Funding is flowing into the metaverse and broader web3 endeavors. Since March 2021, sales of non-fungible tokens (“NFTs”) have made headlines – both for the eye-watering prices that some were commanding at auction and for the potential for NFTs to become a robust market, as brands appeared to be eager to market themselves and connect with consumers by way of these relatively novel pieces of technology. For Q3 in 2021, Forbes reported that the sale of NFTs had amounted to $10.7 billion in Q3 2021, a more than 8-fold increase from the previous quarter. As of January 2022, the monthly volume of NFT sales on the OpenSea marketplace hit an all-time high of $5 billion. 

Fast forward to October 2021 and Facebook, Inc.’s announcement that it would rebrand to Meta, Inc. in furtherance of a shift away from being a social media company to becoming “a metaverse company,” seemingly solidified a larger shift among companies that a blend of “real” and virtual worlds is the future. 

Against that background, brands have launched various ventures in the metaverse – from Gucci’s Garden pop-up in the Roblox metaverse (complete with virtual Gucci-branded handbags and apparel) to Nike’s “Nikeland” experience – and at the same time, rushed to file trademark applications for registration for their current (or far more frequently, their impending) uses of their trademarks on virtual goods/services and NFTs. 

All the while, cash has been flowing into the space (with more than $2 billion and $62.8 billion being invested in augmented reality ventures and virtual world projects, respectively, in 2021, per CrunchBase), and at least a one major acquisition has taken place. With so much activity underway when it comes to the virtual world, from metaverse ventures to crypto funds, we have put together a (running) timeline of investments and M&A events to provide a broad overview of which players are raising funding, getting acquired, and what the trajectory of this segment of the market – which only appears to be gaining in steam – looks like more generally … 

Sept. 13, 2022 – Doodles Raises $54 Million in New Round

Doodles announced that it has raised $54 million in equity funding, backed by Reddit co-founder Alexis Ohanian’s Seven Seven Six, along with Acrew Capital, FTX Ventures and 10T Holdings. Founded in 2021, the web3 NFT, media, and entertainment brand says it will use the funding “to rapidly acquire a world-class team of engineers, creatives, marketers and business executives, as well as to fund product development, acquisitions, proprietary technology, media, and collector experiences.” Doodles is looking to grow its team from 11 people to 30. On the heels of announcing the appointment of Pharrell Williams as chief brand officer in June, Doodles revealed that it recently hired a head of brand partnerships.

“We want to create products for our core collector base, but at the same time utilize these great forms of marketing like music, to introduce new people to Web3 and onboard them into the Doodles ecosystem,” Vancouver-based Doodles CEO Julian Hoguin says.

Sept. 7, 2022 – Tencent Boosts Investment, as Ubisoft Entertainment Looks to Metaverse

Tencent Holdings Ltd is raising its stake in Ubisoft Entertainment SA in a deal that values the games developer at about $10 billion, per Reuters. In addition to falling in line with the enduring trend of “deep-pocketed Chinese tech majors continuing their overseas search for growth,” the Tencent, Ubisoft deal is notable in that it comes as Montreuil, France-headquartered Ubisoft – and other traditional gaming companies – increasingly eye the metaverse to generate revenue from their existing IP. Early this year, for instance, Animoca Brands, the Hong Kong-based blockchain company behind The Sandbox, announced that it had formed a strategic partnership with Ubisoft, in which Ubisoft would receive its own land on the Sandbox’s metaverse platform and develop game experiences with NFTs in the virtual world.

August 25, 2022 – Nreal Raises $15 Million to Build Out AR Efforts

Nreal announced a $15 million investment from luxury eyewear brand Gentle Monster’s parent company, IICOMBINED, in furtherance of its focus on the consumer augmented reality (“AR”) market. The parties say that they are “exploring new collaboration opportunities to push the boundaries of fashion and technology,” with the investment coming as San Francisco-based “Nreal makes strides in expanding the appeal of AR [eyewear] to a broader audience base [and] delivering on the promise of AR for consumers everywhere.”

“This investment is an exciting try for the combination and exploration for the boundary of fashion and tech. In the future, we will leverage both parties’ strength and make joint efforts to create more possibilities,” said Hankook Kim, co-founder of Gentle Monster and CEO of IICOMBINED.

June 30, 2022 – Metaverse Platform Mona Raises $14.6 Million in Series A Round

Mona has raised a $14.6 million in a Series A round co-led by Protocol Labs, Archetype and Collab+Currency. The San Francisco-based company touts itself as providing “the first and only platform and network for creators to build, mint, and sell interactive metaverse worlds as NFTs.” In a statement, Mona CEO and co-founder Justin Melillo said, “With the closing of this round, we will continue to grow our global, vibrant community of builders as we onboard thousands of new creators to the open metaverse and web3. The metaverse doesn’t have to belong to big tech companies – it can, and will, be a place for everyone.”

June 23, 2022 – Gucci Invests in SuperRareDAO Ahead of Exhibition Launch

Gucci has entered into a partnership with NFT marketplace SuperRare, acquiring $25,000 in $RARE tokens to join the SuperRareDAO, and launch its the Vault Art Space. “The vault is Gucci’s digital space,” SuperRare co-founder and chief product officer Jonathan Perkins said this week. “And they are going to be working with artists and selling art through their space, which will be powered by SuperRare technology. The brand’s acquisition of RARE tokens gives it rights in the decentralized autonomous organization that governs the SuperRare platform. According to SuperRare, “Members of the community who hold governance tokens” – i.e., $RARE, the new SuperRare curation token – “can use them to vote on issues and decisions that affect the organization.”

June 23, 2022 – LincTex Digital Raises $100 Million for Digital Fashion Push

LincTex Digital raised $100 million in a round led by Hillhouse Capital and CDH Investments, with the Hangzhou-based company, which does business as Style3D, saying that it will use the funds for international expansion and to make further inroads into the digital fashion realm. “From developing virtual try-on technologies and 3D body scanning in the beginning,” Reuters reported that Style3D has now “broadened its offering to include digital services for fashion designers and manufacturers so they can use big data to design and produce fashion collections.”

June 22, 2022 – EBay Acquires NFT Marketplace KnownOrigin

eBay has acquired NFT marketplace KnownOrigin for an undisclosed sum, the parties confirmed in a release. Facilitating nearly $8 million in NFT trading since its founding in 2018, Manchester, UK-based KnownOrigin states that its “technology and platform provides artists with a place to create unique, authentic, digital collectibles, in the form of NFTs.” The deal is “an important step in eBay’s tech-led reimagination,” the parties revealed, “ushering in a new era of digital collecting to the world’s top destination for collectibles.”

“eBay is the first stop for people across the globe who are searching for that perfect, hard-to-find, or unique addition to their collection and, with this acquisition, we will remain a leading site as our community is increasingly adding digital collectibles,” said Jamie Iannone, CEO of eBay. “KnownOrigin has built up an impressive, passionate and loyal group of artists and collectors making them a perfect addition to our community of sellers and buyers. We look forward to welcoming these innovators as they join the eBay community.”  

June 19, 2022 – Endstate Raises $5.5 Million in Seed Round

Combining NFTs with proprietary technology to definitively link physical products to digital assets, Endstate announced a $5.5 million seed round with investors including Archetype Ventures, Accomplice Ventures, Road Capital, and CMS Holdings, among others. Founded in 2020 by Bennett Collen and Stephanie Howard, Massachusetts-based Endstate says that it will use the funding to “help us reach the Endstate sooner — accelerating our product development and innovation roadmaps, and allowing us to continue to hire world-class talent.”

May 22, 2022 – BUD Raises $37 Million in Series B

BUD has raised $37 million in a Series B round led by Sequoia Capital India, with participation from Chinese billionaire William Lei Ding’s company NetEase, Chinese VC firms ClearVue Partners, and Northern Light Venture Capital, along with existing investors GGV Capital, Qiming Venture Partners, and Source Code Capital. The Singapore-based metaverse startup will use the funds to “launch Web3 products, the next generation of the internet that runs on blockchains,” and will also introduce NFT projects to allow users to “own and trade virtual assets derived from the metaverse,” per Forbes. The round follows from BUD’s Series A round, which was completed in February.

May 10, 2022 – Arianee Raises €20 Million in Series A Round

Arianee, the leading end to end web3 solution for brands, has raised a €20 million ($21.09 million) in a Series A led round by Tiger Global. Existing investors Bpifrance, ISAI, Noia Capital and Cygni Labs, joined the round, along with Commerce Ventures, Motier Ventures and Pierre Denis, former CEO of Jimmy Choo. In a release on Tuesday, Paris-based Arianne stated that “web3 is a unique opportunity for companies and individuals to regain control over their digital presence, especially their data, [and] it’s the time for businesses to free themselves from the dependency on big platforms and lead new usage and innovation.”

An end to end web3 solution built to create, distribute and interact with NFTs, including by enabling brands to tokenize, distribute and leverage value through NFTs, Arianee says it will use the new funds to accelerate its international presence by growing its New York office, recruiting new talent and continuing the development of its products and services. The 4-year old company says its staff has tripled since its last funding round in March 2021, and it currently boasts more than 50 clients and partners (including IBM and the metaverse The Sandbox) in Europe and North America. 

May 4, 2022 – immi App Secures $50 Million Valuation Following Seed Round

Mark Cuban, singer Pitbull, Zoom founder Eric Yuan, DJ Steve Aoki, and Paris Hilton’s 11:11 Media are among the investors in a seed round for animation app immi, a round that an immi spokesman says values the company at $50 million. Immi characterizes itself as “the only real-time animation platform making full-body 3D cinema-quality characters and facial tracking technology accessible to anyone, anywhere.”

May 2, 2022 – Yuga Labs Raises $285 Million in Virtual Land Sale

Yuga Labs. the company behind the Bored Ape Yacht Club collection of NFTs, raised approximately $285 million worth of cryptocurrency by selling tokens that represent land in a virtual world game it says it is building. In an online sale on April 30, Yuga Labs sold NFTs called “Otherdeeds,” which can exchanged as plots of virtual land in a Bored Ape-themed online environment called “Otherside” that is expected to launch in the near future, per Reuters. The 55,000 Otherdeeds that were offered up were purchasable using the Yuga-created ApeCoin cryptocurrency

Apr 11, 2022 – Epic Games Raises $2 Billion in Funding for Metaverse Endeavor

Fortnite creator Epic Games raised $2 billion from Sony Group and Kirkbi, the family owned holding company behind the Lego Group, in a deal that values the company at $31.5 billion. Epic will use the new cash to help fund the kid-focused metaverse endeavor that it announced last month in partnership with Lego. “As we reimagine the future of entertainment and play we need partners who share our vision. We have found this in our partnership with Sony and Kirkbi,” said Tim Sweeney, the CEO and founder Epic Games, in a statement. “This investment will accelerate our work to build the metaverse and create spaces where players can have fun with friends, brands can build creative and immersive experiences and creators can build a community and thrive.”

“All three companies highly value both creators and players, and aim to create new social entertainment exploring the connection between digital and physical worlds,” the companies said in a statement.

Apr 8, 2022 – The Fabricant Raises $14 Million

Digital fashion brand The Fabricant raised $14 million in a Series A round led by Greenfield One, and with participation from Ashton Kutcher and Guy Oseary’s Sound Ventures, and Red DAO, and among others. The Netherlands-based company says that the funding will be used to support and expand its co-creation and NFT platform, The Fabricant Studio, which enables “everyday users to become creators [and] craft high-end digital fashion NFTs in collaboration with their favorite brands,” according to Maaria Bajwa, Investor at Sound Ventures.

Jascha Samadi, Partner of Greenfield One said in a statement, “Within virtual environments we are likely going to have multiple digital reflections of our physical self. The Fabricant Studio allows any creator to become their own fashion designer in the metaverse — paired with Web3 technology, digital fashion becomes unique, tradeable and accessible for the masses. The team behind The Fabricant identified this paradigm of user-generated fashion very early on, long before NFTs caught mainstream attention.”

Mar 22, 2022 – Kering Among Investors in $1.5 Billion Haun Ventures Raise

French luxury goods group Kering is among the investors in former Andreessen Horowitz general partner Katie Haun’s new crypto fund, Haun Venture. Haun Ventures will invest in “both start-up equity, and in some cases the cryptocurrencies issued by those start-ups, also known as tokens,” per CNBC, which reported that Haun’s fund will be divided into two segments: $500 million for early-stage companies and protocols, and $1 billion for later-stage projects.

Mar 22, 2022 – Yuga Labs Valued at $4 Billion Following Round

Yuga Labs announced that is now at valued at $4 billion, following a $450 million funding round led by Andreessen Horowitz’s crypto fund, a16z crypto. According to Reuters, “Metaverse gaming company Animoca and its subsidiary, The Sandbox, and crypto exchange FTX are also among the investors that participated in the latest round.”

Mar 18, 2022 – Universal Music Acquires BAYC NFT for $360K

Universal Music Group has acquired Bored Ape #5537, a female character NFT now known as Manager Noët All, from its former owner for $360,817. The digital asset will join the digital musical group, Kingship, that Universal’s next-gen label 10:22PM created in November 2021. The group initially consisted of four “rare Golden Fur and Bluebeam Apes” from Yuga Labs’ collection of Bored Ape Yacht Club and Mutant Ape Yacht Club NFTs. According to Reuters, “Kingship, which exists solely in digital form, will have its own website and presence on messaging platform Discord, and will eventually produce new music and give virtual performances in the metaverse.”

Mar 11, 2022 – Yuga Labs Acquires CryptoPunks, Meebits from Larva

Yuga Labs, the titan behind the Bored Ape Yacht Club and Mutant Ape Yacht Club NFTs, announced that it has “acquired the IP of the CryptoPunks and Meebits NFT collections from Larva Labs,” another giant in the digital assets space, which means that Yuga now “owns the brands, copyright in the art, and other IP rights for both collections, along with 423 CryptoPunks and 1711 Meebits.” The company says that its first move will be to grant CryptoPunks and Meebits holders “the same commercial rights that BAYC and MAYC owners enjoy” in a move that “further align[s] CryptoPunks and Meebits with the web3 ethos.” 

Mar 8, 2022 – UNXD Raises $4 Million

UNXD announced that it has raised a $4 million funding round led by Animoca Brands, Polygon Studios, and Red DAO. In addition to partnering with brands, such as Dolce & Gabbana, to create NFTs, the B2B metaverse-focused company also hosts a Polygon-based (Ethereum-compatible) digital luxury fashion marketplace, which is says is the home of “the best of digital luxury and culture.” Founded in 2021 by Nick Gonzalez and Shashi Menon, UNXD states that it will use the new cash to further scale its “team, ecosystem, and roster of partner brands.”

Mar 7, 2022 – Space Runners Raises $10 Million 

Metaverse fashion brand Space Runners has raised $10 million in a funding round co-led by Polychain and Pantera Capital, and including Accel, Jump Crypto, Animoca Brands Chairman Yat Siu, and Twitch co-founder Justin Kan. “We are designing and launching fashion items as NFT collections, which is ongoing,” Space Runners CEO Deniz Özgür stated. “But we are also launching the first phase of our fashion metaverse. Rather than just an urban cyber style, we are giving more weight to beauty and aesthetics, and we’ve been collaborating with some of the most popular fashion agencies in New York.”

Mar 7, 2022 – Immutable Raises $200 Million

Immutable raised $200 million from investors led by Singapore’s Temasek, valuing the Australian NFT startup at $2.5 billion, the company announced. Investors include Mirae Asset, ParaFi Capital, Declaration Partners, and Tencent Holdings, among others.

Mar 3, 2022 – Nifty League Raises $5 Million in Seed Round

Nifty League, a leading NFT gaming platform, today announced the close of a $5 million seed investment round led by New York-based private investment firm RSE Ventures, along with Spartan Group, Lerer Hippeau, VaynerFund, Private Ventures Group, DraftKings Co-founder Matthew Kalish, and Gallery Media Group CEO Ryan Harwood, among others. Launched in September 2021, Nifty League is bringing “competitive gaming to Web3 – moving away from play-to-earn into a new era of play-and-earn by offering a fun and engaging gaming ecosystem.” 

Feb 25, 2022 – CollectID Raises $3.5 Million in Seed Round

CollectID closed a $3.5 million seed funding round led by SeventySix Capital and Hellen’s Rock. The Swiss-based startup combines NFT technology, backed by an immutably secure blockchain, through a tamper-proof NFC tag to provide a secure and unique identity for each product that can be applied to the majority of physical objects including clothes, accessories, shoes, watches.

Feb 22, 2022 – Metamall Raises $400K in Latest Round

Metamall, a metaverse start-up that allows buyers to own, build and develop virtual real estate has closed its Initial Dex Offering – or “IDO” – to raise $400k with the supply of 80 million tokens. With this round and previous funding (Metamall previously raised $4.6 million in its seed, strategic and private rounds and more than $2 million through NFT sales), Metamall announced that it is the first retail commerce-themed metaverse platform in the world to raise funding more than $7 million from private and public investors.

Feb 21, 2022 – Jambo Raises $7.5 Million in Seed Round

Jambo raised $7.5 million in seed funding in furtherance of Africa’s most notable metaverse venture. The Congo-based startup is angling to build Africa’s web3 user acquisition portal through “learn, play, earn” and democratizing access to crypto-based income-generation opportunities. According to TechCrunch, “Experts say Africa is poised to be disrupted by web3 in a similar fashion that has seen Southeast Asia become one of the best markets for web3.”

Feb 14, 2022 – BUD Raises $15 Million in Series A+

BUD raised $15 million funding in a Series A+ round. Founded by former Snap engineers Shawn Lin and Risa Feng in 2019, BUD allows users to create customizable 3D experiences and interact with others by way of its app. 

Feb 13, 2022 – BNV.ME Raises $4 Million to “Elevate NFT Experiences in the Metaverse”

Brand New Vision Ltd, the company behind BNV.ME, the leading platform taking fashion into Web3.0 through 3D Product Creation, NFT sales, and Future Wearability, completed a $4 million Series A funding round led by Animoca Brands. In a statement, BNV.ME said that the funding will enable it to further expand its capabilities for creating elevated NFT experiences across the metaverse offerings that already exist and those that are under development, as well as growing its visibility and presence across the worlds of fashion, gaming, and crypto communities.

Feb 3, 2022 – nfinite Raises $15 million in Series A

Next-generation visualization and e-commerce merchandising provider nfinite raised $15 million in Series A funding led by US Venture Partners. New York-based nfinite stated that the funding would be used to accelerate development of its SaaS 3D visualization platform and to scale the company’s operations in North America. 

Dec 13, 2021 – Nike Acquires RTFKT

NIKE, Inc. announced that it would acquire RTFKT, “a leading brand that leverages cutting edge innovation to deliver next generation collectibles that merge culture and gaming.” Nike President and CEO John Donahoe said in a statement that the acquisition is “another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming and culture,” and one that will help to “extend Nike’s digital footprint and capabilities.” Terms of the deal were not announced. 

Nov 22, 2021 – Niantic Raises $300 Million to Build “Real-World Metaverse”

Niantic, the augmented reality platform behind Pokémon GO, raised $300 million from Coatue, valuing the company at $9 billion. The San Francisco-based startup announced that it will use the funding to build the “real-world metaverse.”

Nov 5, 2021 – VNTANA Brings Funding to $12.5 Million

VNTANA, the industry leader in 3D Content Management Software, closed its latest round of funding, with investment from Mark Cuban, former Oculus CEO Brendan Iribe, Flexport and Anorak Ventures, among others, bringing its total funding to $12.5 million in total. VNTANA says that its tech “makes it easy for brands across fashion, footwear, furniture, tools, sporting goods, and more” – including Ugg-owner Deckers Brands, Staud and Diesel – “to share and embed 3D and AR for sales and marketing use.” 

Oct 13, 2021 – Stage11 Raises a €5 Million Seed Round

Immersive music experience startup Stage11 raised a 5 million euro seed round led by Otium Capital, a European venture capital fund, backed up by founder and CEO, Jonathan Belolo. Stage11 stated that it is “setting out to redefine the interactive music experience by combining gaming, mixed reality, and digital collectibles,” including by building “a new creative canvas for artists, allowing them to invite fans to live, play, and create inside their performances and musical worlds.” 

May 5, 2021 – RTFKT Raises $8 Million 

RTFKT raised $8 million in a round led by venture capital firm Andreessen Horowitz, and that includes Riot Games co-founder Marc Merrill, Behance co-founder Scott Belsky, artist Fewocious, and former LVMH Chief Digital Officer Ian Rogers, among others, in furtherance of its quest to “empower the future of fashion.” The round valued the company – which was not even 2 years old at the time – at $33.3 million.

Apr 21, 2021 – The Fabricant Announces Funding Round

Leading virtual fashion firm The Fabricant announced the close of an undisclosed funding round in furtherance of its aim to “create tools and products that transform the fashion industry into a fully digital existence in both production and consumption, while democratizing fashion creation into a collaborative process utilizing 3D technology and the creativity of the consumer, accessible to everyone.” Participants in the round included 4impact, Borski Fund and Slingshot.

The rising popularity of non-fungible tokens (“NFTs”) has brought with it no shortage of lawsuits, as companies and creators look to navigate the volatile market for such digital tokens, and in many of the most interesting cases to date, the intellectual property issues that have come hand-in-hand with the use of the relatively novel technology. A growing number of lawsuits over NFTs – including the case that Nike filed against StockX over its use of Nike trademarks on NFTs tied to hot-selling sneakers and Hermès’ trademark battle against artist Mason Rothschild – are raising novel legal questions, while also parlaying some of brands’ biggest “real world” issues into the virtual world. And at the same time, these cases stand to provide some guidance for companies, as more and more brands look for ways to adapt their existing models for an increasingly Web3-focused world. 

The following is a running list of some of the most noteworthy lawsuits over NFTs that have been filed in the United States … 

Yuga Labs, Inc. v. Ryder Ripps, et al. – June 2021 (C.D. Cal)

The company behind the popular collections of Bored Ape Yacht Club (“BAYC”) tokens is suing a group of defendants, including Ryder Ripps in a headline-making trademark case, accusing the artist and other defendants of “trolling Yuga Labs and scamming consumers into purchasing RR/BAYC NFTs by misusing Yuga Labs’ trademarks.” In the complaint that it filed in a California federal court on June 24, Yuga Labs claims that Ripps, Jeremy Cahen, and a number of other affiliated defendants are on the hook for trademark infringement, false designation of origin, cybersquatting, and conversion for creating and selling NFTs that bear “the very same trademarks that Yuga Labs uses to promote and sell authentic BAYC NFTs.” 

Bored Ape Yacht Club NFTs on OpenSea

In furtherance of his alleged quest to “devalue the Bored Ape NFTs by flooding the NFT market with his own copycat NFT collection using the original Bored Ape Yacht Club images and calling his NFTs ‘RR/BAYC’ NFTs,” Yuga Labs alleges that Ripps has reaped “millions of ill-gotten profits from these sales” (an estimated $5 million), all while simultaneously using its trademarks to promote “the imminent launch of an entire NFT marketplace called ‘Ape Market’ solely to sell the RR/BAYC NFTs alongside authentic Yuga Labs NFTs.”

Yuga sets out claims of common law trademark infringement (as its long list of BAYC-centric trademark applications are still pending before the U.S. Patent and Trademark Office), false designation of origin and false advertising under the Lanham Act, cybersquatting, conversion, unjust enrichment, violations of California Business and Professions Code, intentional interference with prospective economic advantage, and negligent interference with prospective economic advantage. (Note: Yuga does not appear to have any copyright registrations for its ape images and does not claim copyright infringement in its complaint.)

UPDATED (Aug. 16, 2022): Counsel for Ryder Ripps has responded to the lawsuit waged against him and his business partner Jeremy Cahen by Yuga Labs, arguing in an anti-SLAPP motion that Yuga is looking to silence him for calling out the allegedly “racist and neo-Nazi” nature of the popular – and expensive – collection of NFTs.

Jeeun Friel v. Dapper Labs, et al – July 2021 (SDNY)

In a non-IP case, Jeeun Friel filed suit against Dapper Labs, Inc., on behalf of a purported class of similarly situated individuals, arguing that Dapper Labs and its founder and CEO Roham Gharegozlou sold NFTs called “NBA Top Shot Moments” in violation of federal securities laws, as the NFTs amount to unregistered securities. Specifically, Friel asserts that the Top Shot NFTs amount to securities because they “constitute an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others,” a nod to the test in SEC v. Howey, which established what qualifies as an “investment contract” and thus, is subject to U.S. securities laws.

Dapper Labs has pushed back against Friel’s claims, arguing that he has failed to establish that the NFTs meet the Howey test because the NFT buyers do not share either horizonal nor vertical commonality, and the NFTs at issue do not come with a reasonable expectation of profits, as they are “objects of play and not for investment or speculative purposes.”

(Given that the NBA Top Shots NFTs are hosted on a blockchain that is exclusive to Dapper Labs and can only be bought, sold, and traded on that blockchain, which is distinct from how the bulk of other NFTs work, this likely means that any decisions in this lawsuits (or other lawsuits like it) when it comes to the issue of whether the NFTs are securities could have relatively limited precedential value.)

Nike, Inc. v. Stockx LLC – Feb. 2021 (SDNY)

Nike filed suit against StockX early this year, alleging the Detroit-based marketplace is on the hook for trademark infringement and dilution, as well as unfair competition, in connection with its offering up of NFTs tied to images and physical versions of Nike footwear – albeit without receiving its authorization. To make matters worse, Nike claims that StockX is “selling those NFTs at heavily inflated prices to unsuspecting consumers who believe or are likely to believe that those ‘investible digital assets’ (as StockX calls them) are, in fact, authorized by Nike.” 

A listing for a StockX Vault NFT feating a Nike sneaker

Nike amended its complaint in May to add counterfeiting and false advertising claims.

StockX has since responded to Nike’s complaint, denying the bulk of the claims that Nike has lodged against it and asserting that they “lack merit, disregard settled doctrines of trademark law … and show a fundamental misunderstanding of the various functions NFTs can serve.” At the core of StockX’s defense is its claim that the NFTs at issue are little more than “claim tickets” or “digital receipts” used to “track ownership of a specific physical Nike product that StockX has purportedly authenticated using its ‘proprietary, multi-step authentication process’” – putting the sale of the sneakers (and corresponding NFTs) firmly within the realm of the First Sale Doctrine. 

Hermès International v. Mason Rothschild – January 2021 (SDNY)

In January, Hermès filed a trademark infringement, federal trademark dilution, false designations of origin, false descriptions and representations, cybersquatting, injury to business reputation, misappropriation, and unfair competition lawsuit against Mason Rothschild, the individual behind the collection of 100 MetaBirkins NFTs. Tied to images depicting furry renderings of its famous Birkin Bag, Hermès claims that in furtherance of his sale of the NFTs, Rothschild simply “rip[s] off Hermès’ famous BIRKIN trademark by adding the generic prefix ‘meta,’” which refers to “virtual worlds and economies where digital assets such as NFTs can be sold and traded.”

MetaBirkins NFT listings on OpenSea

Rothschild recently pushed for a dismissal of Hermès’ lawsuit on the basis that his “fanciful depictions of fur-covered Birkin bags and his identification of his artworks as ‘MetaBirkins’ are artistically relevant and do not explicitly mislead about their source or content,” and thus, are protected as artistic expression under the First Amendment. Unsuccessful, Judge Jed Rakoff of the U.S. District Court for the Southern District of New York sided with Hermès, holding that while there may be an “artistic aspect” to the images tied to the MetaBirkins NFTs (making the Rogers test applicable), Hermès has, nonetheless, sufficiently set out allegations that Rothschild’s use of “MetaBirkins” was not artistically relevant or was explicitly misleading.

A rep for Rothschild told TFL on July 27, “The judge ruled that MetaBirkins are artistic speech protected by the First Amendment. There are two remaining questions that the judge said need to be addressed. First, is the title “MetaBirkins” artistically relevant to the artwork? In our view the answer is clearly yes—the artworks are illustrations of imaginary fur-covered Birkin bags, and the title MetaBirkins describes what the artworks are about. The second question is whether I’ve made any explicit claim that Hermes is responsible for the MetaBirkins artwork, and again we look forward to showing that I’ve always identified myself as the creator, not Hermes.”

Halston Thayer v. Matt Furie, et al – March 2022 (C.D. Cal)

An aggrieved NFT buyer filed suit against cryptoartist Matt Furie for allegedly misrepresenting the number of NFTs that would ultimately be offered up in furtherance of a “scheme to artificially inflate the value” of his FEELSGOOODMAN Rare Pepe Card NFT. In the complaint, Halston Thayer alleges that Furie and the other defendants, including a decentralized autonomous organization set up in order to “feature and sell Furie’s cryptoarto,”duped him into “grossly overbidding” for the digital token he acquired for a cool $507,084 last fall by falsely advertised that only one of Furie’s Pepe NFTs would be made available. Thayer set out claims of fraudulent inducement, intentional misrepresentation, negligent misrepresentation, violation of unfair competition law, violation of the Consumer Legal Remedies Act, mistake of fact, breach of contract, breach of good faith and fair dealing, unjust enrichment. 

Roc-A-Fella Records, Inc. v. Damon Dash – June 2021 (SDNY)

Roc-A-Fella named Damon Dash in a copyright case (one of the first copyright lawsuits involving NFTs) in a bid to stop him from auctioning off the copyright to Jay-Z’s debut album “Reasonable Doubt” as an NFT. In its complaint, Roc-A-Fella – which Jay Z founded with Damon Dash and Kareem Burke in 1995 – alleged that Dash was planning to auction off the copyright rights to the famed album as an NFT despite not owning the copyright. Setting out claims of breach of fiduciary duty, conversion, replevin, and unjust enrichment, the record label argued that Dash does not own the copyright (Roc-A-Fella does), and as a shareholder in Roc-A-Fella, Dash is entitled to part of its profits, indirectly giving him some of the royalty income from Reasonable Doubt.

A judge swiftly blocked the NFT sale by granting a temporary restraining order in favor of Roc-A-Fella, and the parties settled the case in June 2022, clarifying ownership in a filing with the court that “RAF, Inc. owns all rights to the album ‘Reasonable Doubt,’ including its copyright. No shareholder or member of RAF, Inc. holds a direct ownership interest in ‘Reasonable Doubt’” – and explicitly limiting Dash’s ability to sell “any property interest in ‘Reasonable Doubt’” going forward. 

Miramax, LLC v. Quentin Tarantino et al – Nov. 2021 (C.D. Cal) – SETTLED

In November 2021, Miramax filed suit against Quentin Tarantino, seeking to enjoin the Pulp Fiction director from auctioning off “exclusive” memorabilia associated with the film in the form of “secret” NFTs. In its complaint, Miramax alleges claims of copyright infringement, trademark infringement, and unfair competition. In addition to arguing that Tarantino is likely to confuse consumers about the source of the Pulp Fiction-linked NFTs, Miramax alleges that Tarantino is on the hook for breach of contract, as his “narrowly-drafted” Reserved Rights (as distinct from Miramax’s “broad, catch-all rights,” which include “all rights . . . now or hereafter known. . . in all media now or hereafter known”) do not extend to his offering up of used excerpts of the screenplay as NFTs. 

Counsel for Tarantino has pushed back, asserting, “Miramax is wrong — plain and simple. Quentin Tarantino’s contract is clear: he has the right to sell NFTs of his hand-written script for Pulp Fiction and this ham-fisted attempt to prevent him from doing so will fail.”

UPDATED (Sept. 8, 2022): In a notice of settlement filed on Sept. 8, the parties alerted the court that they “have settled this case and expect to file their dismissal papers within two weeks.”

This article was initially published on July 1 and has been updated to reflect developments in the cases/new case filings.

Hermès made headlines last month in the wake of filing a trio of intent-to-use trademark applications, seeking to register its name, along with the Birkin and Kelly word marks, across a number of quintessential metaverse classes of goods/services – namely, Classes 9, 35, and 41 for the two famed handbag style names and a longer list (Classes 9, 35, 36, 41, and 42) for the Hermès word mark. The filings that counsel for Hermès lodged with the U.S. Patent and Trademark Office come as the French luxury goods company is embroiled in a trademark lawsuit against Mason Rothschild, which it lodged early this year over his sale of a collection of 100 “MetaBirkins” non-fungible tokens (“NFTs”) tied to images depicting furry renderings of its famous Birkin bag. 

At the same time, the Hermès applications fall neatly in line with an overarching trend among brands – mass-market entities and luxury goods purveyors, alike – that have filed similar applications for registration with the USPTO and other trademark offices, often in an effort to hedge their bets when it comes to the budding rise of the metaverse and new technologies like NFTs. How can we tell that brands are hedging by way of these applications? Look no further than the disparate classes they are filing for, which illustrate, among other things, that they are not quite sure what they are going to do in the metaverse – if anything at all. 

By intentionally casting a wide net, listing goods/services that range from metaverse-centric entertainment services to technologies for crypto payments, companies are both following the lead – and the language – of early-moving parties (such as Nike) and looking to cover their bases for their future endeavors in this realm, even if they do not know exactly what those endeavors will look like. 

Hermès' application for its metaverse trademark
An excerpt from Hermès’ application

It is difficult (for me) to imagine Hermès rolling out a metaverse venture – such as a partnership with platforms like Roblox or Mythical Games’s Blankos Block Party as Burberry and Gucci have done – any time soon. (The company has not even fully embraced e-commerce, announcing just two years ago that it was “going to gradually increase our offer of products online.”) And despite many media reports to the contrary, the applications that the Birkin bag-maker filed, on their own, do not necessarily mean that it has concrete plans to make inroads into the virtual world. Nonetheless, a discussion about some of the takeaways from the Hermès applications is still worthwhile, particularly as at least a couple of points stand out.

Authentication Over the Metaverse

Primarily, it is worth noting that in its application for its name, Hermès includes Class 42, specifically pointing to “authentication, issuance and validation of digital certificates; user authentication services using technology for e-commerce transactions; [and] providing user authentication services using blockchain-based software technology for cryptocurrency transactions,” as among the services it might use its name on. While it is interesting that Hermès (and other companies, such as Dior, Bulgari, Versace, Saint Laurent, Canada Goose, etc.) goes beyond that most commonly-cited metaverse/NFT classes (9, 35, and 41) in its application, it is not necessarily surprising, as it would be far less of a stretch (I think) to see Hermès and other similarly-situated ultra-luxury brands make use of web3 technology more as a way to provide customers with information about their purchases, including on the authentication front, than as part of a metaverse/gaming-centric scenario. 

“The most obvious use case of tokenization,” according to fashion and luxury-focused NFT platform Arianee, comes in the form of digital product passports or digital twins that are tied to “real-world assets,” such as luxury handbags or watches, and that can provide “proof of ownership and authenticity by way of an NFT-centric watermarking system.” The benefits here go further, as such digital twins “follow the [corresponding physical] products throughout their lifespan,” and can capture/store information along the way, including in the event that the physical goods are resold and/or repaired or otherwise modified.  

An example of how NFTs could be used to share information about a car
An example of how NFTs can store information about car sales and service (courtesy of Chainlink)

The use of NFTs in this way makes sense for luxury brands – especially craftsmanship-focused ones that maintain closely-controlled distribution systems and offer up investment-grade offerings – for a number of reasons. For one thing, no shortage of these brands are placing increased weight on repairs as a way to deepening their connection with clients (and potentially, justifying repeated price increases). Management for LVMH, for instance, recently rejected the idea of participating in the resale market and instead, “emphasized efforts to offer repair services for its products.” At the same time, Chanel – which has famously snubbed the secondary market – has filed trademark applications for registration of the past couple of years that shed light on its increasing efforts on the repair front. 

Beyond that, accurate and up-to-date repair records are important, as TFL has reported in the past, in light of the strict stance that many ultra-luxury brands take in terms of the impact that modifications of their goods can have on the authenticity of those products. (As Chanel, for instance, states in connection with its repair/restoration services, “Only the House of CHANEL can offer the appropriate care ritual respecting the authenticity of each creation.” Meanwhile, luxury watchmakers largely treat previously authentic watches that have been modified to include unauthorized parts as inauthentic, which has led to a stream of lawsuits filed by watchmakers and secondary market watch buyers, alike.) 

In theory, careful and consistent tracking of modifications could help to alleviate some concerns that brands/consumers have about the authenticity of altered goods, and thus, help to avoid litigation and/or more accurately determine the value of products from a secondary market perspective. 

And still yet, this information is useful from a warranty perspective, as certain alterations/modifications serve to void warranties (such as for Rolex), while certain conditions of sale are relevant for warranty purposes. Chanel, for example, offers a five-year warranty exclusively for handbags and wallets on chain that have been acquired from its boutiques beginning in April 2021. 

Token-Gated Benefits

The second thing that stands out in Hermès’ filing is the following language – “Creating an online community for registered users to participate in discussions, form virtual communities, and engage in social networking in the field of digital assets” – which also comes by way of Class 42. Is Hermès likely to launch a social media platform for its clients to network? Probably not. However, this seems like it could be a nod to the ability of brands like Hermès to use web3 tech to “reinvent their customer relationship management practices,” according to Arianee, with NFTs, for instance, capable of functioning as digital membership cards that provide consumers with access to “exclusive communities, events, sales, drops, or time-based privileges.” 

Hermès' application for its "Birkin" trademark for use in the metaverse

Such a token-gated approach (by which brands can provide exclusive offers/benefits to token holders) could be especially relevant for companies like Hermès to use in connection with their most coveted offerings. After all, in theory, if an individual has acquired a Birkin or Kelly from an Hermès boutique, it generally means that they have purchased no small number of other Hermès offerings and thus, are the very type of client that the brand would be interested in consistently engaging with. (As distinct from the longstanding narrative about the near-impossibility of “bagging a Birkin,” consumers can get their hands on Hermes’ most prized handbags if they spend enough on the brand’s other offerings (i.e., homewares, ready-to-wear, etc.) and build up a relationship with the brand in the process.)

It is still early days for brands in the web3 arena, making it too early to say with certainty what – exactly – companies (including digitially-hesistant luxury players) will and will not opt to try. Chances are, while companies like Hermès might not jump at the opportunity to create a virtual pop-up in Roblox (save for maybe for things like their beauty ventures), the ultimate outcome for luxury brands in the virtual world will probably consist of a combination of creative products (even if those are merely digital representations of physical goods tied to NFTs that are provided to customers of those physical goods or NFTs tied to product-related editorial content) and uses born from a utility perspective, hence, the reference to authentication services in applications filed by Hermès. 

UPDATED (Sept. 15, 2022): In an interview with the WSJ, Hermès CEO Axel Dumas shed light on the company’s thoughts on the metaverse/NFTs, saying: “Blockchain technology allows you to track your supply chain and add data in a faithful way, which is interesting. NFTs as a product for sale in their own right is a trickier question. We are craftsmen, and we’re not just selling an image. But in 10 years if our clients require NFTs to accompany physical products, so they can have an avatar dressed as they are, we can think about it. I’m not sure we’d ever sell an NFT without a physical product, but in a way it won’t be up to us to decide. It will be the client.” 

Brands ranging from Louis Vuitton, Gucci, and Valentino to Nike and adidas have made headlines over the past year or so after filing applications for registration for use of their famous trademarks in the virtual world, either reflecting existing use or potentially indicating their intent to use such marks in the metaverse or in connection with non-fungible tokens (“NFTs”). Not limited to fashion and luxury names, brands across industries (from KFC to the City of Beverly Hills) have followed the lead set by Nike last year, and rushed to trademark offices around the world to lodge mostly intent-to-use applications – often in an attempt to protect their valuable assets in light of a lack of certainty as to how courts will view their existing “real world” rights (and registrations) and how trademark offices will handle applications that point to web3 technologies. 

Given the increasing number of trademark applications that contain terms “relating to virtual goods and non-fungible tokens” that it has received in recent months, in the United States and internationally, the European Union Intellectual Property Office (“EUIPO”) has provided some initial guidance as to the approach that it is taking for classification purposes. (Trademark applications – and registrations – classify marks by use in specific classes of goods/services, and to date, most brands have filed applications that list use or intended use in Class 9 for “downloadable virtual goods including NFTs,” Class 35 for “retail stores for virtual goods,” and/or Class 41 for “entertainment services in virtual environments.”)

Data from the EUIPO on metaverse trademark applications
EUIPO data as of September 2022

Focusing exclusively on Class 9 (and making no mention of Classes 35 or 41), the EUIPO stated in a June 2022 release that “virtual goods are proper to Class 9 because they are treated as digital content or images.” However, the trademark body claims that “the term virtual goods on its own lacks clarity and precision so must be further specified by stating the content to which the virtual goods relate (e.g. downloadable virtual goods, namely, virtual clothing).” The EUIPO notes that the 12th Edition of the Nice Classification, which will enter into force on January 1, 2023, will incorporate “the term downloadable digital files authenticated by non-fungible tokens in Class 9.”

As for NFTs, in particular, the EUIPO sets out a definition of the relatively novel technology, asserting that NFTs are “treated as unique digital certificates registered in a blockchain, which authenticate digital items but are distinct from those digital items. For the Office, the term non fungible tokens on its own is not acceptable.” (Emphasis courtesy of the EUIPO.) As such, “The type of digital item authenticated by the NFT must be specified.” Still yet, the EUIPO states that “services relating to virtual goods and NFTs will be classified in line with the established principles of classification for services.”

The brief guidance from the EUIPO – which notes that its approach is set out in the 2023 draft Guidelines on which a range of stakeholders have until October 3 to comment – follows swiftly from responses from the U.S. Patent and Trademark Office (“USPTO”) to a number of metaverse-focused applications from Nike and a number of other brands, which provide indications as to how it will deal with similar applications going forward. On the heels of Nike filing a handful of trademark applications with the USPTO for its name, Swoosh logo, “JUST DO IT,” and Jordan marks for use on “downloadable virtual goods” (in Class 9), “retail store services featuring virtual goods” (Class 35), and “entertainment services, namely, providing on-line, non-downloadable virtual footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use in virtual environments” (Class 41), the USPTO issued its first bit of feedback in June. 

In those Office actions, an examining attorney for the USPTO provided some useful information as to how the trademark office will handle the identification of the virtual goods and/or services by stating that she found Nike’s descriptions to be “indefinite” and “unclear.” With this in mind, the examining attorney encouraged Nike to substitute the “clarifying wording in bold print, if accurate” …

Class 9: Downloadable virtual goods, namely, computer programs featuring footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use online in online virtual worlds.

Class 35: Retail store services featuring virtual goods, namely, footwear, clothing, headwear, eyewear sports bags, backpacks, sports equipment, art, toys and accessories for use online in online virtual worlds; on-line retail store services featuring virtual merchandise, namely, footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use online in online virtual worlds.

Class 41: Entertainment services, namely, providing on-line, non-downloadable virtual footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use in virtual environments created for entertainment purposes.

These Office actions are some of the first substantive development since Nike filed its applications for metaverse trademarks last year – and are some of the first examples of the USPTO providing feedback to metaverse-focused applications. They have since been followed by USPTO-issued Office actions that include preliminary registration refusals on the basis of likelihood of confusion for metaverse-focused marks and failure to function. Beyond that, some of the latest guidance from the USPTO centers on issues with specimens that companies have provided in connection with the actual-use applications.

Given the early-mover nature of Nike and its applications (as well as applications lodged by Yuga Labs, the company behind the Bored Ape Yacht Club collection of NFTs, ones from Nike-owned digital fashion and footwear brand RTFKT, etc.), any feedback from the USPTO in response likely inform how other applications will be viewed by the trademark office and will serve as a blueprint for other parties looking to file applications of their own for use of their trademarks in the metaverse.

This article was originally published on July 8, 2022 and has been updated with statistics on the number of NFT/metaverse trademark applications filed with the EUIPO and on Office actions from the USPTO.

Metaverse-focused trademark applications for registration for Gucci and Prada that were filed by unaffiliated individuals – for use on “downloadable virtual goods, namely, computer programs featuring footwear, clothing,” etc., “retail store services featuring [such] virtual goods,” and “entertainment services, namely, providing on-line, non-downloadable virtual footwear, clothing,” etc. – amid a boom in interest in NFTs and the metaverse are unsurprisingly garnering pushback from the U.S. Patent and Trademark Office. In respective Office actions issued this week, examining attorneys for the trademark office preliminarily refused to register the Gucci and Prada word marks on a number of bases. The most obvious: A likelihood of confusion between the applied-for marks and the valid trademarks held by Gucci and Prada.

The Office actions that the USPTO sent to Fenesha Holmes and Reath Mohammed, the individuals who filed applications for the Prada and Gucci marks in November 2021, are not unexpected. As TFL exclusively reported last year, the applications “are unlikely to pose real problems for [Gucci and Prada] in the U.S., given that trademark rights are awarded based on actual use of a mark. It is also worth noting that brands like Gucci, for example – which has partnered with Roblox and put its famous logos on a virtual experience and corresponding goods – are actively amassing trademark rights in lieu of metaverse-specific trademark registrations of their own by virtue by using their marks in these classes of goods/services. And these rights would trump any claimed by the unaffiliated third parties.” 

Gucci metaverse trademark application

Nonetheless, there are a few interesting aspects of the Office actions in response to the squatter-like applications, namely, the examiners’ discussions about the similarity of the marks in the applications filed by Holmes and Mohammed to those held by Gucci and Prada – in particular, the relatedness of the goods/services at issue. 

“Real” World vs. Virtual World Goods and Services

Laying out some relevant points on the likelihood of confusion front (and then looking to the DuPont factors in order to gauge the potential for consumer confusion), the USPTO examiners assert that Trademark Act Section 2(d) “bars registration of an applied-for mark that is so similar to a registered mark that it is likely consumers would be confused, mistaken, or deceived as to the commercial source of the goods and/or services of the parties.” 

The examining attorneys’ discussions about the goods and services are compelling, as while Gucci and Prada have consistently used – and maintain a long list of trademark registrations for – their names, none of those registrations specify virtual goods, retail services for virtual goods and/or entertainment services focused on virtual goods as among the goods/services. (No, this does not really matter given that both Gucci and Prada are actively using their marks on NFTs and/or in the metaverse, and thus, have earned rights via such use, but hold on.)

In light of the two Italian brands’ lack of metaverse/NFT-specific trademark registrations for their word marks, the USPTO examiners look at the classes of goods/services that are listed in their existing registrations. For Gucci, the examiner states that two of its registrations for the Gucci name in Class 35 “use broad wording to describe retail store services featuring clothing, jewelry and handbags.” This language “presumably encompasses all services of the type described, including the narrow[er] retail store services featuring virtual goods in these categories” listed in Holmes’ application, the examiner asserts, noting that “the services of the parties have no restrictions as to nature, type, channels of trade, or classes of purchasers,” and thus, are “presumed to travel in the same channels of trade to the same class of purchasers.” 

Against this background, the examiner finds that the services listed in Holmes’ application and the ones listed in Gucci’s registrations “are legally identical.” This is conclusion is significant, as it would seemingly apply even if Gucci was not actually operating in the virtual world and only had its traditional “retail store services” registrations to rely on. Put another way (and as we already suspected), companies’ trademark rights in/registrations for “real world” goods/services apply to the metaverse. (Note: To date, we have only really seen examples likes this arise in connection with big, very-well-known brands, and it may be safe to assume that less established companies will experience more difficulty navigating this before the USPTO and/or courts.)

The examiner doubles-down on this point, stating that the very nature of the goods at issue – both “virtual goods, such as footwear, clothing, headwear, eye-wear, handbags, jewelry, and watches,” and Gucci’s physical “footwear, clothing, headwear, eye-wear, handbags, jewelry, and watches” – are the kind that “may emanate from a single source, under a single mark,” which weighs in favor of a relatedness of the applicant’s hypothetical virtual Gucci-branded goods and those that are offered up by the Alessandro Michele-helmed fashion company. (I say “hypothetical” because neither of the applicants are making or claiming actual use of the trademark in the metaverse/on virtual goods in their intent-to-use applications.)

Prada metaverse trademark application

And still yet, the relatedness of the goods (and the likelihood of confusion) is bolstered further, according to the examiner, given that “luxury brands, including [Gucci], are selling virtual versions of their physical goods in virtual worlds.” 

“Here, because the marks are identical or virtually identical and the goods and services are closely related, consumers encountering applicant’s goods and services would reasonably presume that these are produced or manufactured by the same source as [Gucci’s] goods and services,” the examining attorney states. As a result, “because consumers would be likely to assume the existence of a connection between the parties, the marks are confusingly similar,” and registration is refused.

In a separate Office action, an examining attorney refused Mohammed’s Prada mark on similar grounds, stating primarily that Prada maintains an array of registrations for “PRADA-formative marks for a variety of real goods that are consistent with [Mohammed’s hypothetical] virtual goods.” At the same time, the USPTO examiner finds that the goods/services listed in Mohammed’s application “are related to [Prada’s] registered goods and/or services” – including physical apparel and accessories, and corresponding retail services – because they are “just virtual versions of the registered goods.”

Moreover, the examiner contends that “the same providers of real fashion goods often provide virtual fashion goods, including the registrant,” and thus, Mohammed’s “goods and/or services are highly related to the registered goods and/or services.” 

In addition to rejecting the applications on likelihood of confusion grounds, the examiners point to a number of other refusal bases, including Trademark Act Section 2(a), which prohibits registration of marks that may “falsely suggest” a connection with an institution. Although Holmes and Mohammed are “not connected with the goods and/or services” provided by Gucci and Prada, the fashion brands are “so well-known that consumers would presume a connection” when one does not exist. The examiners also cite prior pending applications for both “Gucci’ and “Prada” that were filed by counsel for the brands. (Interestingly, none of the brands’ prior-filed applications include any mention of virtual goods/services.)

As for the Gucci application (but interestingly, not the Prada one), the examiner stated that there is also a potential conflict given that Gucci is “primarily merely a surname.”  

While applicants on the receiving end of Office actions have the opportunity to respond in order to explicitly address each refusal and/or requirement and give their applications the opportunity to potentially advance in the registration process, this round is almost certainly the last time we will hear about these applications. In all likelihood, the applications will not provide responses to the Office actions, causing the applications to be deemed abandoned, as it is essentially impossible to imagine arguments and/or evidence that they could provide to overcome the USPTO’s various grounds for refusal.  

THE BOTTOM LINE: USPTO examiners are parlaying well-known brands’ “real” world trademark rights into the metaverse and finding that they are applicable to virtual goods and services – absent registrations for or potentially, even use in the virtual world. This, along with some early opinions from courts, suggests that the metaverse is not so much of a “wild west” when it comes to trademarks as the media has made it out to be, and the law likely is not in need of any major overhauls on this front in order to operate effectively.