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UKIPO publishes long-anticipated guidance on NFTs, virtual goods and virtual services

Posted on 10 May 2023

In response to significant numbers of trade mark applications containing terms relating to services in the metaverse, virtual goods and non-fungible tokens (NFTs), intellectual property offices around the world are issuing guidance to applicants as to how to frame their applications and the specifications of goods and services for which they seek protection.

Back in October 2022, the European Union Intellectual Property Office (EUIPO) released its guidance in relation to EUTMs (discussed in our article here). The United Kingdom Intellectual Property Office (UKIPO) has now also issued a Practice Amendment Notice relating to trade mark specifications for NFTs, virtual goods/services and the metaverse (see here).

Whilst the UKIPO has taken a similar approach to that of the EUIPO in respect of both virtual goods and virtual services, its approach in relation to NFTs differs. For this reason, care must be taken when embarking on trade mark filings for both UKTMs and EUTMs to ensure specifications are adjusted accordingly to avoid the risk of objection.

What is the EUIPO's position?

As a reminder, the EUIPO's guidance confirms the following in relation to EUTMs:

  • EUTMs relating to virtual goods and NFTs fall under Class 9, with virtual services being classified in the relevant service class (e.g. "education services provided by virtually means" would sit in class 41 alongside "education services").
  • The terms “virtual goods” and “NFTs” on their own lack clarity and precision and will therefore be unacceptable. “Virtual goods” must be specified by stating the content to which the virtual goods relate (e.g. downloadable virtual goods, namely, virtual clothing).
  • The type of digital item authenticated by the NFT must be specified. For example, the EUIPO indicates that "downloadable music authenticated by non-fungible tokens" would be acceptable.

What is the UKIPO's position, and how does it compare to that of the EUIPO?

Similar approach in relation to the treatment of virtual goods and virtual services

The UKIPO's guidance confirms the following:

  • UKTMs relating to virtual goods fall under Class 9, with virtual services being classified in the relevant service class.
  • The term "virtual goods" as a standalone term is too vague and will therefore be unacceptable. Virtual goods need to be clearly defined (e.g. "downloadable virtual handbags").
  • Claims for virtual services must be capable of being delivered via virtual means. The UKIPO confirms that "education and training services delivered by virtual means" would be acceptable but notes that, where it is not immediately apparent that the service can be provided inside the metaverse / virtually, the examiner will seek clarification.

The UKIPO has taken a different approach to the EUIPO in relation to NFTs

The UKIPO's treatment of NFTs is slightly different to that of the EUIPO. 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:

  • "Digital art authenticated by non-fungible tokens [NFTs]";
  • "Downloadable graphics authenticated by non-fungible tokens [NFTs]"; and
  • "Digital audio files authenticated by non-fungible tokens [NFTs]". 

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 the EUIPO approach). The UKIPO provides the following examples:

  • "Artwork, authenticated by non-fungible tokens [NFTs]" [Class 16];
  • "Handbags, authenticated by non-fungible tokens [NFTs]" [Class 18]; and
  • "Training shoes, authenticated by non-fungible tokens [NFTs]" [Class 25].

What steps should brands be taking to ensure their IP is sufficiently protected in the metaverse?

  • A trade mark audit is advisable to ensure registered rights offer sufficient coverage in the virtual world. 
  • As we discuss in this article published by LexisPSL, brands may also wish to register blockchain domains.
    • Registering blockchain domains (such as .nft, .eth, .crypto and .wallet) is recommended from a defensive perspective to prevent against ethersquatting. 
    • It is likely to be cheaper to acquire blockchain domains now, rather than to purchase them from third parties in the future.
  • Where relevant, applications for registered designs should be drafted to expressly protect use in the virtual world.
    • Whilst the UKIPO is yet to opine on this point, the EUIPO has recommended that applicants should select both the physical and virtual product indications when applying to register a design for use in the virtual world.
    • For example, when registering a design for virtual clothing to be used in the metaverse, the applicant should indicate both "clothing" and "graphic symbols".
    • The design can still be used on any 'product', but providing a product indication will assist with searching.
  • Enforcement strategies should be reviewed to ensure protection in the metaverse is considered.
    • A well-balanced enforcement strategy will take account of the types of use that should be opposed, the types of use that can be tolerated and the types of use that can be embraced.
  • Watch services should be set up to monitor for infringement.
    • It is important to ensure the watch is scraping not only websites but also marketplaces (such as OpenSea), 3D printing sites (such as Thingiverse), social media, app stores and targeted advertising. 
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