Statutory guidance

PAN 2/23: The classification of non-fungible tokens (NFTs), virtual goods, and services provided in the metaverse

Published 3 April 2023

The classification of non-fungible tokens (NFTs), virtual goods, and services provided in the metaverse

1. What?

This PAN is to inform customers applying for UK trade marks about the IPO’s approach to the classification of the above types of goods and services.

2. Why?

Along with many other registering authorities, we have seen an increasing number of applications for trade mark specifications containing these terms. We have also received requests for guidance on the acceptable ways in which these terms can be framed and the correct class in which they fall. This PAN aims to provide that clarity, albeit recognising that the terms are representative of new forms of goods/services in a fast-moving technological field; we aim to update this guidance as and when new developments arise.

3. NFTs

NFTs were born out of the cryptocurrency networks. They serve as unique and unalterable digital authenticity certificates of ownership for virtual or physical assets such as art, collectibles and gaming. The Cambridge Dictionary defines an NFT as:

a unique unit of data (the only one existing of its type) that links to a particular piece of digital art, music, video etc. and that can be bought and sold.

As a token of data, the NFT consists of an entry on a blockchain. However, it is inextricably linked to the asset (normally a digital asset) to which it relates. The NFT is used, primarily, to represent the ownership of that asset, albeit not necessarily the ownership of any underlying IP such as copyright. For example, a unique piece of digital artwork or an audio file may be “minted” as an NFT, enabling the ownership of that digital asset to be proven and managed via the relevant entry on the blockchain.

Given the above, NFTs will not be accepted as a classification term alone. Without an indication of the asset to which the NFT relates, the term is inherently vague. However, IPO will accept the following type of terminology in class 9:

• digital art authenticated by non-fungible tokens [NFTs]

• downloadable graphics authenticated by non-fungible tokens [NFTs]

• downloadable software, namely, [list the type of goods], authenticated by non-fungible tokens [NFTs]

• digital audio files authenticated by non-fungible tokens

• downloadable digital files authenticated by non-fungible tokens [NFTs]

The above guidance is in line with the 12th Edition of the Nice Classification which includes in class 9 “Downloadable digital files authenticated by non-fungible tokens [NFTs]”.

Whilst NFTs relate primarily to digital assets, it is feasible that NFTs can be used to authenticate anything, including physical goods. In light of this, physical goods clearly defined as being authenticated by NFTs will also be accepted in the appropriate goods class, for example:

• artwork, authenticated by non-fungible tokens [NFTs] [Class 16]

• handbags, authenticated by non-fungible tokens [NFTs] [Class 18]

• Training shoes, authenticated by non-fungible tokens [NFTs] [Class 25]

NFTs can be retailed and/or provided via online marketplaces, in the same way as other goods and services. In line with that practice, IPO will accept the following terminology in class 35:

• Retail services connected with the sale of [e.g. virtual clothing, digital art, audio files] authenticated by non-fungible tokens

• Provision of online marketplaces for buyers and sellers of goods and services which are authenticated by non-fungible tokens

In relation to certain services for example, it may be possible to link membership of a club or entry to an event to an NFT. However the service would fall within Class 41 as an entertainment service.

Other uses of NFTs will be considered on a case-by-case basis.

4. Virtual goods

Unlike their physical counterparts, virtual goods are classified in class 9 of the Nice Classification system. This is because the goods to which they relate consist, essentially, of data, such as digital images. However, in the same way that the term “goods”, or “goods made from x” would not be acceptable for physical goods due to such terms not meeting the requirement for clarity and conciseness, virtual goods will be treated in the same way. Consequently, virtual goods will only be accepted if they are clearly defined. Examples of acceptable terms in class 9 would be:

• downloadable virtual clothing, footwear, or headgear

• downloadable virtual handbags

5. Virtual services, including those provided in the metaverse

During the pandemic, there was a proliferation of services which, whilst traditionally provided in person, have moved to being provided virtually, via the use of Internet based applications such as video-conferencing, instant messaging, and the like. If a service is capable of being delivered via virtual means, IPO will continue to accept such services, with examples of acceptable terminology being:

• education and training services delivered by virtual means [class 41]

• conducting interactive virtual auctions [class 35]

The metaverse is a form of digital reality, where people can access virtual worlds and interact with others. There is no reason, in principle, why a service capable of being delivered by virtual means, such as video-conferencing, cannot be delivered inside the metaverse. For example, a training service could be provided through, attended, and delivered inside the metaverse. As such, IPO will accept services provided through the metaverse in the same class as more traditional forms of delivery, with examples of acceptable terms being:

• education and training services provided via the metaverse [class 41]

• conducting interactive auctions via the metaverse [class 35]

It may not be possible to take the same approach for all “metaverse” services. This is because the manifestation of that service in the metaverse may not fall in the same class as the traditional form of delivery. For example, whilst it may be possible to order food and drink inside the metaverse for delivery or consumption in the physical world, a metaverse avatar “consuming” food and drink within the metaverse would not constitute a class 43 service. Where provision via the metaverse is specifically mentioned, but where it is not immediately apparent that the service sought can be provided inside the metaverse, clarification will be sought by the examiner.

Services that fall foul of the above paragraph may in fact be covered by a more general category of services, in that what is actually being provided is the access to a virtual world or the metaverse for the purpose of entertainment. As such, the following type of terminology may be appropriate:

• entertainment services, namely, provision of a virtual reality or metaverse based simulation gaming service

6. Raising objections and time periods for response

If the examiner considers that the specification applied for is vague, a statement of objection will be raised under rule 8(2)(b) of the Trade Mark Rules 2008 as part of the examination report. A period of two months will be given during which time written observations in response may be filed. The applicant also has the right to request a hearing.

7. Timing

Given that the content of this PAN is merely of a clarificatory nature, it applies immediately.