On 21 October 2022, Barcelona Commercial Court number 9 issued an interim injunctions ruling in which it ordered the deposit at court of a set of non-fungible tokens (“NFTs”) in relation to several works of art, the originals of which belong to the textile company Mango.

The works of art in question include works by Joan Miró, Antoni Tàpies and Miquel Barceló. The measure ordered was directed towards Opensea – the largest marketplace for the sale and exchange of NFTs and cryptocurrencies – in order for the platform to transfer the NFTs in question to the physical wallet chosen by the claimant, so that they would remain in the custody of the Counsel of the Administration of Justice until the end of the proceeding.

This legal action was initiated in a lawsuit filed in mid-2022 by VEGAP, in which the said entity exercised a declaratory action for copyright infringement, an action for injunction and an action for damages, based on articles 138 to 140 of the consolidated text of the Intellectual Property Act.

According to the claimant, Mango had made use, without due authorisation, of the visual creations that were the subject of the lawsuit, having created a set of NFTs based on them, which had been published on various social networks, in the Metaverse, as well as on the Opensea website.

For its part, the defendant, in addition to questioning the Claimant’s standing to sue, argued that it had not committed any infringement, since:

    • as the owner of the physical media of the works, it held the right to display them publicly;
    • the production of digital “reinterpretations” from original works and their subsequent dissemination constituted a “fair use” of the original works, and therefore did not require authorisation and did not cause prejudice to the authors;
    • the NFTs that formed the subject of the lawsuit were digital files that had not been registered on any blockchain, so that they could only be viewed through the Opensea platform, with no possibility of purchase or download; and
    • as they had not been minted as authentic NFTs, they were not under Mango’s control through its own wallet and therefore only Opensea had access to them.

Therefore, the case in question should be considered as a typical case in which an artist develops his/her work from a pre-existing piece of art, and the result is disseminated through a physical medium and through various digital channels.  The extent of the defendant’s rights as owner of the original paintings must be determined. That is to say, whether converting a work of art into a NFT implies a modification that may affect its author’s rights or whether, on the contrary, ownership of a physical work covers transforming it into a NFT and, therefore, whether by purchasing the original paintings the defendant acquired an absolute right of enjoyment and exploitation in any way and in any scenario, considering the use as innocuous.

Appearance of good faith

In analysing the interim injunctions, the Court primarily paid attention to periculum in mora, while with regard to fumus boni iuris, it agreed to make a non-exhaustive evaluation, recognising the complexity of the issues in dispute.

In this regard, the Court concluded that, for the purposes of adopting the requested interim injunctions, there was sufficient factual and legal basis to appreciate the appearance of good faith, mainly because it believed that there was a question as to whether the right of public exhibition – which it did not deny was held by the owner of the medium on which the works were held – would cover the reproduction and transformation of the works through the creation of a new digital work of art that transformed the pre-existing work into an NFT, or whether it could be considered as an “innocuous use”.

Periculum in mora

As regards periculum in mora, the Ruling assumed that the risk of the claimant or a third party disposing of the non-fungible tokens in dispute was minimal or non-existent, given that the NFTs were not minted on a blockchain and that the Opensea platform had removed them from its website on 10 June 2022 at the request of the claimant.

However, the Court found a risk that their removal by Opensea might be ineffective. On the one hand, because their removal was for a period of fourteen days. On the other hand, because it believed that, although the files remained withdrawn, there was no certainty as to how the platform was storing the digital files.

By virtue of the above, the Ruling accepted the existence of a periculum in mora in a way that was partial (restricted to the files that had been uploaded to Opensea) and relative (due to the lack of a complete guarantee as to the custody offered by said platform).

With this Ruling, the virtual world has now also become a reality in the Courts. Undoubtedly, there is still a long way to go to consolidate law and jurisprudence around virtual art and the metaverse.