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Strategies for Protecting NFT Brand/product IP in the Metaverse

Herbert Smith Freehills | Andrew Moir and Pietro Pouche | Aug 16, 2022

NFTs and intellectual property - Strategies for Protecting NFT Brand/product IP in the MetaverseThe creation (“minting”) and sale and use of NFTs raises many IP issues which we have discussed in our previous posts in our IP in NFTs series. However, brand owners and product manufacturers must also be vigilant in monitoring the virtual marketplaces to ensure that third parties are not creating NFTs that infringe their own IP rights.  This is especially true where the company is considering releasing or has released NFTs, because the public will begin to associate the brand with NFTs (which could include infringing NFTs).  There are several strategies that companies could adopt to minimise this risk.

Strategies for product and brand protection

Companies should become familiar with the NFT marketplaces and conduct periodic searches to see if any of their IP is being traded without their knowledge. Image matching technology, such as Google’s reverse image search, can also be used to check whether specific image files are present on unauthorised domains.

See:  Intellectual Property and NFTs: What you need to know

It is also important for companies to be clear and open about their involvement in the NFT space, including making it easy for the public to see how many legitimate NFTs have been sold by the company and where these are available for sale.

The EUIPO has recently issued guidance notes in relation to trade marks and NFTs entitled “Virtual goods, non-fungible tokens and the metaverse” clarifying the approach that it is taking for applications containing terms relating to virtual goods and NFTs, which applications it says are increasing.

  • Virtual goods: From a classification point of view the EUIPO says that” virtual goods are proper to Class 9 because they are treated as digital content or images. However, the term virtual goods on its own lacks clarity and precision so must be further specified by stating the content to which the virtual goods relate (e.g. downloadable virtual goods, namely, virtual clothing)”.  The guidance confirms that the 12th Edition of the Nice Classification will incorporate “the term downloadable digital files authenticated by non-fungible tokens in Class 9″.
  • NFTs: The EUIPO also comments that NFTs are treated as unique digital certificates registered in a blockchain, which authenticate digital items but are distinct from those digital items. The guidance states that for the EUIPO, the term “non fungible tokens on its own is not acceptable”.  The type of digital item authenticated by the NFT must be specified.

See:  A new way of measuring the elusive value of intellectual property

  • Services: The EUIPO’s guidance says that services relating to virtual goods and NFTs will be classified in line with the established principles of classification for services.

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NCFA Jan 2018 resize - Strategies for Protecting NFT Brand/product IP in the MetaverseThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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