INTA argues that NFTs are within scope of US trademark protection

Amicus brief filed by the association concerns whether intangible products like NFTs are “goods” for the purpose of the trademark act
Mega Mutant Serum NFT seen on the silhouette of smartphone and some of the MUTANT APE YACHT CLUB NFTs seen on a blurred screen behind. Stafford, United Kingdom, April 18, 2022

Case involves Yuga Labs' Bored Ape Yacht Club family of trademarks mundissima; Shutterstock

The International Trademark Association (INTA) has filed an amicus brief with a US appeals court arguing that intangible goods like non-fungible tokens (NFTs) are within the scope of US trademark law and thus are eligible for trademark protection.

It filed the brief concerning the case Yuga Labs, Inc. v. Ryder Ripps, Jeremy Cahen, which hinges on whether NFTs are “goods” for purposes of Section 1125(a), the unfair competition provision of the the Lanham Act, which governs US trademark law.

In this case, the defendants, Ryder Ripps and Jeremy Cahen, distributed allegedly infringing NFTs using the plaintiff Yuga Labs’ Bored Ape Yacht Club family of trademarks.

In opposing Yuga Labs’ motion for summary judgment on its false designation of origin claim, the defendants defined NFTs solely as “software tokens” and argued that NFTs are therefore ineligible for trademark protection because they are intangible goods thereby meaning that Yuga Labs had no valid trademark rights to enforce.

INTA notes that the Lanham Act refers to the registration and use of trademarks in relation to any goods or services, without limiting definition.

In fighting the suit, the defendants said the United States Patent and Trademark Office (USPTO) had rejected Yuga Labs’ applications to register several of its trademarks because NFTs are not goods in trade. The defendants further argued that the US Supreme Court has required tangibility for trademark protection under the 2003 case Dastar Corp. v. Twentieth Century Fox Film Corp.

The district court rejected the defendants’ arguments, citing the pivotal Metabirkin decision between luxury giant Hermès and digital artist Mason Rothschild, which stated that the Dastar judgment did not rule on whether the Lanham Act covers intangible goods and instead found that NFTs qualify as goods under the act. The landmark case found in favour of Hermès finding that the NFTs produced by Rothschild infringed its trademarks.

INTA insists case law, including the Supreme Court’s decision in Dastar, supports the finding that the NFTs at issue and intangible goods generally are protected by the Lanham Act. It continues that the act “focuses on consumer perception and the meaning of trademarks to consumers, and, as the district court noted, consumers associated Yuga Lab’s trademarks with the underlying assets and benefits it offered”.

INTA continues that NFTs “are here and they are here to stay” and that consistent application of trademark law is “crucial to provide consumers and brand owners with the certainty needed to invest in NFTs confidently”.

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