The parties found themselves embroiled in a dispute that threatened to shatter their mutual trust and leave everyone caught up in the mix unsatisfied and upset. The buyer, an enthusiastic artist, had purchased an NFT that showcased a captivating digital artwork.
Eager to utilize the artwork for merchandise, the buyer assumed that the purchase came with full intellectual property (IP) rights. Little did she know that in all the small print, the seller’s platform’s Terms of Service (TOS) explicitly stated that IP rights would remain with the seller.
As the realization dawned upon the buyer, frustration and disappointment filled her heart. She longed to harness the full creative potential of the artwork and feared her investment would be wasted. DMs were sent back and forth and as the finger pointing increased, each person began threatening litigation to the other.
The situation wasn’t pretty.
Determined to find a resolution, both parties agreed to engage in mediation, recognizing the benefits of an impartial facilitator.
The virtual mediation session commenced over Zoom, with the mediator, a skilled professional well-versed in web3 and NFT-related disputes, providing a comforting presence. The seller was in New York and the buyer in Los Angeles.
The process began with each party expressing their concerns and desires. The buyer yearned for greater usage rights, while the seller emphasized the importance of preserving his IP rights as outlined in the platform’s TOS.
Drawing upon his expertise, the mediator navigated the negotiation skillfully, presenting potential solutions that could bridge the gap between the buyer’s aspirations and the seller’s rights. After several hours of virtual negotiation on Zoom, the mediator suggested exploring the possibility of a limited license that would grant this specific buyer certain rights to utilize the NFT image on certain merchandise, while ensuring the seller’s overall global IP rights remained protected.
The mediator deftly employed Zoom breakout rooms, creating separate virtual spaces for each party. This approach allowed the mediator to engage in private discussions with the respective parties, eliminating confrontational pressures while facilitating effective communication. Moving back and forth between the rooms, the mediator adeptly conveyed proposals, counteroffers, and creative compromises.
Within the safety of their virtual rooms, the buyer and seller had the opportunity to express their underlying concerns, fears, and desires, fostering a sense of trust and openness. The mediator skillfully guided them towards a middle ground, presenting a win-win resolution that considered the buyer’s need for usage rights and the seller’s desire to protect his IP.
After several rounds of negotiations, compromises were reached. The buyer was granted a limited license that allowed her to use the NFT image on merchandise, within specific parameters agreed upon by both parties. This compromise respected the seller’s IP rights while empowering the buyer to realize her creative vision.
With a newfound understanding and a mutually agreed resolution in place, the buyer and seller emerged from the mediation process with restored faith in not only each other, but also the NFT ecosystem. Through mediation, they had transcended their initial dispute, forging a path forward that respected both legal rights and creative aspirations.
This story highlights two things.
First, the good faith misunderstandings in these new web3 spaces are only increasing in volume. As more and more consumers leverage these new technologies for business purposes, disputes are going to happen.
Second, the importance of mediation in addressing the nuanced legal, business, and ethical issues that arise within the realm of NFTs. It showcases the value of a skilled mediator who navigates the complexities of these disputes, leveraging technology like Zoom to foster communication and find equitable solutions. Parties can resolve disputes in private, quickly and easily through mediation. Doing so allows them to avoid the time and expense of uncertain protracted litigation.
In today’s ever-evolving NFT landscape, mediation serves as a beacon of hope, guiding parties towards resolutions that respect their interests, nurture relationships, and propel the industry to greater heights.
Mitch Jackson, Esq.
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