The 9th Commercial Court of Barcelona has rejected the claims of VEGAP, which brought an action against Punto Fa, S.L. (owner of the “Mango” trademark) for infringing the moral and exploitation rights of Antoni Tàpies, Joan Miró and Miquel Barceló, and has concluded that Mango carried out a legitimate, fair and innocuous use by creating a collection of NFTs that reinterpreted the works of the aforementioned artists to celebrate the opening of its flagship store in New York.

The Court upheld that Mango, as the owner of the original artworks, could transform them into NFTs, and concluded that neither this act, nor the publication of the NFTs on the digital platforms OpenSea and Decentraland, infringed the intellectual property rights of the aforementioned authors.

The judgment is not without controversy, largely due to its significance as the first Spanish court ruling on NFTs, their coexistence with conventional intellectual property rights and the link between the two on Web 3.0, but also due to the eccentric nature of some of its reasoning.

According to the court, one of these controversial points is the incompatibility between the right of transformation and the right to the integrity of the work, as Mango itself argued. For the judge, these are mutually exclusive rights, since, as she states in the judgment, “the moral right to integrity acts on the work that has been deformed or altered, affecting its integrity, but without resulting in a new or different work.”

The decision makes the recognition of the moral right to integrity conditional on the non-existence of a new work resulting from the infringement, which is equivalent to assessing the existence of the unlawful act only in cases where the crime has not been committed.

This reasoning completely empties the moral right of content and prevents the original author from using the legal mechanisms available to him to prevent the deletions, additions or modifications that could be made to his work. The paradox is that, as if it were an immoral right, the court’s thesis leads to a scenario in which the author of the transformed work can invoke the right to integrity that has been expropriated from the original author.

At the same time, the court decision, by stating that “if there is reproduction, there cannot be transformation, and vice versa”, seems to ignore that derivative works require a greater or lesser appropriation of the elements of another’s work, which in itself constitutes an act of reproduction that prevents it from being exploited without the authorisation of the author of the pre-existing work.

The ruling, which ignores the system of sources of our law, adopts the US Fair Use doctrine, basing its decision on an April 2012 Supreme Court ruling. In the analysis of the factors contained in Section 107 of the US Copyright Act, it abandons any restrictive perspective and rules out the possibility that Mango has made a commercial, advertising and for-profit use.

However, not even the greater flexibility with respect to the copyright model that Fair Use admits allows for some of the reasoning that the court uses to defend the lawfulness of the defendant’s use.

In the necessary balancing of interests that is required, the court ignores the harm that the unauthorised reproduction of the owner’s work represents for the owner, ignores the fact that the original works were copied in their entirety for the creation of the NFTs and even goes so far as to assert, in its analysis of the requirement relating to the nature of the protected work, that Mango has enabled access to the works of Antoni Tàpies, Joan Miró and Miquel Barceló by a public that would not otherwise have known about them.

It seems clear that the immateriality of the metaverse is not a sufficient reason to ignore and blur the rights that protect the owner of the contents and that the solution to the complex legal situation in which technological evolution places us can never be arbitrariness, transforming the metaverse into a reality that is remote not only because of its dimension, but also because of its legal uncertainty.

Francisca Montenegro

TMT, Intellectual Property and Software Attorney at PONS IP