Emerging technologies such as Artificial Intelligence (AI), Virtual goods and the continued use of Blockchain are playing an increasingly important role in Australian businesses. Amidst this constant change, is important that businesses can remain confident that their intellectual property (IP) rights remain protected through the appropriate classification of trademarks.
Fortunately for Australian businesses, IP Australia has released guidance that clearly stipulates how businesses can ensure their trademarks are accurately classified. The release of this guidance marks an appropriate time for businesses to assess whether their IP rights are protected by the current classification of trademarks, or whether steps need to be taken to update their registrations.
The guidance provided by IP Australia is split into four categories:
1. Virtual goods:
IP Australia define virtual goods as “digital objects used in online virtual environments”. When applying for a trademark, businesses should specify the exact nature of the virtual goods that their business provides (such as ‘music files’, ‘video streaming’, or ‘downloadable virtual clothing’), to ensure that the goods are accurately classified.
2. Metaverse and virtual environments:
On the one hand, businesses may offer online services which have the same real-world impact whether they are provided online or in-person. Examples of this include banking services (where real funds can either be transferred virtually or in physical cash), or education services (where services can be offered online or in-person). In such cases, the trademarks of the virtual service will be classified “in the same way as its real-world counterpart”, because the real-world outcome is not tied to whether the service is provided online or in-person.
On the other hand, if the virtual environment has a different impact in the real world than it would if it were offered in-person, it will be classified under a different class of trademark. For example, a virtual restaurant within a platform (perhaps in Decentraland), where characters consume virtual food would not be classified under the same trademark class as a physical restaurant because the real-world impact of each service is clearly different.
3. Non-fungible tokens (NFTs)
Claims for NFTs must specify the exact nature of the goods and services that the NFT encapsulates. For example, “downloadable digital music files authenticated by NFTs” and “retail service relating to downloadable digital image files authenticated by NFTs” are examples of applications with appropriate levels of specificity. A claim simply for “NFT” is not acceptable under the new guidelines.
4. Blockchain
Similarly to their guidance on NFT-related applications, IP Australia emphasises that claims for goods/services recorded through blockchain technology must be specific and descriptive as to what the features of those goods/services are, so as to ensure accurate classification of the trademark.
The guidance from IP Australia is likely to affect Australian businesses for whom technology plays an important role. Whether your business buys or sells products online, transfers funds over the internet, engages in smart-contracts via the Blockchain, or plans on incorporating AI into your business model, it is important to be aware of the new guidance that may affect your IP rights. The risk that businesses face by incorporating emerging technologies into their products is the possibility that their products (which have virtual and real-world impacts) are registered in a category which does not protect the virtual class of that product, meaning that competitors are able to use similar trademarks in those categories. As a solution, now is an appropriate time to ensure that your products are registered in the appropriate categories, so you can feel confident that you’re the value of your business’ IP is protected in all classes.
If you are unsure how the updated guidelines from IP Australia affect your business, we encourage you to contact the Business & Commercial team on 02 6274 0999. .