NFTs, the Complicated Relationship with Real-World Products, and Trade Marks Office Practices


Are NFTs which depict real world goods the modern-day equivalent of Andy Warhol’s Campbell soup pop-art, or are they the work of swindlers trying to make a buck off the reputation of well-known brands?

There has been heavy speculation over the last two years on how intellectual property will operate in the emerging virtual arena that is the Metaverse and similar digital spaces.

The ongoing dispute between the luxury goods company Hermès and Mason Rothschild has been one of the first to consider the extent to which trade marks for “real world” products extend to virtual worlds. 

Rothschild, created and sold 100 “MetaBirkins” – digital artworks tied to non-fungible tokens that copy the design of the coveted Birkin bag.  Whilst Hermès owns trade mark registrations in the United States for BIRKIN covering physical bags, the registrations do not cover virtual goods or the design of the bag.

In February 2023, a US jury sided with Hermès, finding that Rothschild was liable on counts of trade mark infringement, dilution, and cybersquatting, and awarding Hermès US$133,000 in damages. The jury found that Rothschild, a self-described “marketing strategist”, purposely sought to confuse consumers into believing that his “MetaBirkins” NFTs were affiliated with Hermès’ iconic Birkin trade marks.

Hermès subsequently asked the court to grant a permanent injunction to block Mr Rothschild from promoting and selling the “MetaBirkins” NFTs on the basis that he would continue to engage in infringement unless the court stopped him.  Mr Rothschild opposed the bid for permanent injunction and lodged a renewed motion for judgement as a matter of law or a new trial.

On 23 June 2023, the US District Court of the Southern District of New York issued a new opinion and order which denied Mr Rothschild’s request and granting Hermès’ petition for permanent injunction. 

  • The Court held that Mr Rothschild and associated parties are prohibited from using the Birkin marks or otherwise misleading the public about the source of the “MetaBirkins” NFTs;
  • Mr Rothschild was ordered to transfer the domain name and related materials to Hermès;
  • The Court declined to order that Mr Rothschild transfer any “MetaBirkins” NFTs in his possession to Hermès (to be destroyed); and
  • Mr Rothschild was ordered to transfer any profits derived from the “MetaBirkins” NFTs since the beginning of trial, including royalties, transfer income, and any other financial benefit received from the resale of the NFTs.

On 21 July 2023, Mr Rothschild filed a Notice of Appeal with the Southern District Court of New York.

The MetaBirkins verdict is generally considered good news for brand owners as it indicates that intellectual property rights in ‘real world’ goods may be enforceable against virtual world replicas.  

While this matter has played out before the US Courts and it is yet to be seen how Australia and New Zealand will treat similar disputes, we can look to recent guidance issued by the European Union Intellectual Property Office and United Kingdom Intellectual Property Office.

Practice updates from the European Union and United Kingdom

In Europe, similar issues to the MetaBirkins case were considered by the Court of Rome in Juventus Football Club s.p.a., v Blockeras s.r.l.  Juventus successfully argued that the digital cards sold by Blockeras as NFTs that depicted Christian Vieri, a well-known Italian player, wearing a Juventus jersey infringed its word marks for ‘JUVE’ and ‘JUVENTUS’ and a figurative mark consisting of the black and white striped jersey with two stars on the chest, registered in Class 9 of the Nice Classification for downloadable electronic publications.

In contrast to the MetaBirkins case, Juventus owned trade mark rights for non-physical goods in Class 9 and presented evidence of operating in the same business field as Blockeras.

The Juventus decision highlights the value of trade mark owners with rights for physical goods to extend their trade mark protection to the corresponding virtual goods.

In terms of seeking trade mark registration for virtual goods and NFTs, the European Union Intellectual Property Office (EUIPO) has provided the following guidelines:

  • trade marks relating to virtual goods and NFTs are properly classified in Class 9.
  • trade marks relating to virtual services fall under the relevant service class, taking into account the services impact in the real world (i.e. transport services in the real world would fall into Class 39, but transport of goods in a virtual reality game may have a real world purpose of entertainment, for example, virtual transport services for gaming purposes in Class 41.
  • the terms virtual goods and NFTs on their own lack clarity and precision and are therefore unacceptable.  Virtual goods must specify the virtual goods, such as downloadable virtual goods, namely, virtual clothing.
  • the type of digital item being authenticated by the NFT must be specified.  Such as, downloadable artworks authenticated by non-fungible tokens.

The UKIPO has taken a similar approach:

  • trade marks relating to virtual goods fall under Class 9 and must be clearly defined, such as downloadable virtual handbags.
  • trade marks relating to virtual services fall under the relevant service class.  Claims for virtual services must be capable of being delivered via virtual means.  Education services delivered by virtual means would be acceptable, but virtual restaurant services may be better classified as virtual restaurant services for entertainment purposes in Class 41.
  • NFTs which are linked to digital assets will fall under Class 9, such as digital art and downloadable graphics authenticated by NFTs.  
  • Where the NFT is linked to a physical good, the claim should sit in the relevant physical good class.  For example, shoes authenticated by NFTs would fall in Class 25; artworks authenticated by NFTs would fall in Class 16.

For practical reasons, we anticipate that the trade mark offices of IP Australia and IPONZ will seek to align their treatment of claims for virtual goods and NFTs with the practice guidelines of the EUIPO and UKIPO.  Through examination, we are already seeing that claims for virtual goods are considered too broad and a more specific description is being requested by examiners.


Digital works and the NFTs attached to them, may be seen as a form of artistic expression and creativity, similar to Warhol’s iconic pop art pieces.  They provide creators with a new medium to showcase their talent and engage with a digital audience.  Just as Warhol experimented with mass-produced consumer goods, NFTs can reflect and comment on the consumer culture of our time.

On the other hand, there have been a growing number of instances where NFTs have directly copied or imitated well-known brands.  These cases may be viewed as an attempt to capitalise on the reputation and prestige of established brands, misleading consumers and undermining the integrity of the real goods.

It is crucial that creators and brand owners navigate this emerging landscape with awareness and respect for intellectual property rights.

Key Takeaways

Brand owners can take some comfort that existing trade mark rights for physical goods may extend some protections against unauthorised use on virtual equivalents, such as in the MetaBirkins case.

Nevertheless, brand owners with rights for physical goods are advised to extend their trade mark protection to the corresponding virtual goods to ensure sufficient coverage, as seen in the Juventus decision.

Enforcement strategies should be reviewed to ensure that use of trade marks in relation to virtual goods and services is being actively considered.

Update: on 10 August 2023, IP Australia released new guidance on trade mark classification of emerging technologies, including NFTs and virtual goods. Read our latest article topic here.

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