UKIPO guidance on NFTs and virtual goods

The UKIPO has published Practice Amendment Notice 2/23 regarding the classification of non-fungible tokens (NFTs), virtual goods, and services provided in the metaverse.

Unsurprisingly there has been an increasing number of trade mark applications covering such terms. NFTs are not accepted as a classification term on their own without an indication of the asset to which they relate. The UKIPO provides examples as to what will be accepted in class 9, including:

• digital art authenticated by non-fungible tokens [NFTs]
• downloadable graphics authenticated by non-fungible tokens [NFTs]
• digital audio files authenticated by non-fungible tokens

The above cover NFTs related to digital assets, however, they could also be used to authenticate physical goods. In this case, the physical goods authenticated by NFTs will be accepted in the class those goods fall under and the UKIPO provides the following examples:

• 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

In terms of virtual goods, these fall under Class 9, being data and must be clearly defined, for example, “downloadable virtual clothing, footwear, or headgear”.

The guidance also considers virtual services and the metaverse. A trade mark specification may specify that the services are provided virtually, such as “education and training services delivered by virtual means” or via the metaverse “education and training services provided via the metaverse” both found in Class 41. However, where the service only impacts the metaverse rather than the real world, this may be classified as a form of entertainment in the form of provision of a virtual reality.

The drafting of specifications will require careful consideration. Where and how the goods or services are provided and their impact on the real world will need to be taken into account. This may also lead to challenges when deciding whether there is a conflict between brands in terms of use and/or registration, and until there is certainty could provide hurdles to clearing new brands and deciding what steps to take in a third party dispute.

The UKIPO cautions that the “terms are representative of new forms of goods/services in a fast-moving technological field” and they will therefore update the guidance as and when necessary. It is likely that practice and case law will develop over the coming years, with new ways of delivering goods or services requiring consideration and amendment to practice by the UKIPO. No doubt there will be terms that need to be considered by the UKIPO on case-by-case basis prior to acceptance.