How to protect goods and services in the virtual world?
At the end of 2021, Nike filed several trademark applications for the purpose of virtual use before the USPTO, which created a buzz on social media. In particular, Nike’s trademark applications were directed towards “Downloadable virtual goods, namely, computer programs featuring footwear, clothing, headwear, eyewear, bags, sports bags, backpacks… for use online and in online virtual worlds(…)” (1). This news sparked rumors of a potential incursion of Nike in the metaverse. These rumors were confirmed a few weeks later by the Nike’s launch of a new web3-enabled platform named .Swoosh, aimed at encouraging a new digital community.
For the less initiated, let’s recall that the metaverse is the contraction of “meta” and “universe” and refers to a virtual world presented as the future of the Internet, or Web 3.0, which will be dominated by 3D interactions in virtual spaces.
The first quarter of 2022 was then marked by legal action initiated in the US by Hermès against the American artist Mason Rothschild, who had created and distributed in 2021, a series of a hundred NFTs called MetaBirkins, directly inspired by the iconic Hermès bag. As a reminder, an NFT or a non-fungible token is information encrypted in a blockchain in the form of a token (2), which gives this digital certificate an authentic and unique character. NFTs can be used in many fields, such as art, fashion, sport, video games, music, media, and so on. The NBA (National Basketball Association) was one of the first to commercialize a series of NFTs featuring videos of the most iconic basketball shots of the competition, for its fans. Regarding the abovementioned MetaBirkins’ case, in early February, Mason Rothschild was found liable by the Manhattan Federal Court of trademark infringement, dilution and cybersquatting, and was ordered to pay $133,000 in damages to Hermès. The latter has since filed a Federal application for its Birkin trademark for metaverse and NFTs applications (3).
This Web 3.0 news story demonstrates, once again, the importance of protecting intellectual property, and in particular trademarks, in the virtual world. Indeed, businesses that are likely to distribute their goods and services in a virtual environment have every interest for better protecting their trademarks for metaverse and/or NFTs applications. Nevertheless, once the issue of whether or not to protect their goods for virtual reality environments and NFT purposes is settled, the difficulty for applicants will be determining how to protect their trademark while complying with the requirements of classification and clarity of the description of the goods and services. For instance, do goods such as “virtual clothing” fall within class 25, which historically includes clothing, or do they belong to class 9, which includes digital content? In this regard, the EUIPO and WIPO quickly provided an answer to clarify the ambiguity surrounding classification and designation of the goods.
Indeed, in view of the increase in the number of trademark applications containing terms relating to virtual goods and non-fungible tokens (NFTs), the EUIPO has clarified its approach by specifying that “virtual goods” are proper to class 9 because they are considered as digital contents or images. However, the term “virtual goods” itself will not be accepted and will have to be further specified by stating the content to which the virtual goods relate (e.g., “downloadable virtual goods, i.e., virtual clothing”) (4).
WIPO has also taken into account this new era of NFTs in its 12th edition of the Nice International Classification of Goods and Services, which came into force on January 1st, 2023. According to WIPO, the term NFT or non-fungible token is not acceptable per se. In the same way that “virtual goods” are integrated into class 9, this term should be precisely specified as “downloadable digital files authenticated by non-fungible tokens [NFT]”.
With regard to services, applicants may consider protection for “provision of online marketplaces for buyers and sellers of downloadable virtual goods authenticated by non-fungible tokens [NFTs] for use in virtual environments” in class 35 or for “entertainment services providing an online virtual environment for the exchange of virtual goods” in class 41.
Are you wondering whether it is appropriate to protect your distinctive signs in the virtual world? The Attorneys of Beau de Loménie are always available to answer your questions and assist you in implementing your projects.
(1) Federal trademark application n°97095855
(2) Article L.552-2 of the Monetary and Financial Code (CMF): “For the purposes of this chapter, a token is any intangible asset representing, in digital form, one or more rights that can be issued, registered, retained or transferred by means of a shared electronic recording device that makes it possible to identify, directly or indirectly, the owner of said asset.”
(3) Federal trademark application n° 97566629