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Roc-A-Fella Records has convinced a New York federal judge Jay-Z’s first album shouldn’t be sold as an NFT, at least for the time being.
The label sued its co-founder Damon Dash on June 18, alleging he was trying to sell virtual ownership of the “Reasonable Doubt” copyrights. NFTs, or non-fungible tokens, are effectively digital data that represents tangible items.
While Dash has disputed that he was trying to sell rights in the album, according to the complaint, investor platform SuperFarm made this announcement: “SuperFarm is proud to announce, in collaboration with Damon Dash, the auction of Damon‘s ownership of the copyright to Jay-Z’s first album Reasonable Doubt. This marks a new milestone in the history of NFT’s, entitling the new owner to future revenue generated by the unique asset.”
An auction had been set for June 23-25, according to the complaint, but it was cancelled after Roc-A-Fella sent a warning letter to SuperFarm. The label was concerned Dash might still pursue a sale, so it asked the court to issue a temporary restraining order.
During a Tuesday morning hearing, U.S. District Court Judge John Cronan asked why monetary damages wouldn’t suffice. Alex Spiro, representing the record company, answered, “A lot of it has to do with the uniqueness added to the unique industry.”
Dash and his lawyers didn’t show up for hearing, but Spiro said they were served papers and had previously responded to a cease and desist. Dash’s side has also commented about the dispute in the media where they said they really wanted to sell shares in Roc-A-Fella.
Cronan said Jay-Z’s record label was likely to prevail on merits. He pointed to Jay-Z’s declaration that Roc-A-Fella owned copyright. He also nodded as precedent to the case where J.D. Salinger stopped an unauthorized sequel to “Catcher in the Rye.”
Specifically, the judge said the label was likely to prevail on claims of breach of fiduciary duty, conversion, and unjust enrichment. Roc-A-Fella won’t have to put up a bond, but it will have to continue to fight as the parties will next debate whether the TRO becomes a preliminary injunction.
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