Non-fungible tokens (NFTs) have exploded in popularity over the last couple of years. The total market value of NFT transactions in 2022 exceeded $40 billion. This demonstrates the immense growth and popularity NFTs have gained over the past few years. These digital assets represent ownership of unique virtual items like artwork, music, videos, and more. As NFTs gain traction, an important question arises – can NFTs be trademarked and receive legal protection under intellectual property laws? This article will provide an overview of what NFTs are, their potential trademark eligibility, and the latest guidance from the European Union Intellectual Property Office (EUIPO) regarding NFT trademark protection as of 2023.
Table of Contents
What is NFT
A non-fungible token (NFT) is a unique digital certificate that represents ownership of a specific virtual asset. NFTs use blockchain technology to provide verification of ownership and authenticity.
Unlike cryptocurrencies like Bitcoin which are fungible (meaning each unit is interchangeable), each NFT is completely unique and not interchangeable with another NFT. This makes them ideal for representing ownership of rare digital goods like artwork, music, videos, tweets, memes and more.
The digital contents of the NFT can be almost anything – images, animations, music, text, or code. The contents are linked to the NFT through encryption, effectively assigning ownership to the NFT holder. NFTs are bought and sold online, frequently with cryptocurrency.
NFT Under Trademark Law
Trademarks are words, logos, slogans, or other identifiers used by a brand to distinguish its products or services in the marketplace. For a trademark to receive legal protection, it must be distinctive enough to identify the source of a particular product or service and prevent consumer confusion.
At first glance, NFTs do not seem to function as traditional trademarks. They typically represent ownership over an underlying digital asset like artwork, rather than identify the source of a specific product or service. However, there are certain scenarios in which an NFT could potentially receive trademark protection:
- If an NFT contains words, logos, images or other identifiers that are distinctive, non-functional, and consistently used by a brand, it may be eligible for trademark registration. For example, an NFT created by Coca-Cola that incorporated the Coca-Cola logo and trademark could potentially be registered.
- If an NFT project establishes itself as a well-known source of NFTs in the marketplace, its name and branding could eventually gain secondary meaning and merit protection. For example, the Bored Ape Yacht Club NFT project could potentially claim trademark rights over its name, logo, and branding elements.
- If the contents of an individual NFT contain protectable trademarks, the NFT holder may be able to claim ownership over those trademarks. For example, an NFT representing a piece of digital artwork featuring a company’s logo.
It is also worth noting that NFT metadata – information like title, description, tags, and attributes embedded in the NFT – could potentially contain trademark-eligible content.
Overall, while NFTs themselves may not directly constitute trademarks in most cases, the content they represent could be eligible for protection. The applicability of trademark law will likely depend on the specific contents and use of each NFT on a case-by-case basis.
The EUIPO Guidelines Regarding NFT Protection as of 2023
In 2022 and 2023, the European Union Intellectual Property Office (EUIPO) published helpful guidelines and case studies examining the interplay between NFTs and trademark law. These outline several key considerations for trademark eligibility of NFT content:
- Graphic representations – If an NFT contains a graphic logo, word mark, image or other visual element that functions as a trademark, it may be eligible for graphic representation and protection. This includes branded content within the NFT metadata.
- Functionality – Non-functional, distinctive identifiers are more likely to warrant protection than functional content. EUIPO notes that NFTs themselves likely do not qualify as non-functional trademarks.
- Use in commerce – Trademark rights emerge through consistent, ongoing use of a mark in commerce to indicate the source of products/services. Most NFT projects will not meet this initial threshold, but may gain protection over time by establishing secondary meaning.
- Similarity and consumer confusion – Registrability also depends on assessing likelihood of confusion with existing marks. If an NFT project’s name/logo is highly similar to a registered trademark, its ability to gain protection may be limited.
While many questions remain regarding NFT trademark eligibility, the EUIPO guidelines provide useful clarity on how basic trademark principles apply. They note that rights related to NFTs will emerge on a case-by-case basis as projects establish real world use and recognition.
If you’re looking for assistance with trademark search and registration, contact Chern & Co. Our trademark officers will lead you through trademark registration in Ireland, the United Kingdom, and the United States.
As NFT adoption continues to accelerate, there will be increasing scrutiny at the intersection of NFTs and trademark law. Under current guidelines, NFTs themselves are unlikely to warrant trademark protection in most cases. However, distinctive branding elements and trademarks represented within NFT metadata or contents may be eligible for registration and legal exclusivity.
Trademark rights related to NFTs will likely develop gradually over time, as projects establish secondary meaning and recognition among relevant consumers. The enforceability of any claimed trademark rights will require case-by-case assessment. But for high-profile NFT projects with strong branding, pursuing trademark registration can provide a valuable tool to distinguish themselves in the NFT ecosystem. Brand owners exploring the NFT space should be strategic about leveraging intellectual property protections as part of their broader branding and commercialization strategy.