By the ruling issued on 21 October 2022, the Commercial Court of Barcelona issued a precautionary order against OpenSea, ordering the contested NFTs to be entrusted to the custody of the Court through their transfer in a virtual wallet specifically created.
The Case
In March 2022 the clothing company Mango announced its entry in the Metaverse, communicating that it would show a new interpretation of some physical works by Spanish artists, among which “Oiseau volant vers le soleil” and “Tète et Oiseau” by D. Alfredo, “Ulls i Creu” and ” Esgrafiats” by D. Agustín and “Dilatation” by D. Alejoin in a virtual museum of Decentraland. The same works would have been then uploaded on the OpenSea marketplace.
Being works still under copyright protection, VEGAP (Spanish copyright collecting company) started a precautionary proceeding against Mango, stating that the digitalization of the works and their conversion in NFT infringed the patrimonial and moral rights of the authors.
In the context of the proceeding, Mango defended itself by denying any wrongdoing and stating, inter alia, to own the original physical works. Therefore, in the opinion of the company, the digitalization of the physical works did not request any authorization from the authors and, above all, did not cause any damage.
The decision of the Court
The dispute focused on defining the extent of Mango’s rights, as owner of the original paintings. In particular, the Court was asked to clarify if the transformation of a work of art into NFTs entails a modification of the work infringing thus copyright or if, on the contrary, the ownership of the physical work is sufficient to legitimize the transformation into NFT.
Being a precautionary proceeding, the Spanish Court could carry out only a brief evaluation of the issue, which will have to be addressed in the course of an ordinary judgment. In order to avoid that the timing of the course of the ordinary judgments could compromise the protection requested by VEGAP, the Court considered the prerequisites for the concession of the requested precautionary measure to be fulfilled.
As a matter of fact, the Court stated that the mere voluntary removal of the NFTs from the OpenSea platform could not offer sufficient guarantees to prevent the storage of the works in the platform itself. Moreover, the judge affirmed that the ownership of the physical works does not allow to affirm with certainty the exclusive ownership of the right to also digitalize the work and transform it into NFT.
Therefore, while waiting for the Judge of merit to decide on the issue, the Court ordered OpenSea to deposit the contested NFTs with the Court, through the transfer of NFTs to a wallet specifically created which will remain in custody of the judicial authority until the definitive judgement is issued.
Ilaria Feriti