NFTs, Source Identification, and the Power of Unfair Competition Law

As copyright protections expire, many creators and businesses are left wondering what recourse exists when their original works are used without permission in new formats—especially in emerging digital ecosystems like NFTs.  

While copyright law has a limited duration and stricter originality requirements, unfair competition law, including trademark and trade dress principles, provides ongoing protection that can be leveraged in ways copyright cannot. 

This is especially relevant in the context of non-fungible tokens (NFTs), where the source-identifying function of the digital asset becomes critical. 

 

NFTs as Indicators of Source or Authenticity 

In essence, an NFT (non-fungible token) can serve as a digital badge of origin. The key argument here is not about the creative content associated with the NFT, but about what the NFT represents in the marketplace.  

A legitimate NFT indicates: 

• The authenticity of a digital work or experience 

• The source from which it originates 

• The validity of a purchase or license 

Just like a label or logo on a product, an NFT can function as a modern form of trademark—signaling that the asset is genuine and associated with a particular entity, artist, or brand. 

This source-identifying function opens the door for enforcement under trademark and unfair competition laws, rather than relying solely on copyright. 

 

The Role of Unfair Competition Law 

Unfair competition is a broad legal doctrine that includes: 

• Trademark infringement 

• Trade dress infringement 

• False designation of origin 

• Passing off 

• False advertising 

Unlike copyright, which requires originality and has a finite term (e.g., life of the author plus 70 years), unfair competition protections are not limited in time—they endure as long as the relevant use in commerce continues and confusion is likely. 

 

The NFT Enforcement Problem 

Here’s the real-world issue: creators or platforms may release an “official” NFT, but third parties can mint knockoff tokens that falsely suggest association with the original source. These copycat NFTs are not unauthorized reproductions of copyrighted material per se—but they may be infringing under unfair competition laws if consumers are misled into believing the knockoff comes from the original creator. 

This type of misrepresentation creates: 

• Consumer confusion 

• Market dilution 

• Brand harm 

• Potential liability under the Lanham Act 

 

Illustrative Example: Steamboat Willie in the Public Domain 

Disney’s Steamboat Willie entered the U.S. public domain in 2024—meaning anyone can now use the original cartoon under copyright law. However, this does not mean businesses can use Steamboat Willie imagery or likeness in connection with commercial goods or services in a way that suggests Disney affiliation. 

Even if copyright has expired: 

• Use of the character in commerce could be blocked under trademark law, if the public continues to associate it with Disney. 

• Third-party NFTs depicting Steamboat Willie could trigger false designation of origin claims, if consumers believe the tokens are authorized or endorsed by Disney. 

This same logic applies to any recognizable brand, character, or design that has taken on source-indicating meaning, whether or not it is still under copyright. 

 

Takeaways for Creators, Platforms, and Brands 

• NFTs are not just digital assets—they are commercial identifiers. If the public associates a token with your brand, you may have trademark rights, even absent copyright. 

• Unfair competition law is a powerful enforcement tool—particularly when dealing with knockoff NFTs, impersonation, and unauthorized token minting. 

• Don’t rely solely on copyright. Where originality is not clear or protection has expired, trademark and unfair competition may offer broader, more flexible remedies. 

• Monitor how your name, brand, or content is being tokenized—and be prepared to enforce under the Lanham Act if misrepresentation or confusion is present.