Nike and the metaverse – a new territory for registering trade marks

Nike have registered trade marks for the famous swoosh and brand name for various products in virtual and augmented reality. We have heard of the first cease and desist letter being sent as Hermes seeks to enforce its intellectual property rights over the Metabirkin bag. This begs the question – is virtual and augmented reality a new frontier for registering trade marks and will other brands follow suit?

Trade Mark registration in AR and VR

Nike has registered its famous trade mark for virtual goods for use in virtual and augmented reality. It has also recently acquired RTFKT which has meant the options for owning a virtual set of Jordan’s are limitless. Add in the possibility of ranges of virtual shoes being linked to NFTs and you have the possibility of a limited product launch with the level of exclusivity that luxury brands crave.

Why do registered trade marks matter in virtual reality? For the same reason they matter in the real world – they signify the origin of a product. In virtual worlds there appears to be the opportunity for brands to make virtual goods available and this means that there is another avenue of exploitation of valuable trade marks. If wearing virtual goods takes off, brands will want to be in the mix. There is also a defensive reason for registering a mark and that is to stop or at least discourage infringement by other parties using the same or similar mark.

Metabirkin v Hermes

There has already been a case involving the unauthorised use of a famous trade mark and an NFT auction for images of luxury virtual handbags. The Metabirkin auction appears to have surpassed $1.1 million, but Hermes have claimed intellectual property infringement.

Hermes claims that the NFTs which were auctioned by Metabirkin are misappropriating the famous trade marks of the brand and as a result riding on its coattails. It poses the question of whether the auction would have raised as much if the NFTs had been named Birkin alone.

OpenSea stopped selling the NFTs after receiving notice which perhaps highlights the importance of understanding how secondary infringement can arise and court filings were made last Friday against the designer of the NFT. The defence appears to be that they are works of art, but whether this defence is successful is another matter.

Passing off

If a brand does not register a mark for virtual goods, it may be able to rely on its real world registered trade and unregistered trade marks under the tort of passing off. If it can show goodwill and reputation in the mark, confusion on the part of the consumer and loss then it would likely succeed. But brands should be weary of relying on this. Evidence will be required and brands may struggle to show confusion if it is known or assumed that the brand does not have a virtual presence. The brand would also have to show loss, which again may be difficult to show if there is no loss of sales in the real world.

The easiest thing to do seems to be to register a couple of trade marks.

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