As recently reported by Finbold.com, applications for the registration of trademarks related to NFT’s (non-fungible tokens) increased by a factor of 400% in 2021 over the 2020 rate and the rate of registration applications is expected to increase to at least 15 registration applications per day to be filed with the U.S Patent and Trademark Office.
So, why are brand rushing to file registration applications for NFT trademarks?
According to Finbold.com,
“The trademark application emerges when the NFT scene is attracting curiosity, excitement, skepticism, and enthusiasm over the potential prospects. The filings point to companies and individuals’ greater need to enter the blockchain space to protect their brands, banking on the sector’s potential.
The need to file trademarks has been necessitated by several factors, including the goal to root out fake duplicates that have been on the rise. For instance, OpenSean, an NFT marketplace, revealed that many minted collectibles on the platforms were plagiarised works, fake collections, or spam.
Generally, the trademarks will enable most brands to make money from the intellectual property without physical goods. Overall, if brands fail to protect against fraud, it might have lasting effects since consumers might feel defrauded if counterfeits end up hitting the market.
Amid the rush to file trademarks, some already established brands are leading the way, seeking to expand their reach into the space. For instance, leading brands like Victoria Secret has filed four trademark applications for digital collectibles and media developed through blockchain technology, alongside online clothes and media for use in the virtual world.
The prospects in the virtual world have also seen fast-food chain McDonald’s (NYSE: MCD) file 12 trademark applications for a virtual restaurant in the metaverse. Elsewhere, the New York Stock Exchange (NYSE) filed a new trademark for several crypto products, including non-fungible tokens (NFTs).
In this line, virtual worlds like the metaverse offer marketing opportunities for companies to provide customers with personalized and interactive experiences. Consumers can, therefore, easily engage with brands as avatars in real-time. Consequently, brands get a chance to understand their customers and help develop lasting relationships.”
WHY IT MATTERS. In the rush not to be left behind, most major brands seem to either be ignoring all the unanswered questions surrounding NFT’s or to be misunderstanding of their potential for major complications down the road. For example, major questions have arisen in recent months over the interplay between NFTs and copyright law as well as the impact of trademark laws, U.S. and foreign, regarding those same NFTs. And most of those questions will not be answered until new statutes or regulations are drafted and enacted or the court system addresses the fallout throughout what promises to be protracted and very costly civil litigation.