Nike vs StockX: Trade Marks, NFTs and the Metaverse
The new virtual world presents a significant challenge for brand protection.
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The United Kingdom Intellectual Property Office (UKIPO) has recently published a Practice Amendment Notice (PAN) explaining how the UKIPO intends to classify goods and services such as non-fungible tokens (NFTs), virtual goods, and virtual services, such as those provided in the metaverse. The UKIPO has made this publication in response to the growing popularity of these terms in trade mark applications and to help applicants avoid objections that the terms of a trade mark application have been misclassified.
It is therefore important for applicants to be aware of these changes. This will help ensure you have appropriate trade mark protection and can avoid unnecessary delays and additional cost in the processing of a trade mark application.
The term “non-fungible token” refers to a unique token of data that is stored on a cryptographic blockchain and linked to a specific digital file, such as digital art, music or video. Once a digital file is converted into an NFT, the authenticity of the file can be validated against the entry on the blockchain containing the NFT. This allows the file to be traded in a similar way to original physical works of art.
As NFTs can theoretically be used to validate anything including digital files, but also physical goods, the UKIPO considers the term NFT to be inherently vague and therefore will not accept it as a classification term alone. To include NFTs in a trade mark application, the applicant should therefore clarify NFTs by what they are authenticating, for example by simply adding “authenticated by non-fungible tokens [NFTs]” after a description of what is being authenticated. The applicant should then use the class which applies to the goods or service being authenticated, for example the following would be acceptable:
Virtual goods are virtual counterparts of physical goods. As such, all virtual goods consist of essentially data only. Therefore, all virtual goods are classified under class 9 irrespective of the class of their physical counterpart.
As the term “virtual goods” covers all types of virtual goods, then it is too vague to be used alone and must be clarified with the type of virtual goods the applicant intends to cover. For example, the following are acceptable in class 9:
Virtual services are any service that is delivered by virtual means, this could cover delivering a personal training session by video conference or providing education services in a virtual world. This encompasses services that are provided in the metaverse, which relates to a digital reality that people can access to interact with others.
Where an applicant wishes to cover a service provided virtually, they can do so by simply clarifying that the service is “delivered by virtual means”. The virtually provided service is then classified in the same way as the service in a general sense, for example, the following are acceptable:
When protecting services provided virtually or “via the metaverse”, applicants should be careful to ensure the service can actually be provided in that way, for example, catering services provided via the metaverse require a physical person to be provided with catering services and not a virtual avatar.
If your brand is being used to offer NFTs, virtual goods and/or virtual services, then it is important that your trade mark protection covers these goods/services. As it is not possible to add new goods or services to a trade mark application/registration after it has been filed, this may require the filing of a new trade mark application.
However, if you already have trade mark protection, it may be that the virtual counterparts of the goods/services are already covered. This will mean that a new application is not required.
In relation to goods authenticated by NFTs, these will be protected by a trade mark registration protecting the goods in a broad sense. This is because the registration will protect these goods irrespective of how they are authenticated. So a registration protecting digital art will cover both digital art authenticated by NFTs and digital art not authenticated by NFTs.
Similarly, for virtual services, a trade mark registration protecting the services in a general sense will protect them irrespective of how they are delivered. Therefore, a registration covering education services will cover these services if they are delivered physically in a class room, or virtually in the metaverse.
In relation to virtual goods, as these are all essentially pieces of data and classified in class 9, then a trade mark registration covering their physical counterpart does not automatically cover the virtual version. Therefore, if virtual goods are important to the brand, you should ensure you have trade mark protection in class 9 for these virtual goods.
NFTs, virtual goods and virtual services are only likely to continue to grow in use and therefore it is welcoming that the UKIPO have set out how they should be protected with registered trade marks. However, it is important to note that many existing trade mark registrations will already cover NFT authenticated goods and services delivered virtually, so it is a good idea to review existing trade mark protection before filing new applications to ensure money is being spent effectively.
The complete UKIPO publication can be read here.
If you have any questions about NFTs or how to protect your brand, please get in touch to speak to one of our attorneys