Trademark use in non-fungible tokens (NFTs) and for virtual goods in the metaverse is increasing rapidly. Examples of growing trademark use in NFTs and the metaverse include the cases of Nike v StockX and the Hermès v MetaBirkins. By not extending their existing trademarks to cover NFT and metaverse uses, trademark holders may be taking an unnecessary risk that could be quickly and affordably managed. Failure to have the right trademark classes selected means that the registered trademark may not provide exclusive rights to use, license and sell the trademark for certain business activities.
NFTs are a type of file permanently stored in a blockchain. An NFT records a chain of ownership for any digital or physical item and also records metadata such as a link to the digital item, for example, an image file, audio file or video file. The metaverse is an integrated network of 3D virtual worlds accessible via a virtual reality headset worn by a user.
A trademark is limited by its nominated classes, that is, the categories of goods and services under which the trademark is used. Trademark classes allow two similar or identical trademarks to coexist without infringing on one another. This is possible where the classes and goods/services are completely different. For example, the same word for a trademark may be used by both a clothing brand and a medical supply business, as it is unlikely that consumers will confuse these two brands.
A new separate trademark application must be filed to add additional classes to a registered trademark in most countries. It would be unsurprising that most commercially astute trademark holders have an intention to use NFTs for their goods and services or launch virtual goods and services in the metaverse within 3 years from the filing date of the new application.
The proper classification for virtual goods, NFT-related goods and other goods associated with e-sports and the metaverse is class 9. Virtual goods should be further specified by explicitly describing the content to which the virtual goods relate (downloadable virtual goods, namely, virtual sporting equipment, virtual sneakers, virtual food items or virtual household items, etc). It would be prudent for trademark holders to audit their existing trademark registrations to confirm whether the scope of their trademarks covers class 9 as described above. Other relevant trademark classes to consider include downloadable virtual goods, namely computer programs (class 9), retail store services featuring virtual goods (class 35), entertainment services (class 35), online non-downloadable virtual goods and NFTs (class 42), and financial services, including digital tokens (class 36).
For further information, official guidelines have been published by the European Union Intellectual Property Office here, and we expect other national IP offices to similarly publish their guidelines.
“Trademark holders that have invested heavily in their brands are probably thinking of selling their branded virtual goods and services in the metaverse or as NFT-related goods in the future. Trademark holders can manage the risk of unauthorized use of their trademarks in NFTs and the metaverse easily by extending coverage of their trademark registrations as soon as possible”.
Written by James Wan, patent & trademark attorney at the IP specialist firm James Wan & Co