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Nonfungible tokens — also referred to as “NFTs” — have recently taken the intellectual property world by storm. While an NFT’s value and strength comes from its authenticity, they have dramatically changed the market for digital assets. Previously, there was no viable way to separate the owner of a digital piece of art from someone who merely downloaded a copy to their computer. By acting as a type of digital deed on the blockchain ledger, NFTs solve the problem of verifying ownership and establishing property rights. However, when these digital assets are part of a series, they can also be trademarked to help protect the uniqueness of the digital property.
An NFT is a digital asset that is stored on the blockchain. The blockchain is a secure public record that is most commonly known for tracking cryptocurrency transactions. But unlike with bitcoin and other cryptocurrencies, each NFT is unique and cannot be exchanged for another. When an NFT is “minted,” a smart contract code is written and becomes part of the blockchain. Once the NFT becomes part of the blockchain, it cannot be edited.
NFTs can be minted for assets that are both tangible and intangible. While they exist only in digital format, NFTs are not interchangeable and can only have one owner at a time. Due to their scarceness, collectability, and authenticity, NFTs are comparable to fine art — this is why they are so valuable and in such high demand.
There are several intellectual property implications that should be considered before trademarking an NFT. Since NFTs have unique aspects that are not inherent in traditional goods or services, special issues must be addressed regarding the licensing, assigning, and transferring of intellectual property rights. In addition to securing trademark protection for the NFT series itself, the creator must also be aware of any potential infringement issues that can arise as a result of using a third-party’s intellectual property.
Additionally, it is crucial to draw a distinction between ownership of the NFT and the ownership of the intellectual property. In other words, just because someone owns an NFT does not mean they have acquired the trademark (and/or copyright) rights associated with it. The rights that are granted by the creator of the NFT can vary with each one. Typically, the intellectual property rights will only be transferred with the NFT if there is an express agreement.
Regardless of being a new type of technology, the same trademark laws apply for NFTs as for traditional goods and services. This means first conducting a comprehensive trademark clearance search to make sure the mark representing your NFT is not currently in use. Once you’ve confirmed that the mark is free for your exclusive use, it’s critical to begin the registration process as soon as possible. Although the USPTO generally requires that a mark be used in commerce before it can be registered, you can file an “Intent to Use” application which serves as a placeholder until the mark is actually in use.
Significantly, when filing your trademark application, you must ensure that you select the proper class for your mark. Choosing the correct class is not always as easy as it may sound. For instance, International Class 009 covers fungible and non-fungible token-based goods online, International Class 035 would cover business services in connection with the NFTs. There are also several other classes to which the NFTs may belong, depending on the nature of the NFTs and the industry.
After your trademark application has been filed, it is not uncommon to receive an office action. This does not always mean that your mark has been denied, but rather, the examining attorney identified an issue with your application that must be resolved in order for your registration to move forward. Upon the successful registration of your mark, you will receive a registration certificate and can begin utilizing the “trademark” symbol on the NFTs.
From cosmetics brands, clothing businesses, toy companies, and the entertainment industry, companies have been leveraging NFTs to interact with consumers — and they have quickly become an essential component of many brands. With competition as fierce as it is in the marketplace, companies in various industries have begun protecting their NFT series by registering their NTF Trademarks. In fact, the United States Patent and Trademark Office has seen a substantial increase in the number of trademark applications submitted for NFTs over the past year.
By registering the name, logo, design, or slogan associated with your NFTs, you can ensure:
Registering the trademark that is connected with your NFTs doesn’t only provide legal protection — it helps to increase brand awareness and consumer engagement. Registering Trademark is also an important tool to combat counterfeiting, theft, and misuse of NFTs by competitors who seek to profit off your company’s name and goodwill.
If you’re creating a series of NFTs, it is essential to protect their intellectual property rights with a registered trademark. It’s best to have the guidance of an experienced trademark attorney who has a deep understanding of the USPTO’s requirements to guide you through the trademark registration and application process. Located in Ann Arbor, Michigan, the Trademark Lawyer Law Firm, PLLC works with entrepreneurs and business owners nationwide to help ensure their NFTs are safeguarded from wrongdoers. Contact us today to schedule a free 15-minute consultation to learn how we can help.
Suspensions are when your application is on hold. There are various reasons a trademark application can be suspended. However “likelihood of confusion” with prior application(s) filed and submission of foreign application are the most common reasons the USPTO may suspend an application. During a trademark suspension period, your lawyer will provide guidance on the next steps and whether it might be best to file an argument or pursue a coexistence agreement.
A disclaimer usually refers to a statement which indicates that you are not claiming exclusive rights to use the word(s) or a design element in your trademark application. A disclaimer allows for registration without creating a false impression of the registrant’s rights.
A good example of this is disclaiming “café” if your services are for a café.
If a trademark is not eligible for the Principal Registry, there is sometimes an option to register on the Supplemental Registry.
In cases where the USPTO finds the trademark application is merely ornamental, merely descriptive, or primarily geographically descriptive, the USPTO may allow the application to be registered on the Supplemental Registry. However, over time, the mark may acquire distinctiveness and possibly become eligible for the Principal Registry.
Two dates must be specified in a trademark application:
Date of First Use Anywhere: The “anywhere” refers to use in the U.S. or elsewhere. This is the date the goods were first sold or transported, or the services were first rendered under the mark. The use must also have been bona fide and in the ordinary course of trade.
Date of First Use in Commerce: This is the date when the goods were first sold or transported, or the services were first rendered under the mark in interstate or international commerce. The use of the mark must have been bona fide and in the ordinary course of trade.
The renewal timeframe for a trademark is between the 9th and 10th year anniversary of the trademark registration, and then in ten-year intervals. It is important to be aware that the USPTO also requires a registrant to provide an affidavit at the 5th and 6th years of ownership stating that the trademark is still being used in commerce. Failure to comply with the renewal timeframes or the affidavit requirements will result in the cancellation of the trademark registration.
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