The Metaverse refers to virtual worlds (e.g., World of Warcraft or Fortnite) that keep evolving when a user is not engaged with them, and they can be engaged with through standard smartphones or computers or via augmented reality (AR) and virtual reality (VR).[1] NFTs can be bought and sold on blockchain technology and used in the metaverse, but the ability to do this is limited.[2] For example, a branded piece of virtual clothing such as a Nike shoe can be bought as an NFT.[3] However, using NFTs in the metaverse is possible only for certain NFTs on certain platforms (e.g., Decentraland plots of land sold and bought as NFTs).[4]
Notwithstanding this, NFTs have the potential to create issues for trade mark owners and trade mark applicants in the real world. When deciding what goods and classes to register a trade mark under, much thought is given to the physical goods that will be used and for which protection is needed. Less thought is given to the virtual goods that could be sold bearing the trade mark for which an owner or applicant needs protection.[5] There have been a proliferation of bad faith trade mark filings for virtual goods to obtain trade mark rights of well-known brands to pre-empt the filing by the rightful owner.[6] In the US, Hermès discovered this the hard way in relation to their trade mark Birkin.
The US case, Hermès Intl v. Rothschild, is a cautionary tale about pitfalls that may arise for trade mark registrations in the context of NFTs. The much-desired Birkin handbag is sold by Hermes, and Hermes owns “Birkin” and “Hermes” as trade marks.[7] Hermes filed for trade cybersquatting, trade mark dilution and trade mark infringement after Rothschild minted his “Meta Birkins” and “Baby Birkin” digital images.[8] Indeed, confusion had arisen in both the media and on the Instagram page of “Meta Birkins”.[9]
A key issue considered during this case was whether the “Meta Birkins” were designed for the purpose of drawing a connection with respect to artistic relevance of the “Meta Birkins” and Hermes’ trade mark or if the connection drawn was between the reputation of Hermes’ trademark and the “Meta Birkins”.[10] Notably, Rothschild used the argument that were the “Meta Birkins” physically created, trade mark infringement would have applied, but they are exempt from trade mark infringement because they are digital goods, which is not something relevant law covers.[11] The Court nevertheless found that it was clear that Rothschild tried to draw a connection between the reputation of the Hermes’s Birkin trade mark and his meta goods.[12]
This Hermès Int’l v. Rothschild case demonstrates the new and unexpected issues that are arising for trade mark infringement in the digital space. Protecting one’s brand and trade mark from cybersquatting has and is becoming a more complex process. The largely untested nature of legal matters in this space makes it important to do due diligence in identifying relevant goods and classes prior to filing your trade mark.[13]
The information provided in this article should not be relied upon as legal advice for Australian intellectual property matters or any other jurisdiction.
If you require assistance in filing a trade mark or any other patent, design or plant breeder’s rights matter, please do not hesitate to contact us.
[1] E. Ravenscraft, ‘What Is the Metaverse, Exactly?’, WIRED, (25 April 2022), https://www.wired.com/story/what-is-the-metaverse/
[2] A. Ma, ‘What is the metaverse, and what can we do there?’, The Conversation, (23 May 2022), https://theconversation.com/what-is-the-metaverse-and-what-can-we-do-there-179200
[3] Ibid.
[4] O. Fonarov, ‘What Is The Role Of NFTs In The Metaverse?’, Forbes, (11 March 2022), https://www.forbes.com/sites/forbestechcouncil/2022/03/11/what-is-the-role-of-nfts-in-the-metaverse/?sh=3ff6b6ce6bb8
[5] K. Park, ‘Trademarks in the metaverse’, WIPO Magazine, (March 2022), https://www.wipo.int/wipo_magazine/en/2022/01/article_0006.html
[6] Ibid.
[7] HERMES INTERNATIONAL and HERMES OF PARIS, INC., Plaintiffs, v. MASON ROTHSCHILD, Defendant. 22-CV-384 (JSR)
[8] Ibid.
[9] Ibid.
[10] Ibid.
[11] Ibid.
[12] Ibid.
[13] Park, Trademarks in the metaverse.
