How Does The Process Of Trademarking A NFT Differ From Traditional Trademarks?

Non-fungible tokens (NFTs) have exploded in popularity over the past few years. As digital assets stored on a blockchain, NFTs can represent ownership of unique digital content like artwork, music, videos, tweets, virtual land, and more. However, regarding intellectual property rights around NFTs, there is still much uncertainty given how new this technology is.

Background on Trademarks

For creators of valuable branded NFTs, securing federal trademark protection should be an important consideration in defending against infringement. However, trademarking an NFT comes with some key differences compared to the process for traditional trademarks. In this blog post, we'll explore how NFT trademarks break from the norm and require special consideration under current USPTO practice.

First, let's quickly recap what a trademark is. A trademark refers to any word, phrase, symbol or design that identifies the commercial source of a product or service. Trademark rights arise through actively using a mark in commerce to distinguish goods or services. The benefits of federal trademark registration include

• National presumption of ownership across the United States

• Legal presumption of validity of the mark

• Ability to sue for infringement in federal court

• Registration as official notice to others of trademark rights

Examples of famous national trademarks include Coca-Cola®, McDonald's® golden arches, Apple's® apple-shaped logo, and Nike's® Swoosh symbol. Each of these marks denotes a single commercial source that consumers recognize.

Trademarks related to NFT projects identify and distinguish the underlying artwork, music, videos, or other content associated with branded non-fungible tokens. However, as we'll explore next, the nature of NFTs also comes with unique challenges for would-be trademark owners.

Challenges with Trademarking NFTs

As a Philadelphia blockchain lawyer can attest, the cutting-edge world of NFTs strains traditional notions of trademark validity:

1. Anonymous creators- For brands focused on anonymity without a named commercial entity, validity could be challenged.

2. Single edition content- Unlike an ongoing product line, most branded NFT projects center around limited collections or single works.

3. NFTs are both goods and services.An NFT can represent both an underlying digital artwork (a good) as well as a smart contract service executing sales and transfers on the blockchain.

4. Use in commerce ambiguity- Whereas most trademark use involves sales of goods/services, NFTs may not always represent traditional commercial activity.

So when filing a trademark application for branded content in connection with NFT offerings, special care must be taken. Happily, the United States Patent and Trademark Office (USPTO) has provided some initial guidance on these open questions.

USPTO Guidance for NFT Trademarks

In January 2022, the USPTO issued a public document titled Non-Fungible Tokens ("NFTs") and Intellectual Property Considerations. This rare direct guidance shows how the USPTO is thinking about various IP issues posed by NFTs.

In terms of trademark validity, the USPTO provided two key pieces of guidance:

". . .an applicant using or intending to use a mark with an NFT would satisfy the use in commerce requirement when the mark is used or displayed in connection with the online NFT marketplace where the underlying content is offered for sale. . ."

and

". . .the use of a trademark with an underlying NFT asset offered for sale, whether tangible or intangible, constitutes use of the mark in connection with goods or services (as appropriate) under the Lanham Act..."

According to this official statement, selling or displaying a branded NFT through an online NFT marketplace should meet the commercial use standards for federal trademark registration. With this helpful clarification, NFT creators can proceed more confidently in claiming IP protection.

Elements of the NFT Trademark Process

With this background context around validating use in commerce for NFT marks, let's now walk through the key steps to seeking federal registration. Just like traditional trademarks, most NFT marks should qualify for registration under one of these classes:

• Class 9 - Downloadable series of non-fungible collectible digital assets

• Class 35 - Online retail store services featuring digital collectibles

• Class 42 - Non-fungible token design, minting, and storage services

As a Philadelphia blockchain attorney will tell you, the process for NFT trademark applicants then follows these general steps:

1. Searching- Assess any likelihood of confusion with existing marks. Evaluating possible marks early helps avoid receiving an initial refusal from the USPTO examining attorney.

2. Preparing application- Identify the commercial source, classify the goods/services, depict the branded logo or image, and describe the use of the mark in commerce.

3. Review process- An examining attorney evaluates the application on distinctiveness, likelihood of confusion, commercial use validity, and other legal criteria. They may issue clarifying questions or refusal letters requiring a response.

4. Registration granted- Once all legal criteria are satisfied, the USPTO certifies a federal registration detailing exclusive nationwide rights.

5. Monitor and renew- Registered marks must be monitored for potential infringement and continually renewed.

As this overview indicates, navigating the trademark registration process involves skills and legal knowledge. Trademark attorneys who are well-versed in this evolving area of law related to NFTs are invaluable to securing ironclad IP protection.

Now that we've covered the essential process for NFT marks, let's analyze some key strategic considerations for new applications:

1. Claim colors and design- Because NFTs emphasize visual elements like logo images over standard text, calling out distinctive colors and stylized visual design as core features of the mark is important.

2. Specify goods and services- Carefully classify the commercial nature (goods vs services) of the underlying NFT asset and tie that to trademark usage in the application.

3. Update specimen evidence- Providing URL links and images showing the use of the branded NFT project across the online NFT marketplace as specimens help satisfy commercial use requirements.

4. Argue validity as early adoption- Given how novel this area is, emphasizing adoption at the cutting edge for brands tied to underlying digital assets can justify validity despite unusual IP scenarios posed by NFT offerings.

With strategic decisions like these during the application process, securing federal certification provides the strongest defense against brand hijacking and infringement threats in Web3 spaces.

Comparing Application Costs

Finally, when considering the process for NFT trademark registration, the financial investment must be weighed. How do costs compare to traditional trademark applications?

USPTO fees for registering marks begin at several hundred dollars for a single class, increasing with additional classes and components. Complex applications get exponentially more expensive.

NFT trademarks should anticipate similar fee levels to traditional marks. However, because this digital realm requires legal knowledge and strategic decisions around depicting new kinds of blockchain-dependent branding, hiring an experienced trademark attorney is highly advisable despite the added cost.

DIY filing without a lawyer may undermine validity or leave openings for future counterfeiting which could devalue underlying NFT assets tied to branding. An investment in professional support strengthens intellectual property protection.

Key Takeaways

For creators exploring branded NFT projects, how does trademarking these digital assets differ from traditional marks? Here are some essential takeaways:

• NFT marks strain assumptions around use in commerce but can still meet validity requirements.

• The USPTO confirms displaying branded NFTs for sale online satisfies commercial use standards given the virtual nature of this ecosystem.

• NFT trademark eligibility qualifies under conventional classes like downloadable digital assets, online retail store services, or blockchain-related tech services.

• Applications should emphasize visual branding elements that make the branded NFT project uniquely identifiable in the minds of relevant consumers.

• Professional trademark lawyer experience tailored to the distinctive legal and strategic decisions involved offers value worth the investment for core NFT intellectual property rights.

Does securing federal registration for an NFT trademark seem like unfamiliar terrain? The learning curve is steep as early adopters navigate this blockchain-dependent branding landscape. But the potential rewards make proactive IP protection a smart play.

Frequently Asked Questions

1. Can I Get A Trademark For An NFT collection?

YES, TRADEMARK REGISTRATION IS POSSIBLE FOR BRANDED NFT COLLECTIONS, THOUGH SPECIAL CONSIDERATIONS APPLY REGARDING USE IN COMMERCE REQUIREMENTS. DISPLAYING A DISTINCTIVE LOGO OR OFFERING THE NFTS FOR SALE ON AN ONLINE NFT MARKETPLACE SHOULD SATISFY STANDARDS FOR FEDERAL TRADEMARK ELIGIBILITY.

2. Is A NFT Considered Intellectual Property?

THE CONTENT REPRESENTED BY THE ENCRYPTED DATA WITHIN THE NFT DIGITAL FILE, LIKE AN IMAGE, MUSIC, OR VIDEO, COULD QUALIFY FOR COPYRIGHT IP PROTECTION. THE UNIQUE ENCODING OF THE FILE THROUGH BLOCKCHAIN TECHNOLOGY ALLOWS PROOF OF OWNERSHIP AND COMMERCIALIZATION OF THAT CREATIVE WORK AS AN NFT NON-FUNGIBLE TOKEN.

3. What Type Of Trademark Is Best For A NFT?

FOR BRANDED NFT PROJECTS, TRADEMARK LAWYERS USUALLY RECOMMEND FILING FOR A STANDARD CHARACTER MARK WITHOUT CLAIMING ANY PARTICULAR FONT, STYLIZATION, OR DESIGN. THIS ALLOWS THE BROADEST PROTECTION POSSIBLE AS TRADEMARK RIGHTS COVER ALL MANIFESTATIONS OF THE WORD OR PHRASE REGARDLESS OF VISUAL APPEARANCE. THEN A SEPARATE TRADEMARK APPLICATION CAN ALSO INCLUDE THE VISUAL LOGO BRAND DISPLAYED WITH BRANDED NFTS AS AN ADDITIONAL PROTECTIVE MEASURE.

4. Can I Trademark A NFT Collection Name?

YES, TRADEMARK REGISTRATION IS POSSIBLE SPECIFICALLY FOR NFT COLLECTION NAMES. APART FROM COLLECTION NAMES, OTHER IDENTIFIERS ASSOCIATED WITH BRANDED NFT RELEASES COULD ALSO OBTAIN TRADEMARK STATUS INCLUDING UNIQUE HASHTAGS, PROMINENT TAGLINES USED CONSISTENTLY ACROSS THE PROJECT, ASSOCIATED LOGO SYMBOLS, AND EVEN BRANDED NAMESPACES INCORPORATED INTO BLOCKCHAIN ADDRESSES.

5. Why Should I Trademark My NFT As A Commercial Brand?

AS NFTS GAIN MONETARY VALUE, BRANDED COLLECTIONS BECOME PRIME TARGETS FOR COUNTERFEITERS HOPING TO EXPLOIT BRAND RECOGNITION. ADDITIONALLY, CONFUSION FROM SIMILAR COMPETING PROJECTS DILUTES ONGOING COMMERCIAL PROSPECTS. PROFESSIONAL IP ENFORCEMENT OF TRADEMARKS THROUGH CEASE AND DESIST ORDERS OR FEDERAL LAWSUITS PROVIDES THE STRONGEST DEFENSE AGAINST BRAND HIJACKING. HAVING CONFIDENCE IN EXCLUSIVE RIGHTS LEGALLY CONFERRED BY FEDERAL REGISTRATION HELPS MAXIMIZE INCOME POTENTIAL FROM BOTH INITIAL AND RESIDUAL SALES.

Choosing a NFT Trademarking Lawyer

With any technological breakthrough, new legal questions arise requiring updated guidance. Trademark eligibility for branded NFT projects certainly falls in that category. This blog post aimed to inform readers about validating use in commerce, eligibility fundamentals, strategic application decisions, and cost considerations for registering an NFT trademark.

With an estimated market size for NFTs projected to grow a hundred times over this decade, the opportunities feel boundless. And the IP risks feel just as daunting. Hopefully this breakdown better positions current and aspiring NFT creators to start on a more informed footing for the opportunities and challenges ahead at the intersection of branding and blockchain.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.