EUIPO guidelines on the registration of virtual goods and NFTs

The EUIPO has for the first time responded to the rapid development of digital markets in the metaverse by issuing guidelines on the classification of virtual goods and NFTs.

The metaverse is an umbrella term for digital platforms where everyday life like shopping, working and leisure activities, such as going to a concert, can be shifted into a virtual reality/world. In the digital reality, the range of goods and services that can be purchased is similar to that of traditional markets. Non-fungible tokens (NFTs) based on blockchain technology are used, among other things, to securely allocate the respective virtual products to their respective holders.

Trademark protection for digital products is necessary

The development of the metaverse, which has gained momentum in particular through the coronavirus pandemic, is still in full swing. It is expected that by 2024 the metaverse will have generated sales of approximately USD 800 billion. By 2030, the value of the metaverse is expected to increase to around USD 5 trillion, with e-commerce accounting for the lion's share. Against this background, it is not surprising that a large number of companies, especially from the clothing industry, have already invested considerable sums in building new business models in the field of virtual goods.

These types of investments and the alleged gigantic market potential require adequate brand protection in and for the metaverse. In this context, previous trade mark applications by various parties involved have shown that sometimes issues can arise in correctly recording and classifying virtual goods and the key technology of NFTs into one of the 45 classes of goods and services.

EUIPO has issued guidelines on the classification of virtual goods

In response to the increase in trade mark applications for digital goods and services, especially in the past year, the EUIPO has now for the first time issued guidelines on the classification of virtual goods and NFTs.

The Office's approach, which is set out below, is taken from the draft 2023 Guidelines; stakeholders can and, where appropriate, should comment by 3 October 2022:

Proposed classification for virtual goods required as expected

The classification of virtual goods and NFTs in class 9 and the required specification were as expected as necessary to meet the requirements for the trade mark registration of virtual goods. The inclusion of the term "downloadable digital files authenticated by non-fungible tokens" in class 9 will facilitate the registration of the growing number of trade marks in this field.

It is commendable that the EUIPO has reacted comparatively quickly to recent developments and has provided guidance to applicants.

EUIPO guidelines still leave room to manoeuvre: trademark applications for virtual goods and NFTs as an interface to real products

However, not all the questions have been answered. Virtual goods will not always fit into class 9. For example, virtual goods that are only used in browser applications do not fall within class 9 if they cannot be downloaded. These types of offers are to be registered using the appropriate services (e.g. in class 42). The same applies if the offer – as is probably often the case – is intended to go beyond the mere provision of digital goods in the metaverse.

The same applies if NFTs move beyond the virtual boundaries of the metaverse and are used as an interface to the real world, e.g. for the authentication of (real) branded goods acquired in the metaverse. The EUIPO has made no specification for the application of these NFTs, which is likely to be significant in the future.

The metaverse, therefore, remains exciting from a trademark law perspective.