Bram Woltering January 2 2023 How to classify virtual goods and NFTs in Benelux trademark applications AKD | Intellectual Property - International Bram Woltering Intellectual Property BackgroundWhat are NFTs?BOIP guidanceExamplesCommentThe Benelux Office of Intellectual Property (BOIP) recently issued a communication on the subject of trademark applications with terms relating to virtual goods and non-fungible tokens (NFTs).BackgroundTrademark applicants must choose within the Nice Classification – an international classification of 45 goods and services – for which (class) of goods and services the sign is applied.The communication by the BOIP was released because the BOIP is increasingly receiving trademark applications that involve goods and services relating to virtual goods and NFTs. The BOIP has also indicated that it regularly receives inquiries from applicants on how to classify virtual goods and NFTs.What are NFTs?An NFT is a unique digital identifier that cannot be copied, substituted or subdivided. It is recorded in a blockchain and is used to certify authenticity and ownership. The ownership of an NFT is recorded in the blockchain and can be transferred by the owner, allowing NFTs to be sold and traded. NFTs typically contain references to (and authenticate) digital files such as photos, videos and audio. However, while they authenticate digital items, they are separate from them.BOIP guidanceThe BOIP has clarified that it will approach the classification of NFTs and virtual goods as follows:Virtual goods are not classified in the same class as the corresponding physical goods. Rather, they are always classified in class 9, along with other digital and/or downloadable goods. "Digital clothing" is therefore not classified in class 25, but in class 9.The term "virtual goods" in itself will not be regarded by the BOIP as being sufficiently clear and precise. More specification is needed regarding the content to which those goods relate – for instance, "downloadable virtual goods, namely virtual clothing".The same goes for NFTs – the term "NFT" in itself is not acceptable according to the BOIP and must be accompanied by an explanation.Services relating to virtual goods and NFTs are classified according to the established principles for the classification of goods and services. The practice of the BOIP is aligned with that of the European Union Intellectual Property Office in this regard.ExamplesThe BOIP has provided the following examples of acceptable terms relating to virtual goods and NFTs.Virtual goodsIn class 9:Software for the visualization of virtual goods, namely . . . Digital downloadable goods, namely avatars for use in video games.In class 35:Retail services in virtual goods, such as . . .In class 41:Entertainment using virtual goods. Entertainment by proposing virtual games in which services may also be provided, such as . . .In class 42:IT services for the creation of an online virtual environment.NFTsIn class 9:Digital certificates of ownership (NFTs). Non downloadable digital certificates of ownership in the form of NFTs.Non-fungible tokens (NFTs), being digital certificates of ownership representing virtual goods.In class 35:Retail services in virtual goods, for which an NFT has been issued.In class 36:Exchange services for non-fungible tokens of value (NFTs).In class 41:Entertainment using virtual goods for which an NFT has been issued.Comment The communication by the BOIP is a welcome clarification. It was particularly uncertain whether an application that claimed only "virtual goods" as such would suffice or whether it would also have to further specify them. The latter has now been confirmed as best practice.Now that the first trademark applications relating to virtual goods and NFTs have been granted, it will be interesting to see how the trademark offices and judiciaries will treat such trademarks in light of revocation actions due to non-use. What quantity of use and/or sales of virtual goods is sufficient, and how can it be determined whether sales that took place in, for instance, the metaverse also took place in the Benelux territory?Undoubtedly, interesting legal questions will continue to arise with regard to trademarks that relate to virtual goods and NFTs.For further information on this topic please contact Bram Woltering at AKD by telephone (+31 88 253 50 00) or email ([email protected]). The AKD website can be accessed at www.akd.nl.