UK IPO issues guidance on NFTs virtual goods and services in the metaverse
The UK Intellectual Property Office (UK IPO) has recently issued practical guidance on trade mark classification for non-fungible tokens (NFTs), virtual goods and services provided in the metaverse. This follows confusion as to what trade mark classification such goods and services fall into and how best to describe them.
NFTs
NFTs are units of non-interchangeable data, unique in nature containing a piece of identifying information making them distinguishable from all other tokens. The UK IPO describes NFTs as “unique and unalterable digital authenticity certificates of ownership for virtual or physical assets” including art, collectibles and gaming. NFTs link to an asset (normally a digital asset). An NFT consists of an entry on a blockchain and the blockchain retains the metadata codes of the NFT which has been “minted” (such as a unique audio file), which in turn, ensures its ownership and authenticity. Whilst the NFT represents the ownership of that asset, it does not necessarily represent the ownership of the founding IP, such as copyright.
As such, the UK IPO will not accept NFTs as a classification term alone. Rather, the UK IPO requires that NFTs must be submitted with an indication of the asset to which it relates. The UK IPO will accept the following type of terminology in class 9:
- digital art authenticated by non-fungible tokens
- downloadable graphics authenticated by non-fungible tokens
- downloadable software, namely, [list the type of goods], authenticated by non-fungible tokens
- digital audio files authenticated by non-fungible tokens
- downloadable digital files authenticated by non-fungible tokens
The UK IPO guidance is in line with the 12th Edition of the Nice Classification, effective 1 January 2023, in respect of which class 9 lists downable digital files authenticated by non-fungible-token.
The UK IPO guidance goes on to clarify that while the majority of NFTs relate to digital goods, they can be used to authenticate physical goods. Thus, tangible goods authenticated by NFTs will likewise be accepted in its appropriate class such as:
- artwork, authenticated by non-fungible tokens [NFTs] [Class 16]
- handbags, authenticated by non-fungible tokens [NFTs] [Class 18]
- training shoes, authenticated by non-fungible tokens [NFTs] [Class 25]
The UK IPO goes on to advise that where NFTs are retailed or provided through online marketplaces, the services will fall within class 35. The UK IPO provides two examples which will be acceptable:
- 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.
Lastly, the UK IPO explains, in relation to certain services, by way of example, where membership of a society or entry to an event can be linked to an NFT, the service will fall under class 41 as an entertainment service.
Other uses of NFTs will be considered on a case-by-case basis.
Virtual goods
Virtual goods are classified in class 9 as the goods to which they relate consisting “essentially, of data, such as digital images”. Just as the terms ‘goods” or ‘goods made by x’ would not be permitted for physical goods due to their lack of clarity and conciseness, virtual goods are treated the same. Therefore, virtual goods must also be clearly defined such as:
- downloadable virtual footwear
- downloadable virtual handbags
Virtual services and those provided in the metaverse
Where a service can be delivered virtually, the UK IPO will continue to accept such services with acceptable terminology such as “educational services delivered virtually” in class 41.
The IPO also recognises that services may be provided in the metaverse, for example:
- education and training services provided via the metaverse [class 41]
- conducting interactive auctions via the metaverse [class 35]
The UK IPO recognises that it may not be possible to take the same approach for all metaverse services. This is because the delivery of that service in the metaverse may not fall within the same class as the traditional form of service. By way of example, whilst food or drink could be ordered in the metaverse for consumption in the physical world, a metaverse avatar ‘consuming’ food or drink in the metaverse would not amount to a class 43 service. Clarification will be required by the UK IPO where it is not apparent that the service can be provided within the metaverse. Such services may, however, be covered by a more general category of services, which reflects that access to a virtual world or the metaverse is being provided for entertainment purposes. In such circumstances the following wording may be appropriate:
- entertainment services, namely, provision of a virtual reality or metaverse based simulation gaming service.
If you are seeking trade mark protection for NFTs, virtual goods and services provided in the metaverse, our Intellectual Property team will be happy to assist.
This article was co-written by Arina Yazdi, Trainee Solicitor.
