Trademark filings in connection with NFTs
Legal battles around NFTs
"Non-fungible tokens" (NFTs) are certificates of authenticity of digital goods registered chronologically in the blockchain. An NFT is therefore a token issued on a blockchain that incorporates a reference to a digital file, indelibly associating it with that file.
NFTs are part of a phenomenon of interconnection between the real world and the virtual world, wherein the real world makes incursions into the virtual world and vice versa. The use of NFTs thus enables retailers to combine their activities in the real world with an experience in the virtual world. This phenomenon can be seen in the fashion and cosmetics industry, where NFTs are used to enrich the customer experience.
Major brands use NFTs to offer their customers a special, exclusive offer – a "service pack" where the acquisition of an NFT is combined with a real and/or virtual experience and with exclusive advantages reserved for the holders of these tokens. Furthermore, as the ultimate exclusivity tool, NFTs are used to unveil certain new products before they are available in the physical world.
NFTs are thus a promising communication and marketing tool that can attract new, young and connected audiences, but also build loyalty among existing customers. Indeed, NFT experiences are sometimes voluntarily reserved for customers who are members of a loyalty programme or those who agree to participate in a particular initiative launched by the brand. Many beauty houses also use NFTs as a philanthropic tool to support a noble cause and/or to promote the work of artists with whom they collaborate in the design of these NFTs.
Trademark filings in connection with NFTs
To guarantee the protection of their trademarks in the metaverse, many brands have extended their legal protection by filing trademarks in classes related to the virtual universe. Some examples are set out below.
In January and February 2022, L'Oréal continued its excursion into the world of virtual goods by filing trademarks for many of its properties, marking its intention to venture into virtual cosmetics. These numerous filings concern various L'Oréal labels (eg, Maybelline, Urban Decay, Shu Uemura, Essie and Kerastas) and have been filed with the French National Institute of Intellectual Property, the EU Intellectual Property Office, the US Patent and Trademark Office and the World Intellectual Property Organization. The filings systematically target classes 3, 9, 35 and 41.
For example, a French trademark application for REDKEN (No. 4836626) was filed on 24 January 2022 with the following wording:
Class 3: Perfumery products, toiletries, cosmetics, make-up, cosmetic products for skin care, body care products and facial care products, hair care products and hair colouring products incorporating near field communication technology;
Class 9: Downloadable virtual goods, namely, computer programs related to perfumery, toiletries, cosmetics, make-up, skin care products, body and facial care products, hair care products and hair colouring products, and intended for use online and in online virtual environments; downloadable software for interactive games and entertainment intended for use from a global computer network, wireless networks and any electronic device; downloadable software for accessing social networks and interacting with online communities; downloadable software for accessing and distributing multimedia entertainment content; downloadable software for providing access to an online virtual environment; downloadable software for creating, producing and modifying animated and non-animated digital characters and designs, avatars, overlays and digital skins for access and use in online environments, online virtual environments and extended reality virtual environments; near field communication tokens; downloadable mobile applications for ordering perfumery, toiletries, cosmetics, make-up, skin care products, body care and facial care products, hair care products and hair colouring products; Near Field Communication (NFC) tags for interacting with mobile applications to obtain information about perfumery products, toiletries, cosmetics, make-up, skin care products, body and facial care products, hair care products and hair colouring products; Near Field Communication (NFC) labels to promote and authenticate perfumery products, toiletries, cosmetics, make-up, skin care products, body care and facial care products, hair care products and hair colouring products;
Class 35: Retail shop services for virtual goods, namely perfumery products, toiletries, cosmetics, make-up, skin care products, body and facial care products, hair care products and hair colouring products, for online use; online retail services for virtual goods, namely perfumery products, toiletries, cosmetics, make-up, skin care products, body and facial care products, hair care products and hair colouring products;
Class 41: Provision of an interactive website for virtual reality gaming services; Entertainment services, namely online provision of non-downloadable virtual products, namely perfumery, toiletries, cosmetics, make-up, skin care, body care and facial care products, hair care and hair colouring products, animated and non-animated digital characters and designs, avatars, digital overlays and dressing for use in virtual environments; virtual reality services and interactive games accessible online from a global computer network, wireless networks and any electronic device; entertainment services, i.e. services providing virtual environments in which users can interact for recreation, leisure or entertainment purposes; entertainment services, i.e. services providing an online environment for the streaming of entertainment content and the live broadcasting of entertainment events; entertainment services relating to the organisation, staging and hosting of virtual shows and social entertainment events.
In fact, L'Oréal had already filed numerous trademarks in 2021, most of which have already been registered, for downloadable virtual products, virtual product retail shop services or virtual reality services. For example, the French trademark SHU UEMURA ART OF HAIR (No. 4824753) was registered on 9 December 2021 with the same wording as that referred to for the REDKEN trademark application in classes 3, 9, 35 and 41.
In addition to its trademarks, L'Oréal is adapting its entire portfolio of IP rights and has also filed several patents relating to NFTs and the metaverse. These are aimed a priori at an interactive website for virtual reality games, online games and other activities.
On 21 March 2022, Hermès filed an application for the French wordmark HERMES in classes 9, 35, 36, 41 and 42, covering NFTs, cryptocurrency, online retail services of virtual goods, virtual events and the use of blockchain.
On 11 March 2022, Givenchy filed an application for the French wordmark GIVENCHY in classes 9, 35, 41 and 42, covering, among other things, virtual reality software, virtual goods, NFTs and services for the sale of virtual goods.
On 26 January 2022, Balenciaga filed an application for the French wordmark BALENCIAGA in classes 9, 35, 36, 41 and 42 to cover the use of NFTs, virtual goods, virtual services, the design and development of NFTs and the use of cryptocurrency.
Two lawsuits around the use of NFTs and trademark protection are underway in the United States. These cases illustrate the risks of NFTs, which can be a "virtual playground for counterfeiters" where trademark protection is not obvious.
The outcome of these legal battles will be a welcome insight into the uncertain world of the limits to the use of NFTs that trademarks can constitute.
There is clear evidence that many brands in the fashion and beauty sector are using NFTs and engaging in virtual experiences. This is particularly true of luxury brands, which are using these new tools to enrich and renew the customer experience, but also to reinforce a sense of community and rarity, which are essential aspects of attachment to a brand. According to the investment bank Morgan Stanley, NFTs could constitute 10% of the luxury goods market by 2030, with a revenue opportunity of €50 billion.
However, beyond their commercial purpose, brands are also using these new technologies in a philanthropic way. Indeed, many NFTs are designed and created in collaboration with artists and in order to support a noble cause to which the funds from the sale of NFTs are donated. These various initiatives are accompanied by a necessary legal process, which results in the registration of trademarks for products and services specifically linked to NFTs and the metaverse.
The involvement of luxury brands in the digital universe and the vast proposals it offers them makes it possible to draw an obvious conclusion: it is an unstable and changing universe. As such, it is essential to keep abreast of the constant developments, on the one hand to assess the economic and commercial opportunities they represent, but also to ensure legal surveillance and adequate protection of IP rights in the face of this digital revolution.
For further information on this topic please contact Eric Schahl or Salomé Delhome at INLEX IP Expertise by telephone (+33 1 56 59 70 90) or email ([email protected] or [email protected]). The INLEX IP Expertise website can be accessed at inlex.com.