The pioneering role of the gaming industry
Virtual goods and digital assets are issued, purchased and traded digitally. They are often designed as counterparts of goods and services in the real world – virtually (pun intended) all products and services that exist in real life can also be imagined in the virtual world. And unlike its real-world counterpart, a digital item can be upgraded, modified, and outfitted with new features. In the gaming industry, virtual goods have traditionally been used primarily as in-game items in the form of avatar skins, clothing, accessories, gear, and weapons. With the introduction of blockchain, digital assets can be individualized and a clear record of allocation or ownership can be kept and tracked – excluding the risk of double selling, opening up game items for trading outside of an individual game’s ecosystem and facilitating monetization through easy royalty tracking for secondary sales. Game developers are already making significant investments in tokenized digital assets. In emerging games such as “Decentraland” and “The Sandbox”, digital land can already be bought, sold and developed with virtual buildings. Game developer Ubisoft is introducing NFTs to its games and opening up commerce between players through its “Ubisoft Quartz” platform. Digital assets offer new opportunities for creative collaborations between non-endemic brands, game companies, social media operators, artists and exchanges. The metaverse is here to stay.
EUIPO’s response to the Metaverse
In response, the EUIPO is addressing the appropriate classification of these trending trademark protection topics in its new draft 2023 guidelines. Stakeholders can still comment on the draft until October 3, 2022.
The commercial capitalization of digital assets is accompanied by efforts to protect the underlying intellectual property rights, including a growing number of trademark applications covering terms related to virtual goods and NFTs. EUIPO defines virtual goods in its guidelines as “non-physical items that are purchased and used in online communities or online games” and assigns them to Class 9 of the Nice Classification. They are treated as digital content or images. The term “virtual good” – like “software” – of course lacks clarity and precision, and applicants are encouraged to specify in more detail what content the virtual goods relate to – such as “downloadable virtual goods, know digital art”.
In the most recent 12th edition of the EUIPO Nice Classification, the office pays attention to terms relating to NFTs. Class 9 includes “downloadable digital files authenticated by non-fungible tokens [NFTs]EUIPO refers to NFTs as “unique digital certificates, stored on a blockchain, which are used as a means of recording ownership of something such as a digital work of art or collectible. “. object itself; it is only a means of certification. As such, it can serve as an additional characteristic to clarify the scope of trademark protection. Therefore, the type of good that is authenticated by an NFT must also be included in the mark specification. As an example of an authorized application, the EUIPO cites “downloadable digital art, authenticated by an NFT”.
It is also important to note that Class 9 only covers downloadable virtual goods. Offers of non-downloadable virtual goods should be classified as services corresponding to the specific offer in question, in accordance with the classification principles established for Classes 35 to 45. To give an example for a Class 35 service: “Provision of an online marketplace for downloadable digital art images authenticated by non-fungible tokens [NFT].”
In the latest version of the United States Patent and Trademark Office (USPTO) Identification Handbook, the USPTO provides guidance similar to that of the EUIPO guidelines on Classes 9, 35 and 41.
Secure trademark protection of virtual assets
To date, we cannot yet seek guidance from consistent case law on the scope of IP protection for virtual goods and their tokenization through NFTs. For example: Is there a similarity in terms of trademark law between a physical good and its virtual counterpart? What is clear and obvious however, is that existing trademark protection for real goods does not extend to the digital world. Brand owners venturing into the digital asset space are therefore advised to audit their brand portfolios and supplement them with new filings in line with guidance issued by the EUIPO, USPTO and others. trademark offices.
Properly classifying new trademark filings for virtual goods and tokenizing them via NFTs is only a first step. The rapidly changing virtual landscape, much like its real-world counterpart, will be a battleground for brand recognition and reputation, invite imitators and freeride, and over time be the source of a dedicated corps regulations and case law. Our international team of experts on gaming, digital assets and online regulation are here to help you navigate the metaverse – from NFT collaboration agreements and trademark, design and copyright protection strategies , online application and multi-jurisdictional regulatory guidance on metaverse ecosystems. You can contact us through our gaming and esports page.