UKIPO guidance: trade mark protection for NFTs and virtual goods and services
Published on 14th Apr 2023
Clarity given on classification of NFTs and virtual goods and services, including those provided in the metaverse
The UK Intellectual Property Office (UKIPO) has reported a steep increase in trade mark applications relating to non-fungible tokens (NFTs) and virtual goods and services. Accordingly, it has released clarificatory classification guidance, which follows similar, though less detailed, updates from the EU Intellectual Property Office (EUIPO) and the US Patent and Trademark Office.
The UKIPO makes explicit points that are important for brand owners looking to register UK trade marks covering NFTs and virtual goods and services:
- NFTs will not be accepted as a classification term on their own – they must relate to an underlying asset.
- Physical and virtual assets can be authenticated by NFTs.
- NFTs can be marketed and sold in online marketplaces.
- Virtual goods must be clearly defined.
- Services capable of being delivered virtually will be accepted.
- Services provided in the metaverse can be accepted (albeit subject to slightly different requirements).
NFTs are digital assets that are often used as evidence of ownership of virtual or physical assets. As NFTs cannot be separated from their underlying assets, the UKIPO will not accept "NFT" as a classification term on its own without reference to the asset to which it is linked. The UKIPO will accept the following types of wording in class 9:
- "Digital art authenticated by non-fungible tokens [NFTs]".
- "Downloadable software, namely, [list the type of goods], authenticated by non-fungible tokens [NFTs]".
This guidance is in line with the 12th edition of the Nice Classification which includes in class 9 “Downloadable digital files authenticated by [NFTs]".
As NFTs can also prove ownership of physical goods, those physical goods that are clearly defined as being authenticated by NFTs are also accepted by the UKIPO; for example:
- "Handbags, authenticated by non-fungible tokens [NFTs]" in class 18.
- "Training shoes, authenticated by non-fungible tokens [NFTs]" in class 25.
Additionally, NFTs can be retailed via online marketplaces in the same way as other goods and services. Therefore, the UKIPO will accept the following terms 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".
Further, it may be possible to link membership of a club or entry to an event to an NFT. However, this service would be placed in class 41 as an entertainment service.
Virtual goods are placed in class 9, as the goods to which they refer consist of data, such as digital images. These goods will only be accepted if they are clearly defined – for example:
- "Downloadable virtual clothing, footwear, or headgear".
Virtual services, including in the metaverse
If it is possible to deliver a service virtually, the UKIPO will accept these services:
- "Conducting interactive virtual auctions" in class 35.
However, the UKIPO also acknowledged that a service capable of being delivered virtually can also be provided inside the metaverse. On this basis, it will accept services provided in the metaverse in the same class as more traditional forms of delivery such as, again:
- "Conducting interactive auctions via the metaverse" in class 35.
Services in the metaverse may not fall within the same class as their normal form of delivery. For instance, it may be possible to order food and drink inside the metaverse to consume in the physical world, but a metaverse avatar “consuming” food and drink within the metaverse would not be a class 43 service. Such services may be covered by a more general category of services as what is being provided is access to a virtual world or the metaverse for the purpose of entertainment. The following language may be appropriate:
- "Entertainment services, namely, provision of a virtual reality or metaverse-based simulation gaming service".
Osborne Clarke comment
This clarificatory guidance, which applies immediately, is welcomed as it gives a strong indication of how the UKIPO will assess trade mark applications relating to NFTs and virtual goods and services. Given the imprecision of some of this new and developing terminology, the guidance is clear that examiners will raise objections to any perceived vagueness in trade mark specifications.
The UKIPO also acknowledges that it will accept specifications covering physical goods clearly defined as authenticated by NFTs, which is a level of detail that was not provided in the EUIPO's equivalent update. It will be interesting to see whether this will result in any divergence in the practices of the EUIPO and the UKIPO.
Overall, this guidance highlights that intellectual property offices are adapting their trade mark practices and guidelines to keep up to speed with the increasing digitalisation of the marketplace and developing technologies. Indeed, the UKIPO's guidance will be kept updated as and when new developments arise. This is good news for businesses seeking to expand their offerings and IP rights into the metaverse.