Trademarks and the Metaverse in a Nutshell
The metaverse is an online virtual world where users can interact with each other, create and sell digital assets. As the metaverse grows in popularity, the protection of trademarks becomes increasingly important. In a historic first, the Italian Courts were asked to analyze whether a Non-Fungible Tokens (NFTs) could in essence infringe a registered trademark. Following such landmark sentence, a parallel sentence was served by a New York court.
Key Legal Issues
- Trademark protection for NFTs
- Legal categorization of NFTs
- Enforcing traditional rights in the metaverse
Background to the Case
In 2021 Blockeras S.r.L took to the metaverse and launched its “Coin of Champions” project, minting cards featuring former Juve striker Christian “Bobo” Vieri. More than 60 cards featuring the Italian club’s trademarks were sold, generating a revenue of approximately Euro 40,000 for Blockeras.
The famous Italian football club, Juventus initiated a preliminary injunction proceeding before the Court of Rome - IP Chamber claiming that Blockeras S.r.l. was producing and promoting NFT cards containing the word ‘Juventus’ together with the club’s iconic identifier without prior authorization. In its reply, Blockeras rejected Juventus’ claims on two arguments. Firstly, that the NFT company had obtained consent from the individual players and the use of these signs was granted by the player. Secondly, it claimed that the trademarks were not registered for use as NFTs.
Court’s Decision
From the case’s proceedings, it emerged that Juventus’ mark was not registered specifically in a class for “downloadable virtual goods” but was registered in Class 9 of the Nice Classification for terms such as “downloadable electronic publication”. For the Court, this was sufficient to confirm protection over NFTs. Furthermore, the Court confirmed that it is irrelevant which classes were held by Juventus, the marks owned by the club are considered as well-known and it is common for the club to have merchandising activities carried out in many different areas. Therefore, when dealing with the protection of well-known marks, the Court does not seem to restrict protection solely to the boundaries set out by the applicable goods and services.
Therefore, the Court ruled that this constitutes a likelihood of confusion, based on the identity of the signs used on NFTs. In addition, this is also considered as unfair competition, as Juventus does its own marketing through NFTs.
Categorisation of NFTs
NFTs are a type of digital asset that represents ownership of unique or rare items, such as artwork, music, or collectibles, in a digital form. Unlike cryptocurrencies, which are fungible and interchangeable, NFTs are unique and cannot be exchanged on a one-to-one basis.
Interestingly, this case sets the scene for the protection of trademarks used by NFTs. The Court distinguished between the NFT and its actual digital content and granted an injunction for each. Thus, through this approach, the Court seems to have considered the NFT as a “digital certificate” of the digital content (the cards). This approach which characterized the relationship between the certificate and the content is still internationally debated, and it is interesting to see how jurisprudence will continue to evolve.
What this means for you
NFTs have gained popularity in the football world, offering a new way to engage and interact with the sport. The referred case is a significant ruling in relation to trademark rights and NFTs in sport but also in other industries due to its broader ramifications. It is the first known judgment by a European court to determine that NFTs which reproduce a third party’s trademarks without authorization from the rights owner amount to trademark infringement and may warrant an injunction preventing further usage.
How we can help
In conclusion, the metaverse is rapidly transforming the IP landscape, raising complex legal and ethical questions around ownership, protection, and liability. As AI continues to evolve, it is essential that legal frameworks keep pace with these changes to ensure that IP is protected and that the benefits of AI are realized. Our technology lawyers strive to keep abreast with the latest developments together with helping clients understand how they can avail of intellectual property protection in the light of rapidly emerging technologies. Contact us for more information on how you can protect your most valued assets.
