NFTs
INTA: NFTs must be protected as ‘commodities’ in Bored Ape case | Trademarks
Association archived friend brief to Ninth Circuit in support of plaintiff Yuga Labs | The Lanham Act does not limit the definition of goods and services, INTA said.
Non-fungible tokens (NFTs) must be considered “goods” under the Lanham Act, in accordance with the International Trademark Association (INTA), which stated that this approach would maintain the protection of trademarks registered on digital platforms, in line with the expectations of consumers and brand owners.
INTA provided its opinion in an amicus brief filed yesterday with the U.S. Court of Appeals for the Ninth Circuit, regarding Yuga Lab’s allegations that two defendants made millions of dollars from counterfeit versions of its ‘Bored Ape Yacht Club’ NFTs.
In October 2023, a California federal judge ordered the defendants pay more than $1.5 million in damages for their copies of Yuga Labs NFTs, which they said was an art project aimed at criticizing allegedly racist images in Bored Apes tokens.
The case continued this year, with the California district court imposing a $9 million fine on the defendants in February, covering damages, fees and costs, and the defendants filing an appeal.
Opposing Yuga Labs’ motion for summary judgment on its false designation of origin claim, the defendants argued that the NFTs were ineligible for trademark protection because they were intangible goods.
They said the US Patent and Trademark Office rejected several of Yuga Labs’ applications to register trademarks because NFTs are not traded goods, and argued that the Supreme Court required tangibility for trademark protection in the case Dastar v Twentieth Century Fox (2003 ).
‘No limit on definition’ in the Lanham Act
INTA urged the court to avoid an “excessive extension of restricted participation” in Dastar, which it said dealt with communicative content rather than communicative products.
The association argued that the Lanham Act refers to the registration and use of trademarks in connection with any goods or services, without limiting definition – which therefore included NFTs.
The law focuses on consumer perception and the meaning of trademarks to consumers, INTA said, also pointing to the qualities that digital goods share with tangible goods, as noted by the district court.
“In summary, the district court here correctly held that NFTs, if understood as digital goods comprising a set of tokens that reference underlying digital assets through token metadata, are goods for purposes of the Lanham Act,” INTA told the court.
It stated that this approach would advocate for the protection of trademarks in new digital ecosystems in a way that benefits consumers and brands.