Nike apply for digital trade marks for Virtual Goods in the Metaverse

Like a scene from Back to Future Part II (*but in present day 2022), it was widely reported back in November 2021 that Nike amongst other big brands (such as Gucci and Prada) were getting their digital trade marks (Nike, Just Do It, Swoosh, Jordan, Nike Air Jordan, the swoosh logo etc) in order by filing new intent-to-use applications with the U.S. Patent and Trademark Office for virtual goods ranging from footwear, clothing, sports bags, art, toys and accessories for use online and in online virtual worlds. Applications were also filed by Nike in Canada, Mexico, Singapore and Switzerland. Facebook have also recently rebranded as Meta and Disney has announced its plans to “connect the physical and digital worlds…allowing for storytelling without boundaries”. Great Scott! Welcome to the Metaverse. An inevitable new iteration of the internet apparently. 

The advent of the Covid-19 pandemic: working from home and attending events virtually has propelled the development of the Metaverse, so called digital platforms which allow users to attend events digitally whether it be playing games, attending parties and or music events hosted by famous artists and bands via Virtual Reality/Augmented Reality headsets. 

Legally, the implications of global brands such as Nike applying to trade mark a whole new range of virtual goods for use online and in online virtual worlds are potentially far reaching.  Traditionally trade marks provide protection to brand owners for word or figurative marks (as well as some other less common marks such as colours or smells) which are intrinsic to their business in real life jurisdictions. In the UK registered trade marks are afforded this protection by a statutory framework including the Trade Marks Act 1994. Unregistered rights are afforded protection using the tort of passing off.  Although some commentators, including Meta, state that the Metaverse is yet to be created, the general consensus of commentators is that trade mark protection will be available in the Metaverse, regardless of the fact that trade mark registration is territorial.

Unfortunately, the law is currently unclear on how it will protect brands such as Nike operating in the fast evolving Metaverse. Whilst existing ‘take down’ procedures will give brands at least one avenue of protection from particularly egregious infringement in the Metaverse, and loss of revenue is likely to be limited (although may still be substantial), reputational damage is no doubt a concern. The use of a brand’s trade mark(s) in online space is notoriously difficult to control and regularly leads to uses that do not represent brand image. Conversely, if brands seek to control such use, there may be further reputational damage due to possible negative PR. Brands should also be wary as these points are only relevant for registered trade marks, it remains to be seen how unregistered rights will be protected in the Metaverse.

Nonetheless brands are moving a pace to secure and enforce digital trade marks. A recent report that Nike is suing StockX over unauthorised sneaker non-fungible tokens (NFTs) is a prime example of why Nike has moved to digitise its trade mark portfolio, so that it can attempt to police unauthorised infringing use in the so-called Metaverse, especially given that Nike’s own use of NFTs has reportedly generated 6 figure sums for the brand (Nike Sells Virtual Sneaker For $186,000 In The Metaverse And Users Can't Even Wear Them). 

The move also reflects the intention of Nike to seek to monetise the Metaverse via the sale of virtual goods and to strengthen its trade mark rights for use on virtual trainers and clothing  as well as building on collaborations with video game companies such as Xbox and game platforms like Roblox.

Nike itself has confirmed that the creation of Nikeland a new bespoke world with the backdrop of its world headquarters inside Roblox’s immersive 3D space, is building on its goal to turn sport and play into a lifestyle for Nike fans “to connect, create, share experiences and compete”. In addition to connecting and competing, fans can also shop in Nikeland’s digital showroom, with the digital shopping experience enabling users to “gear up in classics like the Air Force 1 and Nike Blazer and in new drops like the Air Force 1 Fontanka and the Air Max 2021, along with a host of other Nike apparel staples like ACG and Nike Tech Pack.”

As applications for digital trade marks are filed thick and fast by global brands in various jurisdictions it will be interesting to see how different regulatory frameworks around the world respond to the fast paced commercialisation of this largely unregulated virtual world, the Metaverse. Watch this space.

Irwin Mitchell's Media and Entertainment lawyers provide legal advice to individuals and businesses across the music, TV, film, literary, gaming and digital media industries, If you have any questions, please do get in touch.