An increasing number of companies are expanding their business into the virtual world. This market allows enterprises to present their products and brands in a new world. Players such as Nike, Adidas, and Gucci have moved into the metaverse, offering products, digital experiences, and even virtual events. For products, the business makes use of non-fungible tokens (NFTs).
There are numerous questions about the Metaverse and NFTs - including trademark issues.
1. From the perspective of the Trademark Offices, how are NFTs classified according to the Nice Classification, and is there anything to keep in mind when filing applications?
a) German Patent and Trademark Office
The German PTO classifies virtual goods represented by NFTs in Class 9. The alphabetical list of goods contains the term “downloadable digital files authenticated by non-fungible tokens [NFTs]” (see https://www.dpma.de/docs/marken/klassifika- tion_nizza/ncl12-2023_alphabet_waren.pdf).
The terms can be more precise, such as "virtual sneakers authenticated by NFT".
The German PTO does not comment on whether or in which cases it makes sense to also apply for the trademark in the corresponding classes of goods as well.
b) Italian Patent and Trademark Office
According to the UIBM (Ufficio Italiano Brevetti e Marchi), the NFT-related trademark falls under class 9, namely “downloadable digital files authenticated by non-fungible tokens [NFTs]”.
c) United Kingdom Intellectual Property Office
The UKIPO draws a distinction between NFTs that relate to digital assets (e.g. digital artwork authenticated by an NFT) and NFTs that relate to physical goods (e.g. a physical diamond that is authenticated by an NFT).
Where the NFT is linked to a digital asset, the related term will fall under class 9. The UKIPO provides the following examples:
However, where the NFT is linked to a physical good, the related term should sit in the relevant physical good class (i.e. not class 9, which is different from the EUIPO approach). The UKIPO provides the following examples:
d) European Union Intellectual Property Office
The EUIPO issued guidance for the applications referring to NFTs (see https://euipo.europa.eu/ohimportal/en/news-newsflash/-/asset_pub- lisher/JLOyNNwVxGDF/content/pt-virtual-goods-non-fungible-tokens-and-the- metaverse).
No comment can be found on a practice to apply for a trademark in the corresponding classes of goods as well.
e) United States Patent and Trademark Office
The USPTO does not consider an NFT to be a good or service. Its usual function is only to provide authentication of a digital or physical asset. The ID must specify the nature of the goods being authenticated or the services involving NFTs.
NFTs relating to digital assets are classified in Class 09. NFTs relating to physical goods or services are classified in the relevant good/service class. For example:
f) Türkiye
Turkiye applies the Nice classification system but there has not been any separate classification/specification for NFTs after the issuance of EUIPO guidance in this regard. However many trademark applications covering NFTs are filed before Turkish Patent and Trademark Office (“TPTO”). TPTO has a positive attitude to trademark applications covering NFTs and handles such applications like any other trademark application with no reservation or objection against the included goods/services list and applies the general trademark registration procedure if such applications meet the legal requirements.
Conclusion: First, it is important to distinguish whether the object associated with the NFT is a digital content or a real object. Some trademark offices draw distinctions here. Considering the different practices of the trademark offices, especially in the case of international registrations or extensions of trademark protection, applications should be filed in both class 9 and the associated class of goods.
2. How do offices or courts in individual states assess the similarity between real-world goods with NFTs?
a) German Patent and Trademark Office / German courts
Decisions of the German PTO or German courts on the similarity of NFTs and real goods are currently not known.
b) Italian Patent and Trademark Office / Italian courts
The only reported case on NFT is a decision of the Court of Rome which issued an injunction against the creator of NFTs featuring a football player's images. The creator reproduced, on an online fantasy football game based on NFT player cards hosted on the Binance platform, the registered trademarks owned by the Italian football club Juventus FC without obtaining proper authorization. Such cards displayed several iconic trademarks owned by Juventus and the contracted version of the club’s name “Juve”, typically used by fans.
Among other the Court ordered, “the defendant to withdraw from the market and remove from every website and/or from every page of a website directly and/or indirectly controlled by the same on which such products are offered for sale and/or advertised, the NFTs (non-fungible tokens) and the digital contents” (Court of Rome No. 32072/2022, 20/07/2022).
c) United Kingdom Intellectual Property Office / UK courts
Neither the UK IP Office nor the UK courts have yet considered this in any reported decisions.
d) European Union Intellectual Property Office / EU courts
Decisions of the EUIPO or EU courts on the similarity of NFTs and real goods are currently not known.
e) United States Patent and Trademark Office / US courts
HERMES INTERNATIONAL and HERMES OF PARIS, INC. v. MASON ROTHSCHILD (SD NY 2023)
Hermes owns the luxury handbag brand “Birkin”. Rothchild produced a series of images of the famous bag calling them “MetaBirkins”. Hermes asserted claims of trademark infringement, trademark dilution, and cybersquatting against Rothchild. Rothchild compared his use of the bags with Andy Warhol’s portrayal of the Campbell’s soup cans in his famous pop culture silk screens and asserted that his products were works of art commenting on the market for luxury goods and should be protected by laws governing free speech.
On February 14, 2023, following a six-day trial, a jury found defendant Rothschild liable on the claims of trademark infringement, trademark dilution, and cybersquatting and found that the First Amendment does not bar the defendant's liability. The jury awarded Hermes $133,000 in damages.
f) Türkiye
There has not been any reported Court decision in this regard, but there is the following decision of the TPTO evaluating the similarity between virtual and physical goods.
FWRD v. FWRD E-71248886-130-230215352 (March 31, 2023)
In December 2022, FWRD, LLC filed an opposition against the “FWRD” trademark application numbered 2022/117205 covering the “Underwear and outer clothing made from all kinds of materials, except those with a protective purpose, socks, mufflers, shawls, bandanas, scarves, belts; footwear: shoes, slippers, sandals; headgear: hats, flat caps, beanies, skullcaps, caps” in class 25 and “Services of gathering goods - namely, underwear and outer clothing made from all kinds of material, except those with a protective purpose, socks, mufflers, shawls, bandanas, scarves, belts; footwear: shoes, slippers, sandals; headgear: hats, flat caps, beanies, skullcaps and caps to enable customers to examine and purchase them with convenience (the specified services can be provided by retail and wholesale shops, electronic media, catalogues and other similar methods)” in Class 35 among others, as it was identical to its earlier “FWRD” trademark covering the “Downloadable virtual goods in the field of fashion; downloadable virtual goods in the field of fashion for use in virtual environments and worlds; downloadable virtual goods in the nature of clothing, jewellery, watches, bags, headwear, footwear” in Class 9, “Retail store and online retail store services featuring virtual goods - namely, clothing, jewellery, watches, bags, headwear, footwear, eyewear and other retail items” in Class 35 and “Entertainment services - namely, providing online, non-downloadable virtual clothing, jewellery, watches, bags, headwear, footwear and other retail items” in Class 41, among others. Upon examination of the opposition, the Trademarks Department of the TPTO determined that the trademarks were similar, and that the virtual and online goods/services covered by the FWRD INC.’s trademark were similar to the physical goods/services covered by the opposed trademark. As a result, the trademark application was rejected in accordance with Article 6/1 of the Industrial Property Law. The decision is finalised. This decision of the TPTO is remarkable by acknowledging that virtual and physical goods/services are similar or related.
Conclusion: Courts do assume a similarity between goods authenticated by NFTs and real goods. Arguments can easily be found, especially in the case of identity of the trademarks, since the public is likely to be aware of the practice that a manufacturer, for example of luxury goods, also offers corresponding goods in the metaverse.
Further decisions will certainly follow in due course.
Miscellaneous:
Comprehensive information on the legal implications of NFTs can be found in the NFT white paper published by the International Trademark Association (INTA):
https://www.inta.org/wp-content/uploads/public-files/perspectives/industry-re- search/NFT_REPORT-070323.pdf.