On 3 April 2023, the UK Intellectual Property Office (UKIPO) released updated guidance on how best to classify non-fungible tokens (NFTs), virtual goods, and services provided in the metaverse. The clarifications aim to help those wishing to register a trade mark for goods or services that exist within the metaverse. Many rights owners and trade mark applicants have recently faced the challenge of identifying the correct classes of goods and services, and drafting the correct specification, for the trade marks which they intend to exploit in the metaverse.
As a result, the UKIPO, like other registration authorities around the world, has encountered a rise in trade mark applications that include these terms and corresponding inquiries on their appropriate classification. The guidance seeks to offer clarity on these matters and follows similar, albeit more brief, guidance issued by the EU Intellectual Property Office (EUIPO) in June 2022. Below we set out what the UKIPO has to say about these virtual products, and how that tallies with its EU counterpart.
The Nice Classification system
The Nice Classification system is an international system used for the classification of goods and services in trade mark registration. It divides goods and services into 45 classes, with classes 1-34 for goods and classes 35-45 for services.
The system helps to simplify the process of trade mark registration by providing a harmonised way of categorising goods and services across different countries and languages. The classification system used for trade mark registration provides broad categories for goods and services. However, these categories may not be comprehensive enough, especially in a fast-changing digital industry, where there may be uncertainty about which category a particular good or service should be classified under, or how to phrase a trade mark specification within a given class of goods or services. As a result, trade mark applicants may lack clarity, and guidance from intellectual property offices can be helpful in providing direction.
The UKIPO defines an NFT as “a unique unit of data (the only one existing of its type) that links to a particular piece of digital art, music, video etc. and that can be bought and sold”.
It is important to remember that an NFT is a data token that is closely associated with the asset it represents, typically a digital asset. Its main purpose is to signify ownership of the asset, rather than the asset itself. As such, the UKIPO and EUIPO agree that simply referring to a “non-fungible token” within a specification is insufficient as a classification term – the type of digital asset it is associated with must also be specified.
The Nice Classification system already assigns “Downloadable digital files authenticated by NFTs” into class 9. As such, assets like digital art, downloadable graphics or software, and digital audio files that are authenticated by an NFT will fall into class 9.