NFTs have been significantly popular in 2022 from a trademark law perspective like many other fields. As many more businesses in various industries have carried their trademarks to Metaverse and launched NFT collections in 2022, the number of trademark applications covering NFTs has significantly and proportionally increased .
To satisfy the high demand and urging need caused by this trend, European Union Intellectual Property Office (“EUIPO”) published a guideline that sets the main principles regarding goods/service classification for trademark applications covering NFTs (“the Guideline”). According to EUIPO’s approach set out in the Guideline, NFTs and virtual goods are proper to class 9 as these are treated as digital content or digital visuals. However, since the sole term “NFT” or “virtual goods” does not suffice to clarify the subject of the registration, the content to which NFTs and virtual goods relate must be further specified in the application. For instance, a trademark application covering “downloadable music files authenticated by NFTs” could be filed in class 9. On the other hand, trademark applications for services related to NFTs will be subject to general principles governing the classification of services. In this respect, trademark applications covering NFTs are mostly filed in classes 35, 36, 41 and 42. In this regard, trademark applications for “online platform providing services for trading NFTs” in class 35, “entertainment services provided by the use of virtual goods authenticated by NFTs” in class 41, “providing software as a service for transactions such as buying and selling NFTs” in class 42 could be properly filed.
Accordingly, the 12th Edition of Nice Classification, the goods/services list published by the World Intellectual Property Organization, has been updated by adding “downloadable digital files authenticated by NFTs” as a sub-class under class 9.
We expect that principles regarding the evaluation of the similarity of goods/services and the likelihood of confusion between trademarks covering NFTs will be established by Trademark Offices through their decisions later.
In this respect, two separate exemplary decisions have been rendered by the United States Patent and Trademark Office (“USPTO”) in 2022. The trademark application consisted of “Gucci” as the word element covering “downloadable virtual goods” in class 9 and “related digital services” in classes 35 and 42 filed by Fenesha Amana Holmes, and the trademark application consisted of “Prada” as the word element covering the same classes with Gucci application filed by Reath Mohammed have been directly rejected by USPTO after the preliminary examination. USPTO, in both decisions, took into consideration that Gucci and Prada are well-known trademarks and evaluated that companies in the fashion industry started to carry out business in the virtual world as well; therefore, consumers perceive physical world’s goods/services associated with the virtual world’s goods/services.
As a very recent development, in the case filed by Hermes against Mason Rothschild alleging that Rothschild has converted globally-known Birkin bags to NFTs and traded them on the Opensea platform with no authorisation, the jury concluded that Hermes’s trademark rights had been infringed as these NFTs cause a likelihood of confusion in the part of consumers.
It is important to note that the well-known status of trademarks subject to the decisions affected the evaluation of the likelihood of confusion, but the most vital takeaway from these decisions is NFTs could be deemed similar to real-world goods and services. We are of the opinion that these decisions establish that trademark owners are entitled to protect their trademarks against similar trademarks covering virtual goods and NFTs.
In line with global developments, Turkey focused on NFTs as well, and the Digital Transformation Office of the Presidency of Turkey defined NFTs as “qualified intellectual property deed”.
Also, many trademark applications covering NFTs are filed before Turkish Patent and Trademark Office (“Office”). We see that Office 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 thereunder and applies the general trademark registration procedure if such applications meet the legal requirements.
Results of disputes arising from trademark infringement claims caused by NFTs and practices of courts and IP offices around the world will enable us to better observe how NFTs will be evaluated under trademark law in the long term.