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Last April 3, 2023, the U.K. Intellectual Property Office (UKIPO) published a Practice Amendment Notice (PAN) containing guidance for the classification of NFT related trademarks for virtual goods and services provided in the Metaverse.
Below we analyze its main contents.
UKIPO’s position on NFT related trademarks
In the recent period, the UKIPO has received an increasing number of trademark applications, especially concerning new non-fungible tokens (NFTs). Until now, there has been no specific rule in the UK about framing the terms “NFTs” and “virtual goods and services” more generally. However, these new guidelines are now intended to be applied immediately and, in particular, to provide more clarity about the above issues.
With this PAN, it has been determined that the term “NFT” alone no longer applies as a classification term since it would be inherently vague if lacking the indication of the good to which it refers. Instead, for example, the expression “digital art authenticated by the non-fungible token” would be considered non-generic and, therefore, eligible.
In any case, what is striking is the position taken by the UKIPO about the potential crossover between physical and virtual products. In fact, the guidelines move from the position that NFTs can be used for the purpose of authenticating anything and, therefore, not only digital goods. This means that virtual goods will be treated in the same way as physical goods.
Consequently, according to the UK NAP, products clearly defined as “authenticated by NFTs” will be able to be registered in the appropriate commodity class for those real goods.
With regard to services, on the other hand, the UKIPO clarified that there is no reason why a service capable of being delivered by virtual means cannot be delivered within the metaverse. Therefore, again, for example, “retail services related to the sale of virtual clothing, digital art, audio files, authenticated by non-fungible tokens” will no longer have to be registered under Class 9 but will also be accepted for Class 35, normally provided for real services.
However, it is recognized that this type of approach may not be possible for all types of services in the metaverse. On this point, the NAP offers the example of food delivery, which is considered a service in class 43 in the physical world, but on the other hand, it is uncertain how such a service can actually be rendered and, therefore, how an avatar can “consume” food in the metaverse. So, for some types of services, it is not always obvious how these can be provided on digital platforms, and in this regard, the examiner will seek clarification.
Comparison with the EUIPO guidelines on NFTs
It should also be noted that last year, the European Union Intellectual Property Office (EUIPO) also issued similar guidance ahead of the 12th edition of the Nice Classification.
The position taken by the UKIPO seems to be in line with what is prescribed by European guidance regarding the generality and vagueness of the terms “NFT” only. In fact, recent cases have shown that the EUIPO tends to reject trademark applications filed for generic NFT terms, requiring the owners themselves to specify in detail the type of digital element that such NFT authenticates.
Opposite, however, is EUIPO’s position on the related crossover of virtual and real goods. In fact, at the time, the EUIPO had coined a special term for the inclusion of NFTs, namely the term “downloadable digital files authenticated by non-fungible tokens,” specifying that, in this way, similar virtual products and services could be registered exclusively in Class 9.
In conclusion, the position taken by the UKIPO seems to benefit English trademark owners even more than European trademark owners, as they, in order to avoid litigation related to the use of their sign in the Metaverse, will not be forced to resort to prior protection by registering their trademarks even in class 9.
On a similar topic, you may find the following guide useful “Metaverse, NFTs and their legal issues guide from DLA Piper“.
Photo by Choong Deng Xiang on Unsplash