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Magic: The Gathering issues copyright warning regarding related DAO

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Magic: The Gathering issues copyright warning regarding related DAO

With the emergence of more and more NFTs and Decentralized Autonomous Organizations (DAOs) built around existing brands, books, movies, and other intellectual properties, issues regarding copyrights and intellectual property rights continue to arise. Recently, the company behind Magic: The Gathering issued a copyright warning to a DAO related to its IP.

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Magic: The Gathering, abbreviated as MTG, is a collectible trading card game that has been around for nearly 30 years. It has been successful in shaping its intellectual property (IP) and has served as a reference for many subsequent card games in terms of game rules, playing a significant role in the history of game development.

The organization that has recently received a copyright warning from Wizards of the Coast, the publisher of MTG, is a group called mtgDAO, which was launched in November last year. mtgDAO aims to sponsor writers and players and organize tournaments in local game stores.

However, the issue arose when mtgDAO's whitepaper mentioned its plan to establish an NFT card economy that operates under a DAO governance structure. It aims to control the number of players who can use specific cards in competitions through scarcity, requiring players to provide proof of ownership for each card in their deck in the form of NFTs and to possess both the NFT and physical card simultaneously.

Upon reading mtgDAO's whitepaper, Wizards of the Coast engaged the services of Reynolds Law firm to issue a copyright warning to mtgDAO on the 4th of this month, and this communication was made public by the organization on its Twitter account on the 11th of this month.

The whitepaper of the organization states:

"We will not develop game software or replicate official cards. The game will still use physical cards from the Arena, MTGO, and other series."

mtgDAO also added that NFTs will serve as tickets to participate in tournaments but do not represent ownership of those copyrighted cards. They believe that

"DAO is the primary community-building tool in Web3, prohibiting Magic DAO is prohibiting any real presence in Web3. NGMI."

They simply aim to add a layer of scarcity to the game to create new game formats.

In an email sent by Reynolds Law firm, it is stated, "You seem to be under the mistaken assumption that the project is legal, even if you only allow players who have purchased physical cards from series like Arena or MTGO to replicate MAGIC cards in NFT form, this is still incorrect." This would still infringe on the publisher's trademark and intellectual property rights.

The email also acknowledges Wizards of the Coast's enthusiasm for the organization's passion for Magic: The Gathering and their inspired idea of playing Magic: The Gathering in a new framework, and it mentions that they are currently evaluating related NFT plans.

As the direction moves towards Web3, there are indeed many vague areas with unclear legal boundaries. However, this does not mean that one can freely use the Web3 framework to infringe on others' intellectual property rights.

In the case of mtgDAO, if they truly aim to promote a local Magic: The Gathering organization, they could avoid issuing NFTs that directly mirror MTG cards. Even with usage conditions, this still clearly infringes on the publisher's intellectual property rights. Instead, they could transition to a club format, apply to the publisher, or issue NFTs within permitted realms such as fan creations and non-profit activities as symbols of club membership and cohesion, utilizing the Web3 framework to unite the community and work towards their vision and the game they love.

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