NFT'S

Protecting NFTs And Cryptofinance Services As Trade Marks – Trademark


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The EUIPO recently published new guidance on the
classification of trade mark applications for non-fungible tokens
(NFTs). This guidance is helpful as we are seeing many filings in
this area; however, further clarification may be
needed.

The EUIPO guidance is available here. In summary, it states that:

  • Virtual goods are proper to class 9 because they are treated as
    digital content or images, but the term virtual goods on its own
    lacks clarity and precision, so the content to which the virtual
    goods relate must be specified.

  • The 12th edition of the Nice Classification will
    incorporate the term “downloadable digital files authenticated
    by non-fungible tokens” in class 9. The term NFT on its own is
    not acceptable and the type of digital item authenticated by the
    NFT must be specified.

Comments on the guidance can be submitted up to 3 October 2022,
so there may be further developments after that. However, this
approach provides welcome clarity for applicants and is also in
line with practice we have seen in other offices, such as the Swiss
IPI. The UK IPO has not published guidance on this question yet,
but hopefully they will take a similar approach.

On the cryptofinance side (Class 36), the practice currently
developing with European IPOs and WIPO is to accept terms such as
‘financial services relating to virtual (or digital)
currencies’, rather than ‘cryptocurrency services’ or
terms including the prefix ‘crypto-‘, which we found has
attracted some specification objections.

An important jurisdiction that might prove challenging in this
area is China: with its strict approach to classification, unless
new categories are admitted into the local ‘sub-classes’
practice, it may be difficult to achieve adequate protection for
NFTs and cryptofinance services.

At Keltie, we are seeing more and more interest in filing trade
mark applications relating to NFTs and cryptofinance, particularly
among clients in the art, sport and fashion sectors.

In the United States, over 4,800 trade mark applications for
NFTs and related goods/services were filed in the first six months
of this year, according to US trade mark attorney Mike Kondoudis, who tracks NFT applications.
He has also identified over 3,100 US applications for digital or
cryptocurrencies (and related services) and over 3,300 for
Metaverse and related virtual goods/services.

With such large volumes of applications, the risk of crowding is
high, particularly given the popularity and scope of Class 9. That
will make clearance searching in Class 9 increasingly difficult,
and lead to conflicts that may in fact be conflicts only on paper,
but that would still prevent us from clearing proposed new
marks.

According to The Fashion Law blog, US examiners have
recently objected to an intent-to-use application for MODAVERSE on
the basis of a likelihood of confusion with an existing
registration for MODAVERS and an application for Meta Gala due to
its similarity to Met Gala. In Europe, where IP offices do not
examine applications on relative grounds, third parties will need
to be vigilant for similar applications.

In our opinion, there are two main challenges for IP offices
that arise from the boom in NFT applications.

First, in the short term, examiners need to educate themselves
about terminology relating to NFTs and cryptofinance, so that they
can identify terms that are descriptive or lacking distinctiveness.
The evolving nature of this sector means that there are new terms
of art emerging and examiners need to be familiar with these. We
have noted acceptance of some marks in this area that are very
close to the line in terms of descriptiveness. Rigorous examination
based on knowledge of the relevant new vocabulary of the NFT and
cryptofinance sector will help ensure that protection is not
granted to terms that should be free for others to use.

Second, and looking further ahead, the rise of NFTs will
increase pressure on WIPO to review the Nice Classification and
consider dividing Class 9. This class already covers a broad range
of goods and if virtual goods are also registered here, as set out
in the EUIPO guidance, then the overcrowding in this Class will
increase – with all the problems that brings for searching
and clearance.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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