Jay-Z label Roc-A-Fella blocks co-founder’s ‘Reasonable Doubt’ NFT auction

FILE PHOTO - Shawn "Jay-Z" Carter, a founding partner of Reform Alliance appears during launch event in New York
FILE PHOTO - Shawn "Jay-Z" Carter, a founding partner of Reform Alliance, a newly formed organization to reform the U.S. criminal justice system, appears during the Reform Alliance launch event in New York City, New York., U.S., January 23, 2019. REUTERS/Mike Segar
  • Damon Dash allegedly tried to auction interest in rapper's 1996 debut album
  • Manhattan court temporarily blocks NFT sale

(Reuters) - Rapper Jay-Z’s former label Roc-A-Fella Records Inc won a temporary restraining order on Tuesday against co-founder Damon Dash in Manhattan federal court blocking a planned non-fungible token auction of his copyright interest in Jay-Z’s debut album “Reasonable Doubt”.

In one of the first copyright cases over an NFT, U.S. District Judge John Cronan ruled at a telephonic hearing on Tuesday that Roc-A-Fella was likely to win on its assertions that Dash doesn't individually own any rights to the album and breached his fiduciary duty to the label, Roc-A-Fella attorney Alex Spiro of Quinn Emanuel Urquhart & Sullivan confirmed in an email.

The temporary restraining order also schedules a July 1 hearing for Dash to show cause to avoid a preliminary injunction.

Dash co-founded Roc-A-Fella with Jay-Z and Kareem Burke in 1995, and the complaint said they each own one-third of its shares. The complaint also said the label itself solely owns the rights to "Reasonable Doubt".

Dash couldn't immediately be reached for comment.

According to a complaint filed on Friday, Dash has already created a non-fungible token – a unit of data on a blockchain certifying ownership of a unique digital asset – of his alleged copyright interest in Jay-Z's 1996 album.

The complaint said Roc-A-Fella convinced an auction website last week to cancel a planned Wednesday sale of the NFT, but that Dash has been "frantically scouting" for another venue.

"The clock is ticking," the complaint said.

Roc-A-Fella said the auction announcement "makes clear" that Dash "represents that he owns — and is selling — the copyright and rights to all future revenue generated by the album."

"But Dash merely owns a 1/3 equity interest in RAF, Inc.; he does not own the copyright," the complaint said.

Jay-Z himself sued photographer Jonathan Mannion – who shot the cover of "Reasonable Doubt" – last week for allegedly misusing his image on merchandise.

The case is Roc-A-Fella Records Inc. v. Dash, U.S. District Court for the Southern District of New York, No. 1:21-cv-05411.

For Roc-A-Fella: Alex Spiro, Luke Nikas and Paul Maslo of Quinn Emanuel Urquhart & Sullivan

Attorney information for Dash wasn't immediately available.

Read more:

IN BRIEF: Jay-Z sues ‘Reasonable Doubt’ photographer over image use

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Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets, for Reuters Legal. He has previously written for Bloomberg Law and Thomson Reuters Practical Law and practiced as an attorney. Contact: 12029385713