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Image: Quality Control Music

In one of the first major right of publicity cases when it comes to non-fungible tokens (“NFTs”), Miles Parks McCollum, the rapper professionally known as LIL YACHTY, is suing a trio of defendants for allegedly using his name and likeness to promote their metaverse-focused company without his authorization. In the lawsuit that he filed in a California federal court on January 27, McCollum claims that Singapore-based NFT startup OPULOUS and online music distributor Ditto Music, and the companies’ founder Lee James Parsons (the “defendants”) are on the hook for trademark infringement, unfair competition, and for violating his right of publicity in connection with their scheme to sell music-centric NFTs.

Setting the stage in his complaint, Grammy-nominated McCollum claims that in May 2021, he and his management engaged in introductory conversations with the defendants, who pitched their ‘music copyright-backed NFTs” venture OPULOUS, and the potential for McCollum to be involved in the launch of the company, which markets itself as “bring[ing] Decentralized Finance to the music industry, and changing how artists access the funding they need” by allowing individuals to purchase NFTs that act as fractional licenses to musicians’ sound recordings and thereby, enabling those NFT holders to earn a fractional share of the musicians’ digital streaming royalties in exchange. 

While “no agreement or deal terms were ever reached” for his involvement with the inaugural launch of OPULOUS’s products and services following two conference calls in late May 2021, McCollum claims that the defendants, nonetheless, “launched a press and advertisement campaign falsely representing that [he] was affiliated, connected, and associated with the OPULOUS platform” – and that his “copyrighted works would be offered for sale through the OPULOUS platform” – just seven days after the parties’ second and last conference call.

LIL YACHTY NFT

In connection with the OPULOUS launch campaign, which started on June 1, McCollum alleges that the defendants “utilized [his] name, trademark, and photograph” without his consent, including to alert consumers that OPULOUS was “kicking things off with a series of unmissable NFT drops led by world-famous artists, including Lil Yachty.” (In case the defendants’ pattern of co-opting his name and likeness in order to market the company to consumers is not enough, McCollum argues that they went even further and “maliciously utilized [his] alleged affiliation and involvement … as their flagship artist partnership to successfully raise substantial venture capital funds (represented as over $6.5 million), yet never remitted any monies to [him].”)

McCollum asserts that the OPULOUS ads “are likely to cause confusion, and have caused actual confusion, in the minds of the consuming public as to an association [between himself and] the defendants,” when no such association exists. With this in mind, he sets out claims of trademark infringement, unfair competition, and right of publicity violations, and is seeking an array of monetary damages, and injunctive relief “as allowable by law.” (State right of publicity laws protect against the unauthorized use of an individual’s name, likeness, or other recognizable aspects of one’s persona in a commercial capacity.)

Reflecting on the start of the case, Frankfurt Kurnit Klein & Selz partner Jeremy Goldman, who co-chairs the firm’s Blockchain Technology Group, writes that “although the case arises from the wild west of blockchain and NFTs, the complaint appears to state a fairly straightforward celebrity false endorsement claim.” Unfortunately, he notes, “the case is unlikely to answer some hot legal issues that are just outside the periphery of this case, including under what circumstances the sale of an NFT using another person’s image violates their right of publicity, and the legality of selling fractionalized royalty streams via NFTs.” 

Meanwhile, Darren Cahr, who heads up Scharf Banks Marmor’s Advertising and Intellectual Property Practice, says that he expects various right of publicity cases to be “the next big thing in future cutting edge Metaverse litigation,” pointing specifically to right of publicity suits that center on: “(a) avatars designed to look like famous people in commercial contexts; (b) augmented reality overlays that make people look like famous people; and (c) metaverse ‘challenge’ ads that alter someone else’s commercial property or avatar to put your avatar into an ad ‘seen’ by others against your will.” 

A rep for OPULOUS stated in response to the complaint, “Contrary to the assertions in the complaint filed by Lil Yachty, Opulous’s uses of Lil Yachty’s name and likeness were all authorized by Lil Yachty and his representatives. We intend to vigorously defend ourselves against these meritless claims.”

The case is Miles Parks McCollum v. OPULOUS, et al., 2:22-cv-00587 (C.D.Cal.)