By Despina Lyons, Trade Mark Attorney & Dalinee Bangaroo, Senior Trade Marks Manager 

21 November 2023

As you may be aware, as part of the trade mark application process, an applicant is required to specify the goods and services in respect of which they will use their trade mark. Goods and services are divided into 45 different classes in what is known as the “Nice Classification System”. A Trade Mark Examiner then has the final say on whether goods and services have been classified in the correct class, when they assess the application.

For traditional goods and services, the decision is very easy, but less so with emerging digital technologies.

For example, nail polish fits easily within class 3 which covers non-medicated cosmetics and beautician services falls within class 44 which covers beauty care services. It is very easy to correctly classify traditional goods and services because they generally fit nicely within the 45 classes of goods and services. However, as technology changes and evolves, the 45 classes of goods and services have largely stayed the same. So, if you will use your trade mark in the metaverse, in relation to a digital nail polish – is class 3 the correct class? Or class 44? Or is it a software class (class 9 or class 42)?

What now?

IP Australia recently released a new trade mark classification guidance note which can be accessed here which focuses on the classification of emerging technologies. This guidance note is very welcomed and will be very useful for users to correctly classify goods and services from emerging technologies such as virtual goods, metaverse, NFTs and blockchain. In line with changing technologies, IP Australia has noticed an increase in trade mark applications relating to these emerging technologies which has driven the need for this guidance note.

It is clear that trade mark applications are being filed incorrectly in relation to the above issues, at an increasing rate, so IP Australia has decided to act now. If trade mark applications are filed incorrectly Trade Mark Examiners issue Adverse Examination Reports and give the applicants a chance to correctly classify the goods and services. If the correct class is not already included in the relevant application, the applicant will need to pay additional fees. Classification errors are usually straightforward to correct and IP Australia, by issuing this guidance, will assist parties to include the correct classes in their application from the outset, thus reducing unnecessary Adverse Examination Reports and application costs.

Below we take a closer look at IP Australia’s guidance in respect of each of the goods and services and how to classify them properly.

Virtual Goods

Virtual goods are goods which are used in online virtual environments. IP Australia notes that “virtual goods” fit within class 9 because they consist essentially of data. However, broad claims such as “virtual goods” or “downloadable goods” lack specificity and will not be accepted. The exact nature of the virtual goods must be specified. For example, software, image files, music or clothing. An acceptable claim in class 9 for virtual goods is “downloadable virtual clothing”. However, services relating to virtual goods will fall into other classes depending on the nature of the services. For example, retail services in relation to virtual goods will fall into class 35 which is the traditional class which covers retail services. An acceptable service in this class related to virtual goods is “online retail services for downloadable virtual clothing”.

Metaverse and virtual environments

As technology changes, an increasing number of services are now being offered virtually. IP Australia notes that applicants use varying terminology to describe virtual online environments such as “metaverse”, “virtual environments” and “web3”. IP Australia notes that while they will accept the terms “metaverse” and “web3”, the term “virtual environments” is preferred. Classification of services in a virtual environment will depend on the impact of the service in the real world. IP Australia has provided a number of examples to assist users when selecting a class for services provided in a virtual environment. For example, education services are classified in class 41 whether they are provided in person or in a virtual environment. Similarly, banking services where funds are sent and received are still classified in class 36 which covers traditional banking services since the real-world impact is the same. Where the real-world impact differs, consideration is given to the nature of the services. For example, a virtual restaurant does not provide actual food or drink products. Accordingly, this would be classified in class 41 as an entertainment service. Similarly, a travel simulation in a virtual environment does not involve any physical travel or transportation services and is correctly classified in class 41 as an entertainment service and not class 39 as a travel service.

NFTs

An NFT (non-fungible token) acts as a digital certificate used to record ownership of an item, such as a digital artwork or a collectible. An NFT is not a good or service but a means of certification. Accordingly, the term NFT on its own is not sufficiently specific and will not be accepted as part of a goods and services specification by IP Australia. In an application, the applicant must specify the exact nature of the goods or services being authenticated by the NFT. IP Australia provides the following examples in their guidance note:

• Class 9: downloadable digital image files authenticated by non-fungible tokens [NFTs]
• Class 9: downloadable digital music files authenticated by non-fungible tokens [NFTs]
• Class 35: retail services relating to downloadable digital image files authenticated by non-fungible tokens [NFTs]
• Class 42: providing online non-downloadable computer software for minting non-fungible tokens [NFTs]

NFTs are not limited to digital works only and can also be used to authenticate real-world goods such as artwork or fashion items. Where the NFT classifies a real-world, physical good, it will be classified in the class which covers the real-world good. For example, if an NFT is used to record ownership of clothing, it will be classified in class 25, such as “clothing authenticated by non-fungible tokens [NFTs]”.

Blockchain

Blockchain technology is commonly used in relation to cryptocurrency, finance, gaming and digital authentication. A claim for “blockchain technology” on its own is not sufficiently specific and it will not be accepted as part of a goods and services specification by IP Australia. The exact application of the blockchain technology must be specified. IP Australia has provided the following as examples for acceptable claims regarding blockchain technology:

• Class 9: downloadable computer software for blockchain technology
• Class 36: electronic funds transfer provided via blockchain technology
• Class 42: computer programming of smart contracts on a blockchain

While IP Australia’s latest guidance is very welcome and does provide clarification on a number of emerging technologies, drafting a specification of goods and services and deciding the correct class is still an involved exercise. If you need any assistance with drafting your trade mark application, we are always able to assist you with this process.

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