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NFTs, the metaverse and blockchain technology create new risks to brand protection in Singapore

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Expansion of traditional trademark protection

The Intellectual Property Office of Singapore (IPOS) issued its Circular No. 2/2023 titled ‘Classification practices on Non-fungible tokens (NFTs) and Metaverse-related goods/services’ on 10 February 2023,[2] clarifying the Registry of Trade Marks’s practices on the classification of goods and services for NFTs and metaverse-related applications of trademarks.

This is not unique to Singapore; new classifications have also been added to the 12th edition of the Nice Classification[3] to cater for NFT and crypto-related goods and services. Similarly, the UK Intellectual Property Office issued Statutory Guidance PAN 2/23 on the classification of NFTs and virtual goods and services provided in the metaverse on 3 April 2023.[4] In particular, this guidance highlights that NFTs will not be accepted as a classification term alone and that the description would need to pertain to the asset to which the NFT relates.

A common issue in traditional trademark protection that is exacerbated by the metaverse is the need to seek protection in multiple jurisdictions. In principle, trademark protection is jurisdictional in nature and a trademark registration grants the owner a statutory monopoly of the trademark only in the jurisdiction of registration. In traditional trademark protection, businesses are often advised to think ahead and seek early protection of their trademarks in jurisdictions of their business operations and jurisdictions of likely future business operations.

The metaverse, however, aims to be a seamless connected 3D virtual world accessible from anywhere in the physical world. Therefore, applying for trademarks for NFTs and metaverse-related goods and services in a single jurisdiction may not be adequate in affording satisfactory protection. Businesses may need to constantly consider and monitor whether they need to extend their trademark protection in other jurisdictions where their business may be gaining traction in the virtual world (compared to the physical world), and work out multi-jurisdictional protection and enforcement strategies. This includes seeking protection of their trademarks in locations where the businesses’ servers are located and the target markets where consumers are familiar with the businesses’ brands and products.

NFT and metaverse trademark disputes

Having the ability to conduct business operations in the virtual world through technology may seem like an exciting prospect for many businesses. It could mean increased access to a much wider customer base while being able to avoid incurring potentially significant costs associated with setting up a presence in the physical world. However, the increase in accessibility is not without its problems – just as it is easier to conduct business operations in the metaverse through technology, it is likewise easier for infringers to violate trademarks in the virtual world through technology.

The first added complication of this is that, in the virtual world, anonymity is rife. Infringers are able to make use of technology to mask their true identities and would, more often than not, use false information to prevent themselves from being tracked.

The Singaporean courts have found that legal proceedings can be commenced against persons whose identities are unknown at the time of commencement and orders can be granted against them.[5] Claimants, however, would need to describe the unknown defendants with sufficient certainty to identify those who are included and those who are not. In the case of NFTs, such defendants can be described by referring to the wallets that had received the cryptoassets, to pseudonyms used by defendants[6] or to the NFT itself (given that each NFT is unique).

Claimants can also consider the use of Norwich Pharmacal orders, which are court orders made against third parties requesting documents or information to assist in identifying the wrongdoer in question. Such information can be sought against providers of the accounts providing access to the metaverse service in question, the issuer of the NFT in question or the NFT marketplace displaying the NFT in question. In Singapore, such an order can be sought before claimants commence legal proceedings in court.[7]

Unlike the English courts,[8] the Singapore courts have not yet ruled on whether a Norwich Pharmacal order can be obtained against a third party located outside Singapore. It is however noteworthy that the grounds upon which the Singapore courts can permit service of court documents outside of Singapore are fairly broad.[9]

In addition, time is required for business owners to seek expanded protection through registrations of trademarks. Given the speed at which NFT and metaverse technology is developing, business owners would most likely have to rely on existing trademark registrations in pursuing after trademark infringers. The question then is whether the scope of existing trademark registration would be adequate for claimants to do so. Although there have not been any relevant decisions in Singapore to date, claimants have succeeded in doing so in other jurisdictions.

The Court of Rome recently ruled that an existing registration for ‘downloadable electronic publications’ covered the sale of NFTs. Juventus Football Club SpA v Blockeras Srl concerned the use of the words ‘JUVE’ and ‘JUVENTUS’ as well as a figurative mark (a black and white striped shirt with two stars on the chest) by Blockeras in the production, marketing and online promotion of NFTs. In addition to relying on existing trademark registrations, Juventus managed to show that it had been active in blockchain-related games that had used cryptocurrencieso or NFTs through agreements with other parties. In the circumstances, the Court of Rome found that Blockeras had infringed the trademarks.

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