News & Insights

After much anticipation and calls for more clarity following the emergence of virtual environments, IP Australia has published a guide, effective immediately, on the classification of goods and services relating to emerging technologies.

The guide consists of four categories:

1. virtual goods;
2. metaverse and virtual environments;
3. non-fungible tokens (NFTs); and
4. blockchain.

The guide is a vital resource for any trade mark attorney, IP Lawyer, or entity seeking to secure trade mark rights in this space.  It sets out IP Australia’s practice on the classification of these new technologies and confirms this position will be consistent with both the Nice Classification (to be issued in 2024) and the position of many leading overseas IP offices such as USPTO, UKIPO, and EUIPO.

In determining how to classify the goods and services in these emerging technologies for Australian trade mark applications, IP Australia has aligned the classifications with their impact in the real world.

“A virtual restaurant appearing in an online environment doesn’t provide physical food because the avatar is consuming virtual food. This service would therefore be classified in Class 41 as an entertainment service, rather than a Class 43 restaurant service.”

What is a trade mark classification?

Trade marks are essential for distinguishing one entity’s goods or services from those of another. They are registered in relation to goods or services selected by the applicant at the time of filing the trade mark application.  The trade mark rights only extend to these goods or services and closely related goods or services.  Accordingly, it is vital to ensure the correct description of goods or services is selected, otherwise further costs can be incurred or worse the application can be rejected!

How is this guide helpful?

There has long been debate amongst IP Professionals concerning whether existing trade mark protection for real world goods is sufficient to cover digital goods of the same description (e.g. does a trade mark protected in Class 25 for Clothing, footwear, and headwear protect downloadable virtual clothing for use by Avatars).

This guide confirms that protection should be sought for the digital goods (and related digital services) themselves as they are being considered as separate to the real-world equivalents. Importantly:

1. Virtual goods are digital objects used in online virtual environments … Correctly classified in class 9, provided the description of the goods is specific e.g. virtual goods will not be accepted, but downloadable virtual clothing will be accepted.
   Similarly, services relating to virtual goods will fall into other classes depending on the nature of the service (e.g. Class 35: online retail services for downloadable virtual clothing).
   
2. Metaverse platforms and virtual environments are classified according to what service is provided in relation to them (e.g. entertainment services provided in virtual environments is correctly classified in Class 41 and hosting via virtual environments is correctly classified in Class 42).
3. NFTs are not considered goods or services but a means of certification. Accordingly, NFTs alone are not an acceptable claim, but they need to specify exactly what is being authenticated and will be classified according to that good/service (e.g. downloadable digital image files authenticated by non-fungible tokens in Class 9, clothing authenticated by non-fungible tokens in Class 25, or retail services relating to downloadable digital image files authenticated by non-fungible tokens in Class 35).
4. Blockchain is a ledger or distributed database that records encrypted blocks of data. Like NFTs, a claim for Blockchain simpliciter is not acceptable. To be correctly classified “blockchain technology is a feature of goods or the means through which services are provided”(e.g. electronic funds transfer provided via blockchain technology in class 36).

Key Takeaways

• Evolve with emerging technologies
  When categorising trade marks, consider the technology’s fundamental characteristics and usefulness.
• Be specific rather than ambiguous
  Ensure the actual goods/services are identified to avoid rejection of your application and to ensure that you can enforce your trade mark properly.
• Consider the impact of a virtual service in the real world
  Traveling simulations in a virtual setting do not entail actual transportation, rather it is entertainment. This is to be contrasted with actual transportation of goods in the real world.

Macpherson Kelley are experts in trade mark classification

If you require assistance with securing appropriate protection for your trade marks in Australia, New Zealand or overseas, Macpherson Kelley’s IP team are experts in preparing descriptions that will see your trade marks correctly classified. Contact one of our experts if you wish to secure trade mark rights with a greater level of certainty and guidance.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.