This article is co-written by April Parker and Casey Durning.
The start of 2023 has seen several high-profile companies filing applications for trade marks in relation to NFTs, cryptocurrency and other virtual goods – a clear continuation of last year’s trend which saw NFT trade mark applications increase worldwide. The EUIPO alone witnessed an increase of over 300 new EU trade mark applications covering NFTs and virtual goods between February and October last year.
Different sectors seem to have embraced the concept of marketing in the metaverse at different times. Large sportswear brands such as Nike, Adidas, and Reebok took early strides into the ever-growing digital space, applying for NFT-related trade marks throughout last year, along with luxury retail outlets, Rolex, and BMW.
The increasing entrance of well-known brands into the metaverse sphere poses the question, what benefits does the metaverse offer for brands?
Firstly, digital goods can pose a new revenue stream for metaverse-savvy brands. Virtual sales in the metaverse will become easier for brands, since they can bypass the platform-centric marketing of the current internet, thus reclaiming ownership of their digital consumer relationships. Whilst the blockchain technology that the virtual economy operates on is a long way from being consumer friendly, it allows for near perfect visibility, since transactions are not authorised by the bank but essentially by the virtual community. This is where the value of NFTs lies.
Secondly, NFTs also allow brands to reach new target audiences. The metaverse provides unlimited possibilities for points of expression from brand to customer. As well as increasing virtual sales, increasing brand awareness virtually could encourage more real-world sales too. Some brands have taken a step further in uniting both worlds. For example, Nike’s ‘CryptoKicks’ initiative allows customers who have purchased a pair of Nike shoes to receive a digital version too, which appears in their own virtual locker.
However, jumping on the metaverse bandwagon also bears consequences. Some jurisdictions such as the US require applicants to prove use in order to register their NFT-related trade mark. Failing to do so means that the application could be lost. On the brighter side, however, this is not the case in the EU and UK, meaning brands who remain doubtful of the metaverse fully taking off can still file trade marks in these jurisdictions to be one step ahead, just in case.
NFTs are not for everyone. The move towards increasing corporate social responsibility means that brands with a particular focus on sustainability would need to tread carefully within the metaverse sphere, given the huge (and often underestimates) environmental impact of NFTs. For example, a single NFT of a GIF, for example, has a carbon footprint equivalent to an EU resident’s electricity usage for two months, due to the enormous cost of keeping the technology powering the metaverse running at all times. Ultimately, any sustainability-driven brands considering filing trade marks for NFTs this year will have to think long and hard before making a decision.
So, are NFT-related trade marks a risk worth taking?
Due to the ongoing technological advances and huge investment in the metaverse, it is likely that NFTs are here to stay. We are on the cusp of a shift which will see the internet used in a whole new way and many brands will want to act swiftly. As such, it’s safe to say that the number of NFT-related trade mark applications is likely to continue rising in 2023.