The capitalization of digital resources has raised questions regarding the protection of related Intellectual Property Rights in the virtual world, prompting trademark applications to be filed accordingly. Last September, the Benelux Office of Intellectual Property (BOIP) noted an increase in such trademark applications for virtual goods and non-fungible tokens (NFTs).

In order to abide by related legal provisions, trademark applications must include one or more categories of goods or services for which the trademark will be used; these categories are referred to as "classes" and are based on the Nice Classification, which comprises 34 classes of goods and 10 classes of services. For each "class", the trademark application must also specify a list of goods and services involved.

Yet, the application for a trademark relating to new goods or services - such as virtual goods, NFTs and digital assets in general - may be challenging and give raise to very interesting and novel questions.

UNDERSTANDING THE DIFFICULTIES

A 'virtual good' does not possess a clear-cut legal definition and can be described as a non-physical item that can be employed, exchanged, and bought in digital communities, for instance, in online games. As an example, digital clothing, accessories, tools or weapons for avatars that can be personalized and improved in order to boost their market value can be mentioned. In principle, any physical article existing in the real world can be replicated in the virtual world as a virtual good.

NFTs are also yet to be outlined by the relevant regulations and are not included in the scope of the future EU Regulation on Markets in Crypto assets. Nonetheless, NFTs are known as digital records used to certify the ownership of a one-of-a-kind item. Unlike the items they represent, NFTs are also unique and cannot be substituted by an equivalent asset - they are non-fungible. Such items may comprise digital art, collectibles, and real estate, among others.

The difference between NFTs and virtual goods lies in the fact that NFTs are not viewed as digital items, but rather as a way to certify ownership (of either a physical or digital item), whereas virtual goods are the digital item in and of themselves.

Therefore, the question arises as to whether trademarks used in connection with NFTs or virtual goods should be filed (a) in a separate class for NFTs, virtual goods, or digital assets in general, or (b) in the class or classes corresponding to the specific good/service that the NFT or virtual good represents.

The BOIP answered this question quite clearly: virtual goods, much like NFTs, "are not classified in the same class as the corresponding physical goods. Rather, they are always classified in class 9, along with other digital and/or downloadable goods. 'Digital clothing' is therefore not classified in class 25, but in class 9". This Class 9 relates to goods, including "mainly apparatus and instruments for scientific or research purposes, audiovisual and information technology equipment, as well as safety and life-saving equipment" (WIPO).

THE GOODS OR SERVICES REPRESENTED BY NFTs/VIRTUAL ASSETS

The above answer of BOIP would have been insufficient to address all hesitations existing in this field. Simply indicating 'NFTs' or 'virtual goods' under Class 9, in the trademark application, does not say much about neither (a) the specific goods or services that are represented by the relevant NFTs and virtual goods, nor (b) how a trademark applicant should classify a specific service that is provided on those assets.

The BOIP highlighted that mere designation of "NFTs" or "virtual goods" under Class 9 in a trademark application was inadequate to eliminate all doubts related to this area. Moreover, it determined that the term "virtual goods" was overly vague and imprecise, thus requiring further information about its content. Specifically, the BOIP suggested that applicants should indicate the particular type of digital asset they are providing, such as "downloadable virtual goods, namely virtual clothing". Therefore, trademark applicants must not only declare the digital asset ("virtual goods") but must also specify the item it represents ("downloadable virtual goods, namely virtual clothing") in their trademark application.

This implies that the protection granted to a trademark used for goods that are supplied in the virtual world (Class 9) is not applicable to related products in the physical world, and vice versa. Companies wishing to use one trademark for both physical and virtual goods may therefore need to register it under Class 25 (real-world clothing) and Class 9.

VIRTUAL GOODS

In class 9 :

  • Software for the visualization of virtual goods, namely...
  • Digital downloadable goods, namely avatars for use in video games.

In class 35 :

  • Retail services in virtual goods, such as...

In class 41 :

  • Entertainment using virtual goods.?
  • Entertainment by proposing virtual games in which services may also be provided, such as...

In class 42 :

  • IT services for the creation of an online virtual environment.

NFTs

In class 9 :

  • Digital certificates of ownership (NFTs).
  • Non downloadable digital certificates of ownership in the form of NFTs.
  • Non-fungible tokens (NFTs), being digital certificates of ownership representing virtual goods.

In class 35 :

  • Retail services in virtual goods, for which an NFT has been issued.

In class 36 :

  • Exchange services for non-fungible tokens of value (NFTs).

In class 41 :

  • Entertainment using virtual goods for which an NFT has been issued.

EUIPO GUIDELINES

The BOIP's news article is in line with the practices of the European Union Intellectual Property Office (EUIPO), which had previously updated their Guidelines in June 2022. These Guidelines state that all material that is downloadable is proper to Class 9, which includes publications, music, ring tones, pictures, photographs, films or film extracts, and digitised information.

Furthermore, under the umbrella of "Downloadable goods and virtual goods", the Guidelines also refer to virtual goods as non-physical items that are purchased and used in online communities or online games.

Additionally, the 12th Edition of the Nice Classification now includes the term "downloadable digital files authenticated by non-fungible tokens [NFTs]" (090918) and is in force as from the 1st January 2013. In this context, the EUIPO clarifies that non-fungible tokens (NFTs) are unique digital certificates, registered in a blockchain, that are used to record ownership of an item, such as a digital artwork or a collectible. This was also mentioned in their News page, which states that virtual goods are proper to Class 9, but the term must be specified (e.g. "downloadable virtual goods, namely, virtual clothing").

FINAL REMARKS

EUIPO guidelines state that Class 9 only covers "downloadable goods and virtual goods". This prompts the question of how to classify offers of non-downloadable virtual goods. BOIP's position is clear: the supply of virtual goods must always be classified in Class 9, along with other digital and/or downloadable goods. However, additional guidance may be necessary to decide if a trademark applied for the offer of a physical good is the same or similar to its virtual counterpart, or if the use of a trademark in a virtual world is sufficient to constitute use in a specific territory for the purpose of trademark revocation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.