Use of trademarks in the Metaverse for virtual goods and NFT

In the Philippines, trademarks for virtual goods and NFTs fall under Class 9 of the Nice Classification. This class covers downloadable digital files such as virtual clothing, digital art, music, and other electronic content. However, simply stating “virtual goods” is not enough—IPOPHL requires applicants to specify the exact type of goods (e.g., “downloadable virtual sneakers” or “downloadable digital artwork”).

The 12th Edition of the Nice Classification also explicitly includes downloadable digital files authenticated by NFTs in Class 9. Importantly, NFTs are not goods themselves but serve as digital certificates on a blockchain verifying ownership or authenticity of digital items. IPOPHL, like WIPO, requires applicants to describe the goods or services associated with NFTs (e.g., “downloadable digital files authenticated by non-fungible tokens, namely, digital fashion items”).

Trademark Risks in the Metaverse

The use of trademarks in the Metaverse—a network of interconnected 3D virtual environments—is rapidly expanding. Many brands are already engaging in virtual commerce, offering digital clothing, virtual real estate, and branded avatars.

Failing to extend protection to virtual goods and NFTs poses risks:

• Your trademark may not cover virtual applications, leaving gaps that infringers can exploit.
• Incorrect classification may limit your rights, making enforcement more expensive and complicated.

For example, Nike has filed applications in multiple jurisdictions for virtual sneakers, while Hermès has been involved in litigation against the “MetaBirkin” NFT project for misusing its luxury handbag brand. In the Philippines, IPOPHL has emphasized that registration in the correct class is essential for enforceability, particularly in emerging digital markets.

Philippine Trademark Procedure for Virtual Goods

When filing before IPOPHL, the trademark registration process follows several stages:

1. Filing and Formality Examination – IPOPHL assigns an application number after confirming the completeness of documents.
2. Substantive Examination – The examiner reviews the mark for registrability, including whether the description of goods (such as “downloadable NFTs”) is clear and specific.
3. Publication in the IPO Gazette – The mark is published for opposition. Competitors may file an opposition if they believe the mark infringes their rights.
4. Registration and Issuance of Certificate – If no opposition is filed, or if opposition is dismissed, IPOPHL issues a Certificate of Registration.

If IPOPHL refuses registration, the applicant may appeal to the Bureau of Legal Affairs (BLA), Director General, Court of Appeals, and even the Supreme Court.

Relevant Philippine Case Law and Examples

While there is no high-profile Philippine NFT trademark case yet, some analogous rulings illustrate how IPOPHL and the courts may approach Metaverse disputes:

• Zuneca Pharmaceutical v. Natrapharm (G.R. No. 218677, Sept. 8, 2020) – The Supreme Court held that prior registrants enjoy protection over subsequent confusingly similar marks. This principle will likely apply if an NFT project adopts a brand name identical to a registered Philippine trademark.
• Shang Properties Realty Corp. v. St. Francis Development Corp. (G.R. No. 190706, July 31, 2013) – The Court stressed that brand confusion can exist even across different industries if consumers are likely to believe the products come from the same source. Applied to NFTs, this suggests that even if a brand has not yet filed in Class 9, its reputation could provide grounds for enforcement.

Practical Guidance for Brand Owners

To safeguard your IP in the Philippines against misuse in the Metaverse and NFT markets, consider:

• Registering your mark in Class 9 for downloadable digital goods (including NFTs).
• Considering Class 35 (retail services for virtual goods), Class 42 (online hosting of non-downloadable digital content), and Class 36 (financial services involving digital tokens).
• Conducting a trademark audit to confirm your brand is protected in all relevant classes.
• Leveraging copyright law to protect digital artworks, music, and design elements that may be used as NFTs.

The Future: Open Legal Questions

The Metaverse presents new challenges for enforcement. Questions remain about whether it will eventually have its own dispute resolution mechanisms, and whether IP owners can effectively pursue anonymous infringers behind NFT wallets. IPOPHL, as a WIPO member, is closely monitoring these developments, and case law in the coming years will likely provide clearer guidance.

‍