Constitution, Crypto and Copyright

Last Thursday, 18 November 2021, saw Sotheby’s auction off an exceedingly rare first-edition printed copy of the United States Constitution. The document went for $43.2million, a world record for any book, manuscript, historical document or printed text.

It is one of just thirteen copies of the Official Edition of the Constitution surviving from a printing of 500 issued for submission to the Continental Congress and for the use of the delegates to the Constitutional Convention. It is the very first appearance of the final text of the Constitution, now the longest continuing charter of government in the world.

The auctioned copy was purchased from Sotheby’s by S. Howard Goldman in 1988, becoming the crowning jewel of his magnificent collection of historical American books and manuscripts. After Howard’s death in 1997, his widow, Dorothy Goldman, became the custodian of the Constitution, which she made the cornerstone of a remarkable collection of primary materials that place the Constitution in historical context.

The Constitution went to auction with an estimate of $15 - 20mil and was ultimately sold for a hammer price of $41mil to billionaire investor Kenneth Griffin. It was a close race with two bidders battling on the telephones for eight minutes until the hammer finally fell.

New owner, Griffin, is founder of the $43 billion investment firm Citadel and a prominent art collector. He plans to loan the work to the Crystal Bridges Museum of American Art, in Bentonville, Arkansas, where it will be on display.

"The U.S. Constitution is a sacred document that enshrines the rights of every American and all those who aspire to be," Griffin said in a statement. "That is why I intend to ensure that this copy of our Constitution will be available for all Americans and visitors to view and appreciate in our museums and other public spaces."

But it was the runners up who gained perhaps the most mainstream attention in the lead up to this auction. A group of crypto currency fans known as ConstitutionDAO we one the other end of the second phone that evening, showing off the real-world buying power of the crypto community.

This DAO (Decentralized Autonomous Organization) is in fact an 18,800-person chat group - known as a Discord channel - that managed to crowdfund over $40 million in less than a week from over 17,000 Ethereum wallets, for the sole purpose of purchasing the rare Constitution document.

Similar groups of people on the internet have banded together before to score auction-block wins. But their trophies usually take the form of digital treasures, such as non-fungible tokens (NFTs), whose ownership can be governed by smart contracts. Digital artist Mark Winkelmann, aka Beeple, made history in March 2021 when his collection of digital artworks titled Everydays: The First 5000 days commanded a stunning $69 million at a Christie’s auction, supercharging the worldwide market for NFTs.

Despite the loss, ConstitutionDAO’s, $47 million crowdsourcing achievement and auction attempt, hopes to be a similar signal for online investment collectives.

In a message to fellow members, one DAO organiser addressed the reason behind their loss: “Lots of questions coming up about why we stopped the bidding where we did. The proper care and maintenance of the Constitution requires a reserve that is needed to insure, store and transport the document and we calculated the absolute max we could go to whilst still meeting these requirements. The opposing bidder passed that max, and we were unable to go any higher while still ensuring that we could properly care for the document.”

The ConstitutionDAO website is now offering refunds to all it members but hopes to keep the group together and develop a plan for future investments. A message from the Core Team emphasises the human side of this new digital movement.

“We want to thank you all so much for your support and feedback so far, and while it's disappointing for all of us to have lost the bid, seeing our community rally together to accomplish what everyone thought was impossible has been inspiring and heart-warming. The future is bright, and we want to emphasize that we're not done here, and we're committed to moving forward carefully, thoughtfully, and correctly.”

 

Elsewhere in the world of cryptocurrencies, a new crypto token has come under fire from a prominent literary estate who has successfully banned its use due to licencing and copyright infringement.

The new coin launched in August 2021 with the name JRR Token and promoted itself as “the one coin to rule them all”. The token’s whitepaper – a document explaining how the token works – was written as if on a scroll of parchment and included ‘a bunch of Lord of the Rings jargon’ and featured characters similar to those from Tolkien’s Middle Earth.

Crypto blog, Mint Dice, described the new coin as ‘extremely risky’ for investors, and said despite an endorsement from Billy Boyd who played Pippin in the film adaptations, fans of JRR Tolkien had already begun to argue whether the notion of a decentralized cryptocurrency fit into the author’s vison and ideology.

Token creator Matthew Jenson, a developer from Florida, planned to create a max of $19 million coins, and then ‘burn’ 15% of these to create scarcity in the system.  

But it seems Jensen’s work has been in vain as this week the JRR Tolkien Estate won a legal battle against him and forced him to shut it all down.

A panel from the Geneva-based World Intellectual Property Organization (WIPO) ruled that Jensen’s domain name Jrrtoken.com was “confusingly similar” to the trademark owned by the Tolkien estate.

The developer attempted to argue that the words ‘Token’ and ‘Tolkien’ had been interchanged as “parody rather than bad faith”, but the panel ultimately disagreed and stated “there is no doubt that the respondent was aware of Tolkien’s works and created a website to trade off the fame of these works,”

Jensen agreed to shut down the project – affecting 150 people who currently own the tokens - delete the infringing content from all relevant websites and social media accounts and transfer the domain name to the Tolkien estate. He was also made to pay an undisclosed amount to cover the estate’s legal fees.

“This was a particularly flagrant case of infringement, and the estate is pleased that it has been concluded on satisfactory terms,” said Steven Maier, the estate’s UK lawyer.

The Tolkien estate has been described as “vigilant in preventing unauthorised parties from taking advantage of the JRR Tolkien name”, and whilst they have gone after many parties for unauthorised publications in print and media, this is the first time the estate has taken down a cryptocurrency.