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It is not a surprise that the UK IPO has seen an increase in the number of trade mark applications which attempt to protect goods and services offered in the Metaverse. In Tribunal Practice Notice 2/2023 (“TPN 2/23”), which was published in April 2023, the UK IPO issued guidance on the correct classification of non-fungible tokens (NFTs) and virtual goods and services.
What is a Non-Fungible Token?
An NFT is a unique digital certificate which authenticates ownership of digital or physical assets. Although the NFT itself is merely a token of data which consists of an entry on a blockchain, it is inextricably linked to the asset (usually digital) to which it relates. The purpose of the NFT is primarily to represent ownership of the asset.
Will the UK IPO accept an NFT?
The UK IPO will not accept “non-fungible tokens” or “NFTs” as a term alone as the term is considered too vague. It will be necessary to provide an indication of the product to which the NFT relates. The UK IPO has provided the following list of examples of terms which it considers acceptable in class 9:
digital art authenticated by non-fungible tokens [NFTs]
downloadable graphics authenticated by non-fungible tokens [NFTs]
downloadable software, namely, [list the type of goods], authenticated by non-fungible tokens [NFTs]
digital audio files authenticated by non-fungible tokens
downloadable digital files authenticated by non-fungible tokens [NFTs]
TPN 2/23 further clarifies that a NFT could be used to authenticate physical as well as digital goods. Physical goods defined as being authenticated by NFTs should be classified in the usual goods class, for example “handbags authenticated by non-fungible tokens [NFTs]” is properly classified in class 18.
NFTs are also assets which are capable of being sold and the following terms are acceptable in class 35:
Retail services connected with the sale of [e.g. virtual clothing, digital art, audio files] authenticated by non-fungible tokens
Provision of online marketplaces for buyers and sellers of goods and services which are authenticated by non-fungible tokens
Where an NFT is used to link membership of a club or entry to an event to an NFT, this service will fall within class 41.
It is clear from the examples given that the UK IPO considers that NFTs are not protectable as an independent term and do not automatically fall in class 9. Rather, NFTs are inherently linked with the product or service in relation to which they are used and should be properly classified in the same class that product or service.
All virtual goods should be included in class 9, regardless of which class the corresponding physical product would fall within. This is because virtual goods are essentially data, such as digital images. When including virtual goods in specifications, it is necessary to specify the nature of those goods for example, “downloadable virtual handbags”.
Where services are provided virtually, the UK IPO will accept virtual services in the usual class for those services, for example “education delivered by virtual means” is proper to class 41, which is the correct class for education services. Where these virtual services are provided within the Metaverse, the same approach will apply, for example, “education delivered via the Metaverse” will also be acceptable in class 41.
Not all services can be provided within the Metaverse. Where it is not clear how services could be provided within the Metaverse, the UK IPO will raise an objection requesting clarification. For example, whilst food and drink could be ordered in the Metaverse for delivery and consumption in the real world, “delivery” of virtual food in the Metaverse for consumption by an avatar will not constitute a class 35 service.
A more general term may be more appropriate where the service that is actually being provided is access to a virtual world, for example, the following term will be accepted in class 41 “entertainment services, namely, provision of a virtual reality or Metaverse based simulation gaming service”.
How does this compare to other offices?
The UK IPO’s guidance follows guidance issued in the last year by the EU IPO and an update to the Nice Classification to incorporate NFTs.
The UK IPO’s practice on NFTs is in line with the 12th edition of the Nice Classification, published by WIPO 1 January 2023, which includes NFT related terms for the first time by adding “Downloadable digital files authenticated by non-fungible tokens [NFTs]” to the alphabetical list in class 9.
The practice adopted by the UK IPO is also in line with the guidance issued by the EU IPO, which clarifies that virtual goods are proper to class 9 but that it is necessary to list the nature of the product the virtual goods represent. Further, services relating to virtual goods and the Metaverse are also classified by the EU IPO in line with accepted principles of classifying services. A review of the US PTO’s online classification tool indicates that the UK IPO’s practice is also in line with the practice being adopted by the US PTO.
It is helpful to see the UK IPO, EU IPO and WIPO adopting the same principles when it comes to classification of NFTs as well as goods and services related to the Metaverse. Offices taking a consistent approach to classification should make it easier for trade mark applicants filing applications via the Madrid International Trade Mark system and will hopefully reduce the number of objections issuing as a result of different offices taking different approaches to classification. It is to be hoped that in the near further, other Trade Marks Offices around the world will issue similar guidance notes confirming that the same practice is being adopted elsewhere.
Whether you are an individual developer or large corporation, protecting your assets is vital. If you are concerned by any of the issues raised in this article you can contact us using the online enquiry form, email email@example.com or call +44(0) 20 7405 4044 to arrange a free and confidential consultation with one of our Trade Mark team.
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