad enough to include technology not yet created in 1996 when the deal was done. Thus, Miramax argued, it retained the rights to sell NFTs featuring excerpts from any version of the screenplay.
While the two parties settled in September of 2022, this dispute raised significant questions for the entertainment industry and beyond, such as who has the authority to mint or sell NFTs associated with existing films or TV series, and what exactly can be minted. The Miramax case could have clarified whether these sales rights are secured by existing trademark and copyright agreements that do not explicitly address NFTs. The answers to these questions will have broad implications, affecting not only the entertainment sector but also various industries relying on intellectual property and blockchain technology. Meanwhile, other studios have used NFTs for marketing films like Space Jam: A New Legacy and The Matrix Resurrections. It’s likely that future contracts will incorporate NFT provisions.
As the Miramax and Tarantino imbroglio demonstrates, NFTs present many legal challenges and anyone venturing into the NFT space should be well-informed about potential obstacles, as the law here continues to evolve. Seeking guidance from experienced legal professionals is crucial in this emerging area.