Blockchain and NFTs
The blockchain technology, which was introduced to our lives with an article titled “Bitcoin: A Peer-to-Peer Electronic Cash System” published by an individual or individuals using the pseudonym Satoshi Nakamato in 2008, has become widely used in many different fields today.
Blockchain can be defined as a decentralized, distributed, shared, encrypted system that verifies and stores all transactions among users who use the system, as an irreversible and immutable data repository.
Although blockchain technology is primarily associated with the first and most popular cryptocurrency, “bitcoin,” it has since been used in non-financial sectors. Today, blockchain technology is used in many different fields, such as digital identity verification and security, healthcare services, banking transactions, logistics, and insurance, in addition to financial applications such as cryptocurrencies. It makes problem-solving easier and enables the authentication of documents and identity information (like a notary).
This technology, which first entered our lives with cryptocurrencies, continues to appear in different forms with new crypto assets such as smart contracts, DAOs (Decentralized Autonomous Organizations) and NFTs (Non-Fungible Tokens).
NFTs are a type of crypto asset that uses blockchain technology to uniquely identify digital assets. The biggest difference between NFTs and cryptocurrencies is that NFTs are unique and irreplaceable crypto assets. As WIPO states, “Anything that can be digitized can be turned into an NFT.” Due to these features, the popularity of NFTs has increased recently, and many famous artists have started selling their digital assets as NFTs. Today, there are many different areas of use of NFTs, such as visual art works, music works, games, and real-life NFTs, whose number is increasing.
As the popularity of NFTs increases, many new initiatives and platforms have emerged in this area, and of course, many disputes that reflect on the legal world have also arisen. At this point, the question of the necessity of registering NFTs for trademark protection and how to benefit from trademark protection arises. This is undoubtedly a very new development for the legal world, and these questions will have legal reflections in our country as well. Therefore, this issue needs to be addressed separately by legal professionals, as it needs to be taken out of the “grey” area.
Nice Classification
The Nice Classification, established under the World Intellectual Property Organization (WIPO), is a system used worldwide for the classification of commercial trademarks. This system, also known as the “Nice Classification,” helps to classify product and service categories more easily and consistently, making it easier to classify trademark applications. This system is extremely important for the protection, registration, and monitoring of commercial trademarks.
The system contains 45 classes allocated for products from 1 to 34 and services from 35 to 45. For instance, class 25 is allocated for “Clothing, footwear and headgear” products, while class 35 is allocated for “Advertising and business management” services.
The issue of which goods or services class NFTs should be classified under according to the Nice Classification has been a subject of debate in the legal world when NFTs are intended to provide trademark registration protection. In the guidelines prepared by the European Union Intellectual Property Office (EUIPO) on this topic, they mentioned NFTs and stated that they should be classified under class 9 in the Nice Classification.
WIPO included blockchain and NFTs in the scope of the Nice Classification of Goods and Services
After all these legal debates, WIPO has announced the new 12th classification list for the International Classification of Goods and Services for the Purposes of the Registration of Marks under the Nice Classification, which came into effect on January 1, 2023, and includes blockchain and NFTs.
In Class 9:
New goods: “downloadable digital files authenticated by non-fungible tokens [NFTs]”, “computer network routers”, “portable document scanners”, “cases for smartphones incorporating a keyboard”.
Amendment of the goods: “downloadable computer software for managing cyptocurrency transactions using blockchain technology” to “downloadable computer software for managing crypto asset transactions using blockchain technology.”
With the new classification, NFTs and blockchain products will now be included in class 9, and trademark protection can be provided for these products.
In Conclusion
NFTs, due to their inherent characteristics, provide a unique way to identify and record digital assets, making it difficult to create fake copies and helping owners protect their digital assets from unauthorized use. However, as NFTs become more widespread and their importance grows among individuals and entities, they alone are insufficient to protect the ownership or copyright of digital assets. Therefore, it is necessary to have full knowledge of the ownership and copyright of digital assets and to take other legal measures to protect them from various attacks. At this point, taking advantage of trademark protection for NFTs is of great importance.
The issue of which strategies should be followed for trademark protection of NFTs is a more in-depth and legally evaluated area. However, this development at WIPO will undoubtedly provide guidance for trademark rights holders in Turkey, as well as globally, on how to develop strategies in this technology field.
References
Balıkçı, E. (2021). Cryptocurrencies in Terms of Being Subject to Lawsuits and Proceedings, https://dergipark.org.tr/en/download/article-file/2053975 , 30.03.2023
Bilgili, F., Cengil, M.F. (2022). Blockchain and Cryptocurrency Law. Bursa: Dora Publishing
Erşin, A. (2022). NFT Technology and Information Law, Law and Information Journal, https://hukukvebilisim.org/nft-teknolojisi-ve-bilisim-hukuku , 30.03.2023
The New Edition Of The Nice Classification Will Include Blockchain-related Goods And Service, (2022). https://intellectualpropertyplanet.wordpress.com/2022/11/16/the-new-edition-of-the-nice-classification-will-include-blockchain-related-goods-and-services , 30.03.2023
Ünal, G. and Uluyol, Ç. (2020). Blockchain Technology Literature Article, Journal of Information Technologies, https://dergipark.org.tr/en/download/article-file/1081395 , 30.03.2023
Yılmaz, E. (2022). Nice Classification of Blockchain and NFTs. Law and Information Journal, https://hukukvebilisim.org/blockchain-ve-nftlerin-nice-siniflandirmasi , 29.03.2023
https://www.wipo.int/classifications/nice/nclpub/en/fr , 30.03.2023
https://www.turkpatent.gov.tr/marka-nice-siniflandirma , 30.03.2023