But with the rise of ‘digital products’ which don’t exist anywhere except the online world, there are new considerations for start-ups when it comes to which trademarks they may need to secure.

While it could be easy to overlook the need to trademark virtual assets such as non-fungible tokens and blockchain, it’s important to protect what makes your brand recognisable and trusted by customers – whether it features online or offline.

Can non-fungible tokens be trademarked?

Non-fungible tokens (NFTs) are digital assets which confirm ownership of items like digital art, music, real estate or photographs.

More than 11 million people are currently using NFTs (Statista), with more than 12,000 sales across the globe every day (Bankless Times). Big brands like Gucci, BMW and Ray-Ban were early adopters of these digital assets, and many start-ups are also making use of NFTs as a cost-effective way of trading – as they’re not required to physically send the product or the proof of ownership to the customer, so there are no supply chain costs involved in sales.

Much like physical loyalty cards look different from each other to ensure a customer can determine one store’s from another’s when they reach into their wallet, NFTs are also usually designed to be instantly recognisable. This is why registering a trademark is crucial, because it ensures other brands using NFTs cannot replicate yours, and that you have means of legal recourse if they do.

There have already been a number of notable court cases involving NFTs, including a legal victory for fashion brand Hermès who sued the creator of the ‘MetaBirkin’ – an NFT depicting the Hermes Birkin bag – for trademark infringement, winning the case after three days of jury deliberation. Football club Juventus FC also won a case against a company called Blockeras SRL which was selling NFT player cards which used the club’s trademarks (Connect on Tech).

Do trademarks apply to blockchain?

Much like NFTs, blockchain is a digital concept, which essentially keeps a record of asset ownership and transaction in a chain of blocks, hence the name. With each block capable of holding all of the data for a particular transaction, the use of blockchain can eliminate the need for banks or notaries when assets change hands – again proving popular for startups due to the perceived simplicity and lower costs associated with this method of trading.

There are a number of trademark classes a blockchain start-up could consider, depending on the exact nature of their business. If offering supply chain management solutions, the company could register a trademark under the class which covers software development, IT services and consultancy. Or if trading in cryptocurrency, the business could apply for a trademark under the class relating to financial services.

Interestingly, there are also a number of companies using blockchain to further strengthen the protection of their brand – by being able to store data about asset ownership digitally, businesses are able to prove the legitimacy of any claim they have over product, service or other trademarked asset with ease.

What are the risks of not trademarking digital assets?

Failing to register a trademark for digital assets leaves them open to being copied by another company – whether deliberately or accidentally.

With brand reputation being a crucial element of business success, and brand consistency increasing revenue by between 10% and 20% (Marq), it’s easy to see the negative impact if customers are confronted with multiple versions of the same digital asset. Customers want to instantly recognise a brand – and that’s why the biggest companies out there are fastidious about protecting their assets and identity – and if there are multiple variations of, for example, an NFT which look nearly identical then it can be difficult to distinguish between them, and even more difficult to place your trust in them.

For startups, who haven’t yet built the kind of strong brand identity that long-established multi-nationals benefit from, it’s even more important for their brand to be protected from day one – which is why trademarking all assets should not be delayed.

Filing a trademark can also support businesses who find themselves challenged by a competitor: with new technologies comes additional legal complexities, meaning start-ups must do all they can to protect themselves and their brands, and ensure there is no doubt as to the proper legal ownership of all the assets associated with their company.

Virtual assets can be bought and sold anywhere in the world, so it’s also worth considering seeking trademark protection outside of the country you are based within.

Otherwise, with a registered trademark only in one country, it can be difficult to take legal action unless it can be proved that the infringement targeted customers within that country. Factors such as the use of country-specific domain names, which currency is used for transactions, and the language used on the website can support in establishing whether there is jurisdiction for the court to rule on a trademark dispute.

Given the additional complexities when seeking a trademark in a virtual world which is not neatly dissected into countries with their own registration offices and legal systems, engaging a trademark attorney is a valuable investment for start-ups who have digital assets to protect.

While guiding you through the registration process and preparing a strong application, they can also undertake comprehensive searches for existing trademarks and identify any potential conflicts, helping with any disputes which arise and supporting you as your company grows.

The importance of protecting all of your assets cannot be understated, and while the trademark process might be as complicated as virtual currency seems to non-technical minds, it’s too crucial to overlook. Without the legal protection afforded to brands who are savvy about trademarking, it can be exponentially more difficult to build a strong brand identity and protect what is rightfully yours.

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