NFTs: Basics
Non-fungible tokens (NFTs) are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. The global NFT market size is expected to grow from USD 3.0 billion in 2022 to USD 13.6 billion by 2027, at a Compound Annual Growth Rate (CAGR) of 35.0% from 2022 to 2027. According to the recent report published by Morgan Stanely, Luxury-branded non-fungible tokens could become a $56 billion market by 2030 and could see "dramatically" increased demand thanks to the metaverse.
As the numbers surrounding digital assets in the virtual worlds continue to climb, more and more companies are turning their attention to this new and promising marketplace. The market value of Metaverse is estimated to surpass $947.1 billion by 2030 [1], and as such, both established and new brands are paying close attention to the latest trends and developments in this area. The thrilling aspects of NFTs have gradually captured the attention of a wide spectrum of celebrities, including Kanye West, Snoop Dogg, Rihanna, and, most recently, Miley Cyrus Sports leagues are also joining in, with opportunities for purchasing NFT trading cards, or attending the next generation of fantasy league events. Top-performing athletes such as are not missing an opportunity to further develop their brands by offering fans new ways to connect with them through ownership of unique digital assets.
A wide range of industries is eager to explore the benefits offered by developing virtual spaces. Internationally renowned brands from Gucci and L’Oreal to Mcdonald's and Walmart are expanding their trademark portfolio to cover virtual goods and services. Recently, prominent U.S. car company Ford appeared in the headlines after coming forward with its own trademark applications connected to NFTs.
Trademark Application
In September 2022, the Ford company filed 19 new trademark applications for all of its major brands. According to the USPTO intellectual property attorney Mike Kondoudis, the applications cover:
Virtual automobiles, SUVs, trucks and vans, land vehicle parts and accessories, and clothing
Online retail store services featuring Non-fungible tokens (NFTs) and digital collectibles
The trademark applications include terms such as the FORD, F-150 LIGHTNING, MUSTANG, LIGHTNING, MUSTANG MACH-E, BRONCO, TRANSIT, ESCAPE, etc. Once successfully registered, the group will be able to offer NFTs through a dedicated online marketplace and sell virtual vehicles and clothing under its brands. Although Ford has not revealed any of its plans for the new trademarks as of right now, it is evident that the company is preparing to dive deeper into the metaverse and NFT or Web3 ecosystem.
Ford is not the first car brand to move into the NFT world in the past few years. Lamborghini, the Italian luxury brand, launched its limited series NFT collection last year, featuring a 3D Composable material that has travelled into space. Besides Ford Motor Company and Lamborghini, Mercedes-Benz, Hyundai, and Bentley have all put forward their own unique NFT collections.
While more and more brands are expanding their trademark portfolio to cover digital assets, the IP laws will have to find ways to adapt to upcoming challenges and legal issues surrounding registration of virtual goods and services. You can read more about Trademark Law issues surrounding NFTs in our article Trademark perspective on NFTs: New, Fabled and Thrilling. While we can certainly expect more companies getting involved with digital assets, it goes without saying that creators should consult with a trademark attorney for guidance on navigating the ever-changing digital space. To learn more about trademark options for NFTs and other digital assets, contact an experienced trademark attorney today.
