In the ever-evolving realm of NFTs and blockchain technology, the intersection of digital assets and intellectual property rights has sparked a wave of unexpected legal complexities. The intrinsic value of NFTs poses intriguing challenges for the application of trademark law, particularly what it means for the rights of digital creators, innovators, and entrepreneurs in the digital age.

By integrating NFTs with their trademarked assets, businesses can create additional value and opportunities for growth in the evolving digital landscape. At Sullivan & Carter, LLP, we help companies and NFT users efficiently navigate and leverage trademark law to enhance their brand value. To learn more, consider connecting with our team of experienced trademark attorneys at (929) 724-7529 today.

What Do NFTs Do?

An NFT, short for Non-Fungible Token, is a digital asset signifying ownership or proof of authenticity of a unique item or piece of content using blockchain technology. Unlike fungible cryptocurrencies such as Bitcoin or Ethereum, which can be exchanged on a one-to-one basis, NFTs are considered non-fungible. This means that each token is distinct and cannot be replicated. In essence, while NFTs and cryptocurrencies are built on the same technology, they differ in terms of interchangeability.

Generally, NFTs can be used for any type of property that is original and requires provable ownership. Some examples of common NFTs include:

• Digital artwork
• Virtual real estate
• Collectibles
• Sports memorabilia
• Music and media
• Virtual avatars and characters

How Are Companies Using NFTs?

More and more, companies are incorporating NFTs into their business strategies and fully leveraging the power of blockchain technology to enhance brand value, authenticity, and exclusivity. In turn, these businesses are driving customer engagement and sales and expanding their creative possibilities.

• Enhancing Brand Value: Companies like Mattel Inc. and Saks LLC are securing their digital assets with NFTs, such as skins, avatars, and digital products, using their trademarks. This strategy underscores how brands are adding value and uniqueness to their offerings through NFT authentication.
• Ensuring Authenticity and Exclusivity: NFTs serve as a tool for companies to authenticate and verify the ownership of digital assets. By minting NFTs linked to their trademarks, businesses can establish a unique identity for their products, making them stand out in the market.
• Driving Customer Engagement and Sales: Authenticating digital assets with NFTs can boost customer confidence and loyalty. The exclusivity and traceability provided by NFTs can incentivize customers to invest in NFT-secured products, driving sales and brand loyalty.
• Expanding Creative Possibilities: Companies across industries are exploring the creative potential of NFTs in offering unique digital experiences and products. From digital artwork to virtual real estate and collectibles, NFTs are revolutionizing how businesses interact with customers in the digital realm.

What Is a Trademark?

A trademark is a badge of origin that helps a business differentiate its products or services from its competitors' offerings. While the most common trademarks are names and logos, a trademark can also be a slogan, a color (Tiffany & Co’s “Tiffany Blue"), product shapes (Coca-Cola bottle), and even sounds and scents. The ™ symbol is used to denote unregistered trademarks, while the ® indicates that a trademark has been registered with and validated by the United States Patent and Trademark Office.

Can an NFT Be Trademarked?

Yes, a NFT can be trademarked. While NFTs themselves do not inherently protect the intellectual property rights of the original creator or owner, they do offer a novel way for copyright owners to sign their original creations digitally. This digital signature can help establish ownership and authenticity in the digital realm, providing a level of protection for the creators of NFTs. By obtaining a trademark for an NFT, individuals and companies can protect their digital assets, enhance brand value, and establish a unique presence in the growing NFT ecosystem.

How Do I Register a Trademark for a NFT?

The trademark application process typically begins with a trademark search. Before you file a trademark application for a NFT, you must ensure that the mark is available for registration. The Trademark Electronic Search System (“TESS”) database is used for this purpose, but be aware that DIY searches tend to only alert you to exact matches of your trademark. For a more comprehensive search, consider seeking assistance from an experienced attorney at Sullivan & Carter, LLP.

Once you have confirmed that you have a unique mark to register, you can file an application online using the Trademark Electronic Application System. Before applying, your attorney will work with you to properly identify and classify your NFT and ensure that you understand your filing basis. It is important to note that Once trademarks are registered, proactive monitoring and enforcement efforts are essential to safeguard against unauthorized usage or infringement.

Why Is It Important to Register a Trademark for Your NFT Name?

Trademarks play a vital role in protecting NFTs and ensuring the longevity and credibility of brands within the digital space. By securing trademarks for their NFT creations, creators can establish and safeguard their brand identity in the competitive NFT market. Companies and individuals typically seek us out to secure a NFT trademark for the following reasons:

• Building a unique, identifiable brand identity and growing their customer base in the new virtual economy, potentially at a lower cost than traditional methods.
• Creating new goods or services tailored specifically to virtual worlds.
• Licensing and controlling their brand in the metaverse.
• Earning royalties for the secondary sales of NFTs.
• Increasing efficiency by eliminating the involvement of other parties, such as banks or brokers, as well as commissions, fees, and other costly expenses.
• Introducing new marketing opportunities by offering exclusive gaming experiences or offering interactive user communities built around their brand.

How Can Sullivan & Carter, LLP Help Secure a NFT Trademark?

A robust grasp of trademark law principles is instrumental to fortifying brands within the NFT realm, empowering creators to harness the full potential of their intellectual property assets and thrive in the burgeoning space of digital collectibles. At Sullivan & Carter, LLP we routinely work with the most forward-thinking entrepreneurs and innovators to protect NFTs and leverage their digital assets to increase their bottom lines. To discuss your IP strategy with our team, consider scheduling a consultation with us at (929) 724-7529 today.