The tech space continues to deliver an almost unending stream of shakeups and disruption. This is nowhere felt more keenly than in the global financial industry. The rapid emergence of highly desirable brands and products in these areas of emerging finance; blockchain – DLT (Distributed Ledger Technology), cryptocurrencies, non-fungible tokens (NFTs) and several other digital assets, have birthed the need for protection from potential trademark infringement.
The 12th edition of the Nice Classification expands and amends existing classes of protection in the Nice Classification to include amongst others, blockchain technologies and related products and services. The 12th edition takes effect from January 1, 2023.
This article highlights the new goods and services introduced by the 12th edition of the Nice Classification of Trademarks (‘marks’); particularly, the suite of Financial Technology (FinTech) innovations noted above. This article also discusses blockchain technology and its role in the protection of these digital assets.
Nice Classification of Trademarks
The Nice Classification (NCL) is an international system for classifying goods and services, for the registration of trademarks. The NCL is the offspring of the Nice Agreement executed after the Nice Diplomatic Conference of 15th June 1957. This agreement has been variously revised updated and amended over the ensuing decades. Since its inception, a new edition of the NCL has been published every five years. However, in more contemporary times, a new edition has been published annually. There are currently twelve (12) editions of the NCL, with the 12th edition, the crux of this paper, taking effect from the 1st day of January 2023.
The updated Classification includes goods and services that have been moved between various classes, an updated alphabetical list and the introduction of explanatory notes – all implemented by a Committee of Experts set up pursuant to the Nice Agreement. This edition is framed in a total of 45 Classes (34 for the description of goods and 11 for the description of services). Most notable for our purposes, it features for the first time, classes of protection for FinTech products.
Blockchain is our saviour as it introduces extreme efficiency to the entire intellectual property ecosystem.
Blockchain technology & its impeccable value to trademark protection
Blockchain simply means an immutable ledger technology that stores and records data. Put differently, it is a distributed ledger technology (DLT), that records and tracks assets or anything of value across a network spread around multiple locations and entities. This creates a sort of encrypted worldwide spider web of connected computers that enables its users to maintain and control the use of their own data securely, as the same cannot be altered or manipulated due to the immutability that blockchain provides.
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Blockchain records every transaction that has ever taken place on the network and clearly shows the movement of any asset therein. In other words, once a transaction has been approved and added to a distributed ledger technology, the information cannot be altered or receded.
While Intellectual Property on a broad perspective refers to the rights that flow to a natural or corporate person as a result of intellectual activity in the industrial, scientific, literary and artistic space, trademark specifically refers to the intellectual property right that protects a distinct sign, symbol or character that establishes the peculiarity of a particular product or service.
The importance of accurate data cannot be overemphasized to all actors in the intellectual property ecosystem. Blockchain technology, therefore, becomes increasingly important in the intellectual property value chain as it offers a unique, efficient, transparent and secure means of handling, maintaining and storing data on an immutable ledger. Blockchain comes to rescue us from the traditional record-keeping systems of intellectual property data, which can be vulnerable to fraud and is obviously of limited transparency. Blockchain is our saviour as it introduces extreme efficiency to the entire intellectual property ecosystem.
A tamper-proof, clear evidence of all the stages of trademark registrations, the lifespan and other intellectual property portfolios can be made transparent with blockchain technology.
Securitization of trademarks and other intellectual property assets can also be effectively carried out by a right holder using Tokenization.
The deployment of public or interoperable blockchain systems could facilitate collaboration among intellectual property offices, globally. This will go a long way in streamlining the administration of international intellectual property systems.
The licensing and assignment of registered trademarks and other intellectual property rights may be efficiently achieved by the use of smart contracts which are enabled by blockchain technology. Smart contracts may reduce litigation as the issue of parole transactions is checked. This also brings efficiency into the system as it automatically terminates contracts once a breach of the same is detected by the software.
The unauthorized use of digital assets by third parties can easily be established in dispute resolution platforms as blockchain technologies offer transparent and reliable data on all infringements. Counterfeiting and piracy may be considerably checked by blockchain technology.
The benefits of blockchain solutions to intellectual property are inestimable. Realizing this fact, the member states of the World Intellectual Property Organization (WIPO) at its sixth session held in 2018, established the Blockchain Task Force under the Committee on WIPO Standards (CWS) to conduct research on how the intellectual property ecosystem can leverage on the efficiencies offered by blockchain technology.
The need to protect these emerging Fintech innovations
The registrations of these fintech innovations offer a broad range of advantages some of which includes:
Legal protection: Trademark protection is not automatic but subject to registration of same. Therefore, for owners of these cryptocurrencies, NFT’s and other digital assets operated on blockchain technologies to enjoy the protection of the law, the same must be registered. Registration of these assets prevents any other natural corporate entity from the registering the same or something similar. This bestows a right to damages on the right holder for any infringement or unauthorized use whatsoever. Put differently, it gives the registered right holder an exclusive right of use and injunctions can be used to check any infringements.
Revenue Creation: The registration of these assets increases their value over time. For instance, a registered NFT may grow as the brand builds reputation and trust over time, consequently increasing its market value as the same is protected from piracy.
Clearly stands out as an asset: There are several emerging and emerged digital assets in the marketplace. It, therefore, becomes pertinent for proprietors of these assets to register them as trademarks so as to clearly distinguish its assets from the litany of similar digital assets in the marketplace.
Assignment: The trademark in a registered digital asset can be assigned or licensed to third parties for monetary consideration.
The NCL trademarks: 12th edition & blockchain technologies
The registration of trademarks under the correct classes of products and services is of critical importance to Trademark Protection. The 12th edition of the Nice Classification introduces several interesting classes of trademarks covering a variety of subject matter that are indicative of the post-pandemic period into which the world is gradually transitioning; from medical and wellness equipment to real estate services. It also creates classes of registration (in Class 9) to accommodate the protection of marks associated with cryptocurrencies, NFT’s and other related virtual assets & portfolios.
In Class 9: The NCL’s Class 9 registration provides for: “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 were done to introduce: “downloadable computer software for managing cryptocurrency transactions using blockchain technology” to “downloadable computer software for managing crypto asset transactions using blockchain technology”.
In Class 42: Services relating to “information technology (IT) consultancy” was amended to “information technology (IT) support services (troubleshooting of software)”. The amendment also changed “cryptocurrency mining/crypto mining” to “mining of crypto assets / crypto mining”. It also introduced “archaeological excavation” as a new service.
Classes 9 and 42 of the NCL have been amended to specifically cover and adequately protect brand owners with emerging virtual assets. Producers of goods and services in these classes would be well guided to take steps to register their products to enjoy adequate protection of their IP rights in virtual marketplaces. Speedy registration of these assets will prevent third parties from either trying to obtain undue financial benefits, or from seeking protection for the same goods or services in those same classes.
Conclusion
The amendment of the NCL classifications is in tandem with current technological realities particularly relating to the virtual marketplace. Individuals and/or corporate entities who own emerging digital products (cryptocurrencies and NFTs) and platforms, would benefit from protecting themselves against possible infringement in the virtual world.
The development of a robust policy around immediate steps to be taken upon the detection of possible infringement is highly recommended for right holders and this can be achieved with the assistance of an Intellectual Property attorney.
Michael Onyishi is an Associate at Perchstone & Graeys
