Legal Validity of NFT Transactions Involving Cinematographic Films: Copyright Assignment, Licensing and Infringement under the Indian Copyright Act, 1957

Ownership of non-fungible tokens (NFTs) associated with cinematograph films is advertised, whereas Indian copyright law makes any transfer of a right in a film by way of assignment or licence possible only if it complies with the formalities laid down in the Copyright Act, 1957. This paper raises two issues: first, whether an electronic agreement or smart contract can comply with Sections 18, 19, 30 and 30A of the Act; and second, what an NFT buyer acquires. Through a doctrinal approach, it subjects the statutory formalities to scrutiny against the background of Pine Labs v. Gemalto, IPRS v. Eastern India Motion Pictures Association and the Supreme Court’s judgments on electronic contracts and electronic evidence. The methodology is doctrinal: it analyses the text of the Copyright Act, 1957 and the provisions on electronic records and contracts, together with the judicial decisions interpreting them, and derives from them a framework for testing an NFT-based grant. Technical sources are used only to describe how NFTs and wallet signatures work. It offers four criteria for the evaluation of an NFT-based grant: an accessible written record, an effective signature, proof of the grantor’s identity and authority, and content that confers identified rights. The writing and signature requirements apply expressly to assignments in Section 19(1), and the writing requirement to licences in Section 30. The Act sets out what an assignment must contain, while the statute supplies defaults for some omissions; however, identity and authority must be established by the party relying on the grant. A signed token transfer in a wallet evidences only possession of the key. The buyer acquires the token itself and the contractual rights conferred by it, but no copyright, since the divided title of the issuer restricts what any buyer can acquire. Infringement depends on the acts restricted under Section 14(d), not on ownership of a token. Two issues remain open: whether a signature on the blockchain constitutes a “signature” under Section 19(1), and whether that requirement also applies under Section 30A.