Sponsored briefing: A guide to NFT and metaverse-related trade marks

Over the past year, each of us started to become more familiar with the terms such as non-fungible tokens (NFT), blockchain, digital assets or metaverse and it is obvious that we will be using these terms even more. Despite the growing popularity of the matter, there are either no or limited regulations available on the same while the virtual world will be a host of numerous legal issues.

Although it is interpreted as possible to obtain legal protections in other legal remedies, considering the advantages of trade mark registration, it is advisable to file a trade mark application which will also be able to provide protection in the metaverse based on Article 7 of the Turkish Industrial Property Code (IPC), which prescribes as follows: ‘Trade mark protection provided by this Code shall be acquired by registration.’

It is, therefore, crucial to have a trade mark registration in order to benefit from the said protection in Turkey against both predictable and unpredictable legal difficulties in the virtual world.

NFT and metaverse-focused trade mark applications worldwide

Every single day we read or hear that the owners of famous brands operating in various fields from automobiles to music, textiles to food, sports to entertainment are filing new applications in order to get trade mark protection in the metaverse. On the other hand, some major intellectual property offices have started to make necessary arrangements in parallel to the current developments and registration requests in this aspect. As an example of this, the European Union Intellectual Property Office (EUIPO) announced that it welcomes comments by 3 October 2022 on the draft version of the 12th Edition of the Nice Classification, which will enter into force on 1 January 2023 since it is increasingly receiving applications concerning virtual goods and NFTs.¹

The EUIPO has recently declared that the Office has received approximately 2,500 NFT applications and approximately 200 that contain terms related to the metaverse since the year 2021² and that 1,277 applications using NFTs were registered by the Office in 2021.³

Likewise, it is seen that there are already many registered trade marks filed through the World Intellectual Property Organization (WIPO).

As another notable example, it is stated that until now approximately 6,000 trade mark applications have been filed with the US Patent and Trademark Office (USPTO) for NFTs and related goods or services⁴ and 4,000 applications for metaverse, virtual, and Web3 goods or services within this year.⁵

As is seen, the fundamental but vital steps have already been taken by some trade mark holders in addition to the main intellectual property offices for also protecting the trade marks ‘virtually’.

Situation in Türkiye

As mentioned above, although the situation in the major trade mark and patent offices is that the brand owners are trying to keep up with current developments as much as possible, especially in terms of the owners of well-known trade marks, and taking steps for protecting their trade marks in the virtual arena as well, it is seen that there are very few applications whose coverages have been updated to be also protected in the virtual platforms while the number of applications mostly filed by Turkish citizens containing related terms is relatively high.

Given the fact that the internet has a nature that is not bound by borders and that there is no or adequate regulation on the matter as of now, it is beyond a doubt that the protection of a trade mark before certain countries’ trade mark offices or regional offices will not be sufficient for the trademark owners.”

Therefore, as one of the countries that spend the most time on the internet in the past years, applications to be filed in Türkiye and protection to be obtained by this means become more of an issue. Although it may be considered that other methods such as relying on the relevant provision of unfair competition or intellectual property in case of a possible violation in Türkiye, it is an undeniable fact that the protection provided by a trade mark registration is broader, more effective and more practical, just as is the case with the trade mark registrations unrelated to NFTs or metaverse.

Besides, due to the recency of the matter, there are no precedents or sufficient resources and it is unclear how strong the protection a valid registration can provide. For instance, will ‘clothing’ in class 25 be seen as similar to ‘downloadable virtual goods in the nature of footwear’ in class 9 or will it be deemed to provide equivalent protection as these goods by the TPTO or Turkish courts? The answers to all such questions are currently unpredictable and it will undoubtedly take time for them to become clear.

In this regard, it is predicted that the number of rejuvenated trademark applications in terms of their coverage before the Turkish Trademark and Patent Office (TPTO), which will provide protection in the virtual platforms, will increase in the near future.

While filing an NFT and metaverse-focused trade mark applications in Türkiye

As known, while filing a trade mark application in Türkiye, the goods and services for which protection is requested can be determined specifically, and it is also possible to file an application by choosing from a list published by the TPTO that includes fixed goods and services under each class, which is the most preferred way.

The TPTO, however, has neither updated the fixed list of goods and services it revised in 2017 nor published a guideline on this issue in accordance with the said current developments similar to the above-mentioned offices.

The general assumption is that the goods and services in this list should have an inclusive feature. However, when the said list is examined, it can be seen that it is hard to argue that these fixed terms can provide sufficient protection or even protection in some cases for the goods or services in the virtual world contrary to this assumption. It is, therefore, expected that this list will be renewed after five years and following the entry into force of the new edition of Nice Classification since it will be useful and necessary in this matter as well as in other respects.

Until the update of this list, the applicants will be able to specify the goods and services for which protection is requested for their NFT and metaverse-related trade mark applications before the TPTO. Despite the uncertainty regarding the acceptable terms while proceeding with this option or sole remedy for the time being, it is considered that the risk of encountering any obstacles will be minimised if applicants pay necessary attention to the usual points when filing a trade mark application with this method, namely the indication of the goods and services applied for such as their vagueness or their linguistic accuracy and the classification of the same. Apart from these, it is possible to file a Turkish trade mark application by following the guidance of the above-mentioned offices and specifying the goods and services subject to the application while adding some expressions such as ‘virtual goods’, ‘digital assets’ or ‘for use in virtual environments’.

The EUIPO’s declaration is in direction as well: ‘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 (eg, downloadable virtual goods, namely, virtual clothing). The 12th edition of the Nice Classification will incorporate the term downloadable digital files authenticated by non-fungible tokens in Class 9. NFTs are treated as unique digital certificates registered in a blockchain, which authenticate digital items but are distinct from those digital items. For the Office, the term non-fungible tokens on its own is not acceptable. The type of digital item authenticated by the NFT must be specified.’⁶

In the light of the above, it is surely possible to file the NFT and metaverse-focused trade mark applications in Türkiye until a new classification list to be announced by the TPTO and used in the application process for the trade mark owners who also wish to protect their trade marks ‘virtually’ while the footsteps of a new era are beginning to be heard but do not wish to be in a disadvantageous position, unlike today.