One of the hottest trade mark infringement issues around at the moment is the question of how effectively can trade mark rights protect brand owners’ interests in non-fungible tokens (otherwise known as “NFTs”).
Given the relatively nascent technology of NFTs, there have been few trade mark infringement cases in Europe (or indeed elsewhere in the world) to test the limits of trade mark protection for NFT content. One recent trade mark infringement case, from Italy, involves the famous Italian football team, Juventus.
Juventus became aware of a third party company called Blockeras (a blockchain specialist) who had minted and were commercialising various NFTs, which included various of Juventus’ trade marks, as well as the image of a former Juventus player, Christian Vieri. Trade mark infringement proceedings were issued thereafter.
A quirk of this trade mark infringement case was that Vieri had apparently given some form of consent to use his image. Consent can, depending on the circumstances, amount to an effective defence against a claim for trade mark infringement.
Nonetheless, the Italian court held that, in the circumstances of the use of Juventus’ various trade marks within the NFTs, Blockeras’ activities were potentially likely to cause confusion and thus constituted trade mark infringement. On this basis, the court in Rome granted a preliminary injunction against Blockeras’ acts of trade mark infringement. The fact that Vieri has licenced his image did not amount to a defence to the allegations of trade mark infringement.
The trap for the unwary in relation to NFTs is that NFTs often contain a whole bundle of IP rights; trade mark rights just being one element. For example, the following IP rights could subsist in an NFT:
Given that the above IP rights are divided yet further into national rights around the world, it becomes evident that assessing the IP licensing position in relation to NFTs can be complex. NFT providers, such as Blockeras, may think that one set of permissions may be enough, but the trap for the unwary is that additional IP rights may lurk within any given NFT.
Additional trade mark infringement issues relating to NFTs
Use in the course of trade? – one pre-requisite for trade mark infringement in the UK is that the use of infringing sign must be “in the course of trade”. Clearly, where NFTs are sold on marketplaces, such use will be meet this requirement. However, where NFTs are minted by private individuals, for example as a part of a hobby, it is arguable that such hobbyists would be not be carrying out an act of infringement in the course of a trade.
Jurisdictional issues – given that NFTs are exploding in popularity across the world, brand owners will have decisions to make as to which jurisdiction to take enforcement action against infringing NFTs. There is established case law which sets out the criteria which the English courts will consider when determining whether use of a particular NFT will be within the UK or not. Essentially, the approach of the English courts is to consider whether the infringing use is “directed towards” the UK. In the context of NFTs, this hurdle is likely to met when the minter is based within the UK or when infringing NFTs are being offered for sale within the UK. In respect of the latter angle, the location of the NFT marketplace in question will be a relevant consideration. As with all infringements in the digital world, this jurisdictional dimension is something that brand owners will have to consider before brining enforcement action in a particular jurisdiction against specific NFTs.
Identifying the infringer – in the Juventus case mentioned above, the identify of the infringer was readily apparent. In other cases, the entities behind minting and selling infringing NFTs may be much more difficult to discern. This is particularly so given the nature of blockchain technology which NFTs utilise. Indeed, one of the attractions to many of blockchain technology is that it offers a high degree of anonymity. Minters and vendors of NFTs do not need to include identifying information within the NFT coding. As a consequence, brand owners can often find it a very difficult endeavour to identify those behind allegedly infringing NFTs.
Classification of NFTs – as a new category of technological work, trade mark practitioners around the world are having to catch-up and adopt new wording to make sure that their client’s trade mark registrations are effectively protected in terms of NFTs they may produce. Since 1 January 2023, the Nice Classification (which deals with how goods and services for trade marks are listed) has included a separate classification for NFTs. However, this will only apply to new trade mark applications. Of course many older trade mark registrations will not have specific NFT wording within them. This leaves trade mark owners potentially having to rely on non-identical classes of goods against infringers. As a consequence, certain infringement actions may be more complicated because such trade mark owners will then have to prove a likelihood of confusion, which is a requirement within the UK when a trade mark owner is asserting infringement in respect of only similar goods or services.
#trademarks #NFT #trademarkinfringment #TMinfringement
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