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Comment Draft: Not for Citation or Republication
Trademarks, NFTs, and the Law of the Metaverse
by Michael D. Murray
1
I. NFTs and the Metaverse Economy
The metaverse is a concept for a cyberspace realm that will be built on the existing
infrastructure of the internet using the emerging technologies of blockchains, cryptocurrency,
and non-fungible tokens (NFTs).
2
In the metaverse, people and entities and various forms of
algorithms and artificial intelligence will interact in extended reality, engage in education,
business, games, sports, and entertainment, buy and sell “real world” and “in the metaverse”
goods and services, and otherwise get into legal disputes just like IRL (“In Real Life”) persons
and entities.
3
It is anticipated that the future metaverse could accommodate virtually every
kind of legitimate or criminal human activity, and so legal problems could arise from the
metaverse relating to a huge variety of activities.
4
Short of crimes that involve actual bodily
harm, the list of legal concerns might be endless.
The crypto community of blockchains, cryptocurrency, and non-fungible tokens (NFTs)
appears in all ways to be contributing to the development of the metaverse.
5
Right now, the
metaverse is an omniverse economy where physical goods and digital items are traded in the
same marketplaces, sometimes with a physical “real world” good having a digital twin in the
metaverse, and both fiat and crypto currencies flow into and out of the commerce of these
marketplaces.
6
Brands are becoming as active in the development of the metaverse economy
as they are in the physical world.
7
1
Michael D. Murray is the Spears Gilbert Associate Professor of Law at the University of Kentucky, J. David
Rosenberg College of Law, and he is the principal investigator of the Blockchain, Cryptocurrency, NFT, and
Metaverse Law Project at the University of Kentucky. Professor Murray thanks Dean Mary Davis and the University
of Kentucky, J. David Rosenberg College of Law faculty research grant program for their ongoing support of his
research.
2
Janna Anderson & Lee Rainie, The metaverse will fully emerge as its advocates predict, Pew Research Center - The
Metaverse in 2040 (Jun. 30, 2022), https://www.pewresearch.org/internet/2022/06/30/the-metaverse-will-fully-
emerge-as-its-advocates-predict/ (the metaverse will be an evolutionary development from the current
cyberspace and crypto community).
3
Michael D. Murray, Ready Lawyer One: Lawyering in the Metaverse, 86(3) KBA BENCH & BAR 40, 40 (2022).
4
Id.
5
Anderson & Rainie, supra note 2.
6
See Beth Kindig, Nvidia On How The Metaverse Can Overtake The Current Economy, Forbes (Feb. 18, 2022),
https://www.forbes.com/sites/bethkindig/2022/02/18/nvidia-on-how-the-metaverse-can-overtake-the-current-
economy/; Boson Protocol, Open Metaverse Commerce: Why Is The Metaverse Economy Different From The Real
World?, Medium (Sep. 28, 2021), https://medium.com/bosonprotocol/open-metaverse-commerce-why-is-the-
metaverse-economy-different-from-the-real-world-88dde353bcf2.
7
See Janet Balis, How Brands Can Enter the Metaverse, Harv. Bus. Rev. (Jan. 03, 2022),
https://hbr.org/2022/01/how-brands-can-enter-the-metaverse.
2 Trademarks, NFTs, and the Law of the Metaverse
Comment Draft: Not for Citation or Republication
NFTs are currently used in the metaverse as collectibles, access keys, investments,
deeds of ownership, voting and governance tokens for decentralized autonomous organizations
(DAOs), and facilitators of services or experiences.
8
In this robust application, NFTs have
exposed gaps in the crypto community’s knowledge of trademarks and other unfair
competition laws regulating the commerce of the metaverse.
The law of the metaverse is not a futurist vision or an oxymoron. The subjects of this
Article are very real and very much in the here and now. At present many NFT creators have
moved at full speed to mint projects that launched them into controversies over the use of
trademarks, service marks, and trade dress, and triggered exposure to liability under the
related unfair competition concepts of false endorsement and false designation of origin. To
sort out this situation, the crypto community will need to look to the law that governs the
metaverse. While at certain times the cyberspace and proto-metaverse community appears to
be lawless—the Wild West, a prelaw society
9
—these observations run aground on the legal
system of the United States, which is ready, willing, and well-prepared to adjudicate civil and
criminal actions arising from fraud, infringement, and other personal and intellectual property
injuries.
This Article discusses the early encounters of NFTs, trademarks, and the legal system. I
have previously written a three-part guide on NFTs and copyright law.
10
This work will examine
the areas where NFT creators are getting into or are likely to get into trouble with the law and
policy of trademark infringement, trademark dilution, and the related legal causes of action of
false endorsement and false designation of origin. United States law is being applied in lawsuits
that already are being adjudicated in the real world concerning subject matter that exists only
in cyberspace, the pre-cursor to the metaverse.
II. Basic background on Trademark law
Property as a concept in the law means the right to own and control something and to
exclude others from using and controlling it. This concept often is expressed as the rights owner
having a monopoly over the thing that is owned. When the term “intellectual” is added to the
concept of property, it means that the thing protected is a non-tangible item used, devised,
imagined, developed, or invented by a person or group, and that thing has value deserving of
8
Georgia Weston, NFTs And Their Role In The “Metaverse”, 101 Blockchains (Dec. 24, 2021),
https://101blockchains.com/nfts-and-metaverse/.
9
E.g., Laurie Clarke, Can we create a moral metaverse?, The Guardian, May 14, 2022, 10:00 EDT,
https://www.theguardian.com/technology/2022/may/14/can-we-create-a-moral-metaverse.
10
Michael D. Murray, NFT Ownership and Copyrights (Jul. 2, 2022), https://ssrn.com/abstract=4152468; Michael D.
Murray, Transfers and Licensing of Copyrights to NFT Purchasers (Jul. 2, 2022), https://ssrn.com/abstract=4152475;
Michael D. Murray, Generative and AI Authored Artworks and Copyright Law (Jul. 2, 2022),
https://ssrn.com/abstract=4152484.
Trademarks, NFTs, and the Law of the Metaverse 3
Comment Draft: Not for Citation or Republication
protection in the law. Trademarks are one form of intellectual property, the others being
copyrights, patents, right of publicity, moral rights, economic rights, and trade secrets.
11
Trademark is the right to own and exclusively control the use
of a signifier of goods or services in commerce.
Crypto- and blockchain-minded people have a strong tendency to equate the term
intellectual property with copyrights,
12
but that is incorrect. This error is similar to the tendency
of technological and scientific natives to equate IP with patent law.
13
Copyrights, trademarks,
and patents are separate intellectual property rights and they are very different from each
other.
A. The Public Policy behind Trademarks
The reason and justification for the existence and protection of trademarks is to prevent
consumer confusion about the origin and quality of the goods and services in commerce.
14
The
rationale for trademark law is not specifically tied to the protection of an intellectual creation
as in copyright or patent law, but rather it is specifically tied to the protection of consumers
from confusion when purchasing and consuming goods and services in commerce.
15
The federal
government’s trademark power is not directly supported by the United States Constitution’s
Intellectual Property Clause, U.S. Const. art. I, § 8, cl. 8
16
(supporting copyright and patent law)
but rather by the more general powers of the Commerce Clause, U.S. Const. art. I, § 8, cl. 3,
17
to
regulate interstate commerce. Because trademarks are an intangible form of property and they
have been interpreted and enforced like an intellectual property right, trademarks are
traditionally listed and discussed among the other intellectual property rights.
18
The form of trademarks is a mark (a logo, a word or a set of words, or a small picture or
image), or a certain style, shape, or appearance of a product or its packaging (trade dress), that
11
Hepp v. Facebook, 14 F.4th 204, 215 (3d Cir. 2021).
12
E.g., Harris Bricken, What IP Rights are Present in NFTs?, Lexology (Mar. 15, 2022),
https://harrisbricken.com/blog/what-ip-rights-are-present-in-nfts/#page=1.
13
E.g., Bold Patents, Protect Your Visionary Idea!, Bold IP, https://boldip.com/nationwide-patent-lawyers-
trademark-attorneys/ (last visited May 23, 2022); Inventiv Foundation, Welcome to Inventiv.org,
https://www.inventiv.org/ (last visited May 23, 2022).
14
See Int'l Info. Sys. Sec. Certification Consortium, Inc. v. Sec. Univ., LLC, 823 F.3d 153, 161 (2d Cir. 2016).
15
Radiance Found., Inc. v. N.A.A.C.P., 786 F.3d 316, 322 (4th Cir. 2015).
16
U.S. Const. art. I, § 8, cl. 8 reads: “[The Congress shall have Power] To promote the Progress of Science and
useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings
and Discoveries[.]”
17
U.S. Const. art. I, § 8, cl. 3 reads: “[The Congress shall have Power] To regulate Commerce with foreign Nations,
and among the several States[.]”
18
Hepp, 14 F.4th at 215.
4 Trademarks, NFTs, and the Law of the Metaverse
Comment Draft: Not for Citation or Republication
is used as a signifier of the source of the product or services in a marketplace.
19
There is no such
thing as a mark that has nothing to do with producing, advertising, or selling goods or providing
services in a marketplace.
Commerce is key to the concept of trademarks, and one cannot receive protection for a
mark unless steps are taken to show the mark’s continuing use or imminent use in commerce.
20
Commerce is the key to understanding trademarks as compared to other intellectual property
rights.
Use in commerce also is a factor in whether a person’s accidental or intentional use of a
mark infringes that mark. In theory, a use that is completely non-commercial and does not
threaten confusion (or blurring, or tarnishment) regarding the mark in the commerce of the
marketplace should not be actionable.
21
But as with other words used in the law, “use in
commerce” is a term of art—it does not always mean what the average lay person thinks it
means. A commercial use only means a use where the person could receive some benefit or
advantage from the use,
22
if only as recognition of their artistic skills or creative abilities
observable in the use. A large or obvious profit motive is not required. Thus, meme creators,
jokesters, visual commentators, and NFT artists or creators may find that their uses of
trademarks are actionable even when they were just having fun with it or kidding around.
B. Obtaining a protectable mark
The steps to obtaining a protectable trademark or service mark are: (1) Adopt a mark
(the logo, picture, words, etc.), (2) use it consistently in commerce, (3) on your goods or their
packaging, or in the advertising and displays at the point of purchase of your goods or
services.
23
Trademark protects words, text, letters, symbols, slogans, designs, shapes, or
packaging as long as they are “distinctive,” which in the law means they must have the ability to
distinguish your goods and services from goods and services of other sources.
24
Distinctive
identifiers that are arbitrary (e.g., Camel cigarettes) or fanciful (e.g., Kodak film) are the best
sort to reveal that your goods are specific goods of a certain quality from a specific
manufacturer.
25
Words or terms can be held to be less distinctive or even non-distinctive. Less
distinctive terms may be suggestive (e.g., Turtle Wax) or descriptive (e.g., Baby Oil) of the type
of product or its qualities, and non-distinctive terms are called generic (e.g., elevator or
escalator).
26
Less distinctive descriptive terms may grow into strong trademarks if the public
19
See United States Pat. & Trademark Off. v. Booking.com B. V., 140 S. Ct. 2298, 2302 (2020).
20
Underwood v. Bank of Am. Corp., 996 F.3d 1038, 1053–54 (10th Cir. 2021).
21
Romag Fasteners, Inc v. Fossil, Inc., 140 S. Ct. 1492, 1494 (2020); KP Permanent Make-Up, Inc. v. Lasting
Impression I, Inc., 543 U.S. 111, 117-21 (2004).
22
See Rearden LLC v. Rearden Com., Inc., 683 F.3d 1190, 1206–07 (9th Cir. 2012).
23
Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992).
24
Id. at 768-69.
25
Booking.com, 140 S. Ct. at 2301-02.
26
See id.
Trademarks, NFTs, and the Law of the Metaverse 5
Comment Draft: Not for Citation or Republication
comes to accept and associate the terms as a mark of specific goods of a specific producer, a
process called gaining “secondary meaning.”
27
If a potential mark owner only seeks protection in the explicit stores and marketplaces
where the potential mark owner places its goods, the owner can receive common law
protection by showing the three steps outlined above in conjunction with the specific stores
and locations in which it is operating.
28
To get statewide protection in a state, the potential
mark owner needs to show the same three steps, and step 2 requires a showing that the
potential mark owner actively is engaging in commerce and using the mark in that state.
29
To
get federal or nationwide protection, the potential owner must show in step 2 that it is actively
engaging in commerce and using the mark in more than one state of the United States—thus
implicating the interstate commerce interests of the federal government.
30
C. The protections and relief provided by Trademark law
The trademark law of the United States, which largely traces its source to the Lanham
Act of 1946, 15 U.S.C. §§ 1051 et seq., provides the mark owner with relief against others who
attempt to use confusingly similar marks in commerce. “Use,” as noted above, is a relatively
broad term to mean any use of a name, image, logo, etc., that might give the user some benefit
or advantage in the marketplace, or might confuse, or tarnish, or blur the existing mark in some
way. Allegedly competing marks draw attention when they are similar in name, sound,
appearance, or translation from a foreign language, especially if they are used on similar kinds
of goods or goods with similar channels of commerce.
31
The mark of infringement is whether
the second mark is found to be confusingly similar to the earlier mark or found to tarnish, blur,
or dilute the power of the earlier mark. If the mark was used intentionally and not accidentally
or completely innocently (e.g., “I didn’t know and had no reason to know this was a mark”),
then infringement can be found. But there is no “I knew it was someone’s trademark, but I was
only kidding around” defense to trademark infringement or dilution.
Section 43(a) of the Lanham Act
32
provides protections against false designations of
origin, false or misleading representations regarding goods in commerce, and claims relating to
false endorsement,
33
which is a claim that the user perpetuated a false impression that there is
a direct association (sponsorship or endorsement), or a false secondary association (one is
connected with the other) of a certain person or a certain senior mark (words or images) with
some unrelated, non-endorsed products. Falsely suggesting that a famous crypto whale
27
Id.; Two-Pesos, 505 U.S. at 771.
28
See Tana v. Dantanna's, 611 F.3d 767, 780-82 (11th Cir. 2010).
29
E.g., Advance Stores Co. Inc. v. Refinishing Specialties, Inc., 188 F.3d 408, 411-13 (6th Cir. 1999)
30
Tana, 611 F.3d at 780-82.
31
U.S. P.T.O., Trademark Manual of Examining Procedure 1207.01(b).
32
15 U.S.C. § 1125(a).
33
All three of these theories, false description of origin, false representation, and false endorsement, come from
the Lanham Act § 43(a), 15 U.S.C. § 1125(a).
6 Trademarks, NFTs, and the Law of the Metaverse
Comment Draft: Not for Citation or Republication
supports or endorses an NFT drop or that a famous “In Real Life” brand sponsors an NFT project
would trigger the application of the false endorsement provisions.
Section 43(c) of the Lanham Act
34
provides protection to famous marks from dilution,
which is defined in the law as a use of a mark or trade name that is likely to blur or tarnish the
distinctive power of the famous mark as an identifier of goods. Although the claim is defined
using vivid terms—dilution, blurring, tarnishment—in practice the law allows the owner of
famous marks to move against anyone that threatens the power of the mark to continue to
distinguish goods in the market, and those concepts are defined broadly. Anyone who uses a
mark in an attempt to parody or criticize a trademark is inviting a claim that the critical
treatment of the famous mark will hurt the mark by tarnishing it or making it less distinctive by
blurring it or confusing its meaning in the marketplace. There is a fair use doctrine for
trademarks,
35
but it is carefully defined in relation to consumer confusion rather than in line
with the general principles of copyright fair use that seek to encourage new expression, with
new content, meaning, and message as public goods under the First Amendment. In trademark,
a mark that is squeaky clean and powerfully distinctive is the public good the law seeks to
protect, not more speech, more criticism of marks, or more humor regarding famous brands
and their marks.
II. NFTs under the law of Trademarks
NFTs that are linked to expressive content—words, images, video, animations, and the
like—are capable of infringing on or diluting an existing trademark by displaying or otherwise
incorporating the mark into the expression linked to the NFT. The following examples illustrate
the problems with trademarks and NFT projects that can lead to trademark litigation.
A. Yuga Labs v. Ryder Ripps
Sometimes an NFT creator’s inclusion and display of famous marks is obvious, and Yuga
Labs/Bored Ape Yacht Club’s trademark lawsuit against Ryder Ripps
36
is just such a case. Ryder
Ripps is a persistent critic and protester against Bored Ape Yacht Club (BAYC), the popular
profile-picture, generative art NFT brand.
37
Ripps has taken the unusual posture of attempting
to “criticize” and “protest against” Yuga Labs, the creator of the Bored Ape Yacht Club
franchise, by copying every aspect of the Bored Ape brand—its logos, tradenames, trade dress,
and even the artwork down to the actual registered number of each ape—and proceeding to
34
15 U.S.C. § 1125(c).
35
Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 611–12 (6th Cir. 2009).
36
Yuga Labs, Inc. v. Ryder Ripps, Jeremy Cahen, and Does 1-10, No. 2:2022cv04355 (C.D. Cal. Jun. 24, 2022)
(asserting federal trademark claims of false designation of origin, false advertising, and cybersquatting; common
law trademark and unfair competition claims; and California claims of unfair competition, false advertising, unjust
enrichment, conversion, and intentional and negligent interference with prospective economic advantage).
37
See https://boredapeyachtclub.com/.
Trademarks, NFTs, and the Law of the Metaverse 7
Comment Draft: Not for Citation or Republication
sell his own Bored Apes in the same form (NFTs) as the original Bored Apes, but this time under
Ryder Ripps’ own identifier, RR/BAYC:
The above graphic
38
shows the original Yuga Labs’ Bored Ape Yacht Club #8919 listing on
OpenSea side-by-side with Ryder Ripps’ RR/BAYC #8919 listing on OpenSea.
Although Ripps changes nothing about the content, meaning, and expression of the
properties he copies, and does nothing in the listing of his works to change, distort, comment
on, or criticize the BAYC brand and its logos and marks (the names Bored Ape Yacht Club, Bored
Apes, Ape; the mark BAYC, the “BA YC ape skull” logo, and more), Ripps claims that because he
has wholesale copied the trademarks and trade dress of the BAYC apes but listed them in a new
NFT listing for a different NFT, that he has “recontextualized” the works. And somehow that act
of relisting the apes criticizes or comments on Yuga Labs. Outside of the actual NFT listings,
Ripps has cast aspersions on Yuga Labs and its founders for their alleged use of words and
imagery in the Bored Apes project that has been associated with WWII era German Nazis, Neo-
Nazis, and alt-right/4chan groups.
39
We could have a complete and productive discussion of these arguments under
copyright law because Ripps so obviously has copied the creative expression owned by Yuga
Labs in order to offer his own NFTs for minting and sale, and we would evaluate Ripps’ claims
that because he calls himself an appropriationist artist, and because he calls his works a satire
or parody, and “recontextualizes” the works by copying them and selling them under a new NFT
listing, that Ripps somehow has a copyright fair use argument—but Yuga Labs has denied us
that conversation because none of its claims are brought under copyright law. The one
plausible explanation I can come up with for the absence of copyright claims is that Yuga Labs
has not registered all of the affected works for copyright
40
and so cannot yet bring a copyright
38
Michael D. Murray, Cropped and revised thumbnail-sized image of the OpenSea listing for Bored Ape Yacht Club
#8919 and the OpenSea listing for RR/BAYC #8919, based on the illustration in Elliot Wong, Ryder Ripps’ Bored
Apes Raise Existential Questions for NFTs, Blockhead (Jun. 22, 2022), https://blockhead.co/2022/06/22/ryder-
ripps-bored-apes-pose-a-legal-challenge-to-the-biggest-name-in-nfts/.
39
Dorian Batycka, Artist Ryder Ripps Called the Bored Ape Yacht Club NFTs Racist. Now, Yuga Labs Is Suing Him for
Trademark Infringement and Harassment, Artnet News (Jun. 29, 2022), https://news.artnet.com/art-world/yuga-
labs-v-ryder-ripps-bayc-2137737.
40
According to the information on the Library of Congress’s public registry database, there are only nine
registrations under the name of Yuga Labs and seven registrations under the name of “Bored Ape Yacht Club” or
8 Trademarks, NFTs, and the Law of the Metaverse
Comment Draft: Not for Citation or Republication
infringement lawsuit for all of the affected works because prior registration, not just an
application for registration, would be required under 17 U.S.C. § 411.
41
Under trademark’s fair use doctrine, speech concerns often take a back seat to
preventing consumer confusion and dilution of famous marks.
42
The two established trademark
fair uses are the Nominative Fair Use and the Classic Fair Use. A “nominative” use means a use
of a trademark to identify a product or service of the trademark owner in circumstances that
will not cause consumer confusion. An example is a newspaper using a musical group’s
trademarked name in a polling survey to measure the group’s popularly; the use of the mark
was only to identify what group was being researched.
43
A “classic” fair use employs descriptive
words for an item (or rather, its class) that happen to look or sound like an actual trademark
name, but this use is fair because the owner of the mark that is implicated used descriptive
words relating to the class of its product in its own mark.
44
An example of a classic fair use case
is the Sunmark trademark “SweeTarts” for candy that tastes sweet and tart; these are
descriptive terms that could refer to many products of the class of sweet and tart foods and
beverages. Because of this, Ocean Spray could later describe its cranberry juice in advertising as
“sweet-tart” without infringing the SweeTarts brand because its juice is a member of this same
class of products.
45
But Ocean Spray could not, however, come out with a line of candy and call
it by the product name “Sweet-Tart” to compete one-on-one with the existing candy product
“SweeTart.”
46
Trademark cases do, from time to time, accept a parody or comment and criticism
defense to infringement or dilution, but the examples of failed parodies exceed the examples of
successful parodies,
47
and this accounts only for lawsuits that go the duration to an actual
decision. The majority of attempted fair uses are quashed by cease and desist letters or early
settlement of lawsuits.
48
When the cases go the duration, the courts are willing to find actual or
potential consumer confusion about the source or sponsorship of goods or services in some
“Bored Ape.” See https://cocatalog.loc.gov/cgi-bin/Pwebrecon.cgi?DB=local&PAGE=First (Title or Keyword: Yuga
Labs, Bored Ape, Bored Ape Yacht Club) (search performed Jul. 5, 2022).
41
See Fourth Estate Public Benefit Corp. v. Wall-Street.com, 139 S. Ct. 881 (2019).
42
See generally Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989); E.S.S. Ent. 2000, Inc. v. Rock Star Videos, Inc.,
547 F.3d 1095, 1099 (9th Cir. 2008).
43
New Kids on the Block v. News Am. Pub., Inc., 971 F.2d 302, 307–08 (9th Cir. 1992).
44
See 15 U.S.C. § 1115(b)(4); Gideon Parchomovsky & Alex Stein, Intellectual Property Defenses, 113 COLUM. L. REV.
1483, 1505–06 (2013).
45
Sunmark, Inc. v. Ocean Spray Cranberries, Inc., 64 F.3d 1055, 1058-59 (7th Cir. 1995).
46
Id. at 1059-60.
47
See examples discussed in LEONARD D. DUBOFF & MICHAEL D. MURRAY, ART LAW 219-21 (2D ED. 2017); 1 LEONARD D.
DUBOFF, MICHAEL D. MURRAY, ET AL., ART LAW DESKBOOK: ARTISTS' RIGHTS IN INTELLECTUAL PROPERTY, MORAL RIGHTS, AND
FREEDOM OF EXPRESSION 2-64–2-73 (3d ed. 2016); Leslie J. Lott, Trademark Parody, Lott & Fischer (Nov. 28. 2018),
https://www.lottfischer.com/blog/trademark-parody/.
48
See Abe Cohn, Trademark Cease and Desist Letters–The Complete Guide (2020),
https://www.cohnlg.com/trademark-cease-and-desist-letters/; Nikki Siesel, Settlement Options for Trademark
Disputes, https://www.ny-trademark-lawyer.com/settlement-options-for-trademark-disputes.html (last visited Jul.
8, 2022).
Trademarks, NFTs, and the Law of the Metaverse 9
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fairly outrageous situations. A parody t-shirt featuring artwork captioned “Mutant of Omaha”
and displaying a mutant wearing a Native American headdress failed the fair use test and was
held to infringe Mutual of Omaha’s trademark and Native American logo.
49
The producers of
the adult film, “Debbie Does Dallas,” were held to have created impermissible confusion over
the source of the film when the main star of the film wore the trademarked uniform of the
Dallas Cowboy Cheerleaders.
50
And the promoters of a “candyland.com” porn site were held to
have generated consumer confusion about the source or sponsorship of the site when one
remembers the 1950’s children’s game, “Candy Land” by Hasbro.
51
It simply causes too much
potential consumer confusion and risk of dilution through tarnishment of a mark to let
someone make an obvious use of the mark just to try to spoof or criticize it, drag it into
undesirable territory, or just to have a bit of fun.
Yuga Labs’ lawsuit does not arise from an attempt by Ripps to comment on or criticize
the Bored Ape logos or marks. Ripps did not attempt to alter the logos or marks or trade dress
of Yuga Labs to parody or criticize this brand.
52
Ripps has taken Yuga Lab’s own product, copied
it, and sold it using Yuga Labs’ own trademarks and trade dress, and he drew on all of the good
will that goes with this successful NFT brand. By copying as many of Yuga Labs’ Bored Ape
marks and logos as he possibly could and selling the same product, NFT profile pictures, and
even the same pictures, in the same exact marketplaces (e.g., OpenSea), Ripps is intentionally
creating about as much consumer confusion as he can. Ripps even jokes that he can hardly
believe it when consumers have not seen or heard enough to connect his works to the Bored
Ape Yacht Club franchise: “I am glad to say SOME people will never know what RR/BAYC stands
for no matter how hard we try.”
53
This lawsuit still is in its early stages and awaits future
resolution.
B. Nike v. StockX
Nike, surely one of the most famous brands in existence, is challenging a similarly
obvious use of its mark, sneaker designs, and trade dress, in a trademark action against
StockX
54
for creating and displaying images of Nike branded sneakers in the course of
advertising and selling StockX Vault NFTs:
49
Mut. of Omaha Ins. Co. v. Novak, 836 F.2d 397, 399–400 (8th Cir. 1987).
50
Dallas Cowboys v. Pussycat Cinema, Ltd., 604 F.2d 200, 205 (2d Cir. 1979).
51
Hasbro, Inc. v. Internet Ent. Group, Ltd., 40 U.S.P.Q.2d 1479, 1480, 1996 WL 84853 (W.D. Wash. 1996).
52
Compare Kraft Foods Holdings, Inc. v. Helm, 205 F. Supp. 2d 942, 948 (N.D. Ill. 2002) (failed parody of Kraft Foods
and Philip Morris products), with Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252 (4th Cir. 2007)
(successful parody of Louis Vuitton handbags).
53
See Ryder Ripps Bored Ape Yacht Club twitter feed (May. 28, 2022 1:53 PM),
https://twitter.com/RR_BAYC/status/1530608272906063876.
54
Nike v. StockX, No. 22-cv-00983 (S.D.N.Y.).
10 Trademarks, NFTs, and the Law of the Metaverse
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55
Nike’s theory is fairly simple: StockX is selling NFTs and making money on the NFTs
using Nike’s brand, Nike’s designs, Nike’s trade dress, and especially Nike’s multi-billion-dollar
swoosh logo.
56
The NFT is not the same as the sneakers—that fact is quite apparent from
anyone who has tried to lace up an NFT. But all puns aside, NFTs are separate from the items
that are “tokenized” by the NFT (i.e., linked to the NFT by the process of minting the NFT).
57
An
NFT records the existence and ownership of an asset that could be a pair of sneakers.
58
The NFT
and the record it creates is separately sold and independently valuable in terms of the bragging
rights and clout that goes along with NFT ownership.
59
Whether or not the NFT purchaser ever
lays eyes or hands on the actual physical sneakers after purchasing the NFT for $4,300, that NFT
purchaser can tweet or chat that they are the blockchain registered owner of a StockX Vault
NFT Nike Dunk Low Ben & Jerry’s Chunky Dunky pair of sneakers.
60
The NFT has value beyond
the actual physical pair of sneakers because you can buy the actual sneakers—minus the NFT—
on StockX’s own site for $1,550.
61
What should be clear from the above discussion is that with the Vault NFTs, StockX is
not selling or reselling actual sneakers in the usual purchase and sale sense—something it
55
Michael D. Murray, Cropped and revised thumbnail-sized images of StockX Nike sneaker NFT listings on
StockX.com Marketplace (2022).
56
See Katie Dupere, Here’s How Much the Nike Logo Is Actually Worth After It Was Purchased for $35 Nearly 50
Years Ago, Footwear News (Jan. 20, 2022, 11:20AM EST), https://footwearnews.com/feature/how-much-is-nike-
logo-worth-1203226247/.
57
Mitchell Clark, NFTs, explained, The Verge (Aug. 18, 2021, 9:20pm EDT),
https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq.
58
See Michael D. Murray, NFTs and the Art World – What’s Real and What’s Not, 29 UCLA ENT. L. REV. 100, 102-08
(forthcoming, 2022).
59
See Scott Galloway, Scarcity Cred, No Mercy/No Malice (Apr. 9, 2021), https://www.profgalloway.com/scarcity-
cred/. My Kentucky colleague, Brian Frye, has opined on this topic in several articles and papers: Brian L. Frye,
After Copyright: Pwning NFTs in a Clout Economy, __ COLUM. J. L. & ARTS ___ (forthcoming, 2022), available at
https://ssrn.com/abstract=3971240; Brian L. Frye, How to Sell NFTs Without Really Trying, ___ HARV. J. SPORTS &
ENT. L. ___ (forthcoming, 2022), available at https://ssrn.com/abstract=3930430; Brian L. Frye, Pwnership in the
NFT Art Market (March 18, 2022), https://ssrn.com/abstract=4060481.
60
https://stockx.com/chunky-dunky-vault-nft (last visited Jul. 6, 2022). $4,300 was the buy it now price for the NFT
on the day I viewed the listing.
61
https://stockx.com/nike-sb-dunk-low-ben-jerrys-chunky-dunky (last visited Jul. 6, 2022). $1,550 was the buy it
now price for the physical pair of chunky dunky sneakers on the day I viewed the listing.
Trademarks, NFTs, and the Law of the Metaverse 11
Comment Draft: Not for Citation or Republication
certainly could do under trademark law’s “first sale” doctrine,
62
and something it does in other
areas of its marketplace site.
63
With the Vault NFTs, StockX is attempting to sell a blockchain
encryption device that registers the NFT purchaser as “the registered owner” of an actual
physical pair of sneakers held in a vault.
64
The purchaser will not get possession of the sneakers
unless the purchaser gives up the NFT (StockX calls this “redeeming” the NFT).
65
Upon
redemption of the NFT, the purchaser won’t have the NFT anymore, which presumably means
the NFT will be “burnt”—sent to an inaccessible blockchain address—and the NFT purchaser
will no longer have that blockchain-registered status as the registered owner of the sneakers, or
at least it will no longer matter because the registration information will be inaccessible. But
the purchaser might have a legally enforceable promise (i.e., a contract) that StockX will send it
the actual pair of sneakers depicted in the listing for the Vault NFT. In this respect, StockX’s
Vault NFT is like an extremely costly claim check for a pair of sneakers that the crypto
community is willing to honor as a deed of ownership and certificate of authenticity for an
actual pair of sneakers.
66
StockX most likely will rely on the argument that it actually is reselling Nike-branded
sneakers under the trademark first sale doctrine and relying on the trademark nominative fair
use defense for its listing references to Nike—verbal and visual—regarding the items it is
reselling. In this argument, the NFT is a mere appendage to the sneakers, amounting to no
more than a tag on the sneakers that serves only as a certificate of authenticity and a deed of
ownership of the sneakers themselves. Nike is expected to argue that the NFT is the actual
thing being purchased, and it is the valuable item in an ownership and “pwnership” sense. The
NFT obviously is separate in value as indicated by the pricing of the sneakers alone vs. the
pricing of the Vault NFT, and the NFT is a different item because you cannot possess both the
NFT and the sneakers. As with the example in subsection A above, this lawsuit still is pending.
62
The trademark first sale doctrine holds that “resale by the first purchaser of the original article under the
producer's trademark is generally neither trademark infringement nor unfair competition” unless the reseller’s
behavior or sales practices with the article itself creates a risk of consumer confusion or dilution of the original
mark. Compare Bluetooth SIG Inc. v. FCA US LLC, 30 F.4th 870, 872–73 (9th Cir. 2022) (First Sale Doctrine protected
incorporation of authorized trademarked item into new item), with Au-Tomotive Gold Inc. v. Volkswagen of Am.,
Inc., 603 F.3d 1133, 1137–38 (9th Cir. 2010) (resale not protected by First Sale Doctrine because of post-purchase
confusion from reseller’s practices). If the reseller’s marketing, or repackaging, or quality control with the handling
of a product degrades the product or the mark it is associated with, this behavior will not be excused under the
first sale doctrine. See Trader Joe's Co. v. Hallatt, 835 F.3d 960, 970–71 (9th Cir. 2016).
63
See StockX, NFTs, https://stockx.com/sneakers.
64
See StockX, NFTs, https://stockx.com/nfts; https://stockx.com/lp/nfts/?g_acctid=709-098-4271.
65
https://stockx.com/lp/nfts/?g_acctid=709-098-4271.
66
Evelyse Carvalho Ribas, NFTs – Digital Certificate, License of Use, Ownership, Artlaw.club (Oct. 18, 2021),
https://artlaw.club/en/artlaw/nfts-digital-certificate-license-of-use-ownership-1. The record of ownership can be
used to establish provenance of the NFT and its linked item at least from the date of creation of the NFT. See
Ethereum, How do NFTs Work, https://ethereum.org/en/nft/#how-nfts-work (last visited Apr. 6, 2022); Michael D.
Murray, NFTs and the Artworld: What’s Real and What’s Not, 29 UCLA ENT. L. REV. 100, 114 (forthcoming, 2022).
12 Trademarks, NFTs, and the Law of the Metaverse
Comment Draft: Not for Citation or Republication
C. Hermès Int’l v. Rothschild
Sometimes the use of a mark or product design and trade dress is more subtle or at
least indirect, as in Mason Rothschild’s use of the famous Hermès marks and trade dress for
Birkin handbags.
67
Rothschild’s use was to create NFTs linked to images of handbags marketed
with a similar sounding name, “MetaBirkin,” and similar appearance (if furrier) to the famous
Hermès handbags.
MetaBirkins Bags
68
Hermès Birkins
Bags
69
The “furry” appearance is intentional, as the NFTs are supposed to be criticizing Birkin bags, and
one of Rothschild’s beefs with Hermès is its use of real animal skins and pelts in the making of
leather bags.
70
Rothschild also claims a full fair use defense to all charges under the First
Amendment because his renderings of the MetaBirkins bags are artistic and are not actual
handbags or even images of actual handbags.
71
The artistic fair use defense in trademark law has a similarly mixed history as the parody
and comment and criticism fair use defense discussed in sub-section A above. Artistic uses of
marks still can cause consumer confusion,
72
but when a mark is used in the context of artistic
expression and the mark is relevant to the meaning of the expression of the work and does not
cause a significant risk of consumer confusion as to the source or sponsorship of the artistic
67
Hermès Int’l v. Rothschild, No. 22-cv-00384 (S.D.N.Y.).
68
Michael D. Murray, Cropped and revised thumbnail-sized images of Mason Rothschild’s MetaBirkins listings on
LooksRare.org NFT Marketplace (2022).
69
Michael D. Murray, Cropped and revised thumbnail-sized images of Hermès Birkins bags listings on Google
Marketplace (2022).
70
Tora Northman, The Metabirkin vs. Hermès Saga Continues, Highsnobiety (Feb. 10, 2022),
https://www.highsnobiety.com/p/hermes-metabirkin-nft/.
71
See id. Fair use defenses will be discussed in part IV of this Article.
72
Chrysler Corp. v. Newfield Publications, Inc., 880 F. Supp. 504, 512 (E.D. Mich. 1995).
Trademarks, NFTs, and the Law of the Metaverse 13
Comment Draft: Not for Citation or Republication
work, then the use is considered fair and not infringing.
73
Courts of the United States Courts of
Appeals for the Second Circuit, Third Circuit, Fifth Circuit, Sixth Circuit, and Ninth Circuit have
applied the test in Rogers v. Grimaldi,
74
which states:
[T]he [trademark] Act should be construed to apply to artistic works only where
the public interest in avoiding consumer confusion outweighs the public interest
in free expression. . . . [T]hat balance will normally not support application of the
Act unless [the use of the mark] has no artistic relevance to the underlying work
whatsoever, or, if it has some artistic relevance, unless the [use] explicitly
misleads as to the source or the content of the work.
75
The trial court in Hermès v. Rothschild has indicated that it will apply the Rogers test in
determining if Rothchild’s expressive use of the marks and trade dress of the Birkins bags line is
relevant to his criticism of the Hermès products, and whether Rothschild’s overall project runs
the risk of consumer confusion over the source or sponsorship of his NFTs.
76
The trial court has
already denied Mr. Rothschild a quick dismissal of the suit because it found that the Rogers test
does not make it obvious that Hermès cannot state a claim of trademark infringement against
Rothschild.
77
In other words, Rothschild’s use of the marks and trade dress in creating and
marketing his NFTs might arguably be relevant to his critical portrayal of Hermès’ bags, but this
argument does not arise from the four corners of Hermès’ complaint, and thus does not
support a conclusive finding in favor of either party on this prong of the test at the motion to
dismiss stage.
78
On the second prong, the court allowed that Rothschild’s use of the Birkin
marks and trade dress still runs the risk of consumer confusion.
79
I would add that the
confusion poses additional concerns in the context of the omniverse economy in which “in real
life” products and their metaverse twins are sold in the same marketplaces.
In spite of the traditional “big vs. little,” “Goliath vs. David” look and feel of this lawsuit,
which is entirely common with trademark lawsuits involving established brands, Hermès really
has a lot to lose with this lawsuit. First, no one is likely to miss the connection of Birkins and
MetaBirkins. Those who miss the wording clues might still see the connection with the arched
loop hand straps of a certain size and length on a rectangular handbag of a certain size and
shape and think “Birkins” with both bags. Many brands evolve their wares to target different
audiences and demographics, so it is hardly inconceivable that Hermès would expand the
Birkins line to include faux fur offerings.
73
E.S.S. Ent. 2000, Inc. v. Rock Star Videos, Inc., 547 F.3d 1095, 1099 (9th Cir. 2008); Mattel, Inc. v. MCA Records,
Inc., 296 F.3d 894, 902 (9th Cir.2002); Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 809 (9th Cir. 2003).
74
Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989).
75
Id. See also Cliffs Notes, Inc. v. Bantam Doubleday Dell Pub. Group, Inc., 886 F.2d 490, 495 (2nd Cir. 1989)
(Rogers test applies to artistic expression generally, not just to the titles of expressive works).
76
Hermès Int'l v. Rothschild, No. 22-CV-384 (JSR), 2022 WL 1564597, at *4-6 (S.D.N.Y. May 18, 2022)
77
Id. at *6.
78
Id. at *5.
79
Id. at *5-6.
14 Trademarks, NFTs, and the Law of the Metaverse
Comment Draft: Not for Citation or Republication
Mark owners are obligated by trademark law to act vigorously to stamp out infringers,
even those at the level of Rothschild.
80
If they don’t, the marketplace will become filled with
Jirkin bags, and Mirkin bags, and quasi-Birkins, and near-Birkins, and Birkin-lookalikes, and
suddenly the Hermès and Birkin names do not stand for anything in the marketplace, and
certainly not for the distinctive, high-quality, high-priced items that they currently stand for. At
that point their mark will be dead.
But the biggest risk is that MetaBirkins by name (Meta-) and design (NFT) is intended to
be a product of the metaverse, and Hermès has not made openly publicized moves to inhabit
the growing metaverse fashion scene.
81
Forecasters believe that high fashion items represented
by NFTs will be a key component of commerce in the metaverse.
82
NFTs are intimately
associated with true “ownership” of digital and virtual items in the metaverse, and some
metaverse denizens are sure to want interesting and fashion-forward accessories for their
metaverse avatars to carry around.
83
If Hermès were to sit on its rights and let Rothschild carry
out his MetaBirkins NFT project, then when Hermès decides to move into the metaverse space
and sell genuine Birkin handbag NFTs, it is arguable that Mason Rothschild would have a viable
claim that Hermès was infringing on his metaverse brand.
D. Miramax v. Tarantino
Although it is not the newest of these lawsuits,
perhaps the most publicized trademark and copyright suit of
the NFT era (2021-present) involves film producer Miramax
LLC and Quentin Tarantino, the director of some of Miramax’s
most famous movies, over Tarantino’s attempt to create and
80
The trademark concepts are called “laches” or “acquiescence” and serve as defenses to infringement actions.
See 15 U.S.C. § 1115; Eat Right Foods Ltd. v. Whole Foods Mkt., Inc., 880 F.3d 1109, 1115, 1121 (9th Cir. 2018).
81
Privé Porter, a retailer and reseller of Hermès Birkin bags and other luxury brands, has made NFTs to serve as
deeds of ownership and certificates of authenticity for the bags, see Sharon Edelson, Privé Porter to Mint NFTs at
Upcoming Decentraland Metaverse Fashion Week, Forbes (Mar. 22, 2022, 9:00 EDT),
https://www.forbes.com/sites/sharonedelson/2022/03/22/priv-porter-to-mint-nfts-at-upcoming-decentraland-
metaverse-fashion-week/?sh=77390a1e7f8c. Thus, Privé Porter’s business model with Hermès’ bags appears to be
identical to that used by StockX with its Vault NFTs of Nike sneakers that drew a lawsuit from the brand owner,
Nike as discussed above.
82
E.g., Shiraz Jagati, How the Metaverse can revolutionize the fashion industry, Cointelegraph (Jul. 7, 2022),
https://cointelegraph.com/news/how-the-metaverse-can-revolutionize-the-fashion-industry; Janet Balis, How
Brands Can Enter the Metaverse, Harv. Bus. Rev. (Jan. 03, 2022), https://hbr.org/2022/01/how-brands-can-enter-
the-metaverse.
83
A virtual bee-embroidered Gucci Dionysus bag made headlines after it recently commanded a resale price of
350,000 Robux – or roughly $4,115, so that the purchaser could walk around with the handbag in the proto-
metaverse world of Roblox. See Dylan Kelly, A Virtual Gucci Bag Sold For More Money on Roblox Than The Actual
Bag, Hypebeast, (May 26, 2021), https://hypebeast.com/2021/5/virtual-gucci-bag-roblox-resale. The virtual bag
cost more than the $3,400 retail price of the “In Real Life” bag sold by the Kering-owned fashion brand. Id. Note,
too, that this virtual bag was not linked to an NFT and it will not be usable outside the Roblox virtual world. Id.
Trademarks, NFTs, and the Law of the Metaverse 15
Comment Draft: Not for Citation or Republication
sell NFTs
84
that tokenize portions (scenes) from Tarantino’s personal handwritten drafts of his
screenplay of the 1994 film, Pulp Fiction.
85
I have previously extensively discussed the questions
the court will struggle to answer under copyright law
86
regarding the interpretation of the
copyrights over the movie and screenplay assigned from Tarantino to Miramax when the movie
was produced, and the rights regarding the screenplay reserved by Tarantino, and whether
Tarantino’s production of the NFTs exceeds Tarantino’s reserved rights to further publish the
screenplay in audio and electronic formats.
87
The suit must also consider whether Tarantino’s
scans of his handwritten drafts that led to the screenplay actually are an act of copying of the
final screenplay of the movie—the copyrighted work itself.
88
But Miramax also raises trademark
claims regarding the mark “Pulp Fiction” that Tarantino made several references to in the
marketing of his NFTs.
89
The trademark claims in this suit are largely secondary to the copyright claims, but the
copyright claims are not dispositive of the trademark claims. Even if Miramax is correct that
Tarantino cannot sell NFTs linked to Tarantino’s handwritten pages from the draft of what
became the script for Pulp Fiction under copyright law, Tarantino’s attempt to market and
promote this effort would appear to have a good chance of success under the nominative fair
use defense: the NFTs are linked to scans of a handwritten draft of a motion picture screenplay;
the screenplay led to the motion picture Pulp Fiction. Tarantino most likely can say “Pulp
Fiction” to identify the title of the draft screenplay was that was scanned to make the NFTs.
90
Miramax, however, will argue that use of the valuable mark, Pulp Fiction, draws attention to
Tarantino’s whole NFT enterprise, that the name of the film is used in a marketing and
advertising sense for a product (NFTs) in commerce, and that Tarantino competes against
Miramax for future business when and if Miramax decides to sell actual scenes—video clips—of
portions of Pulp Fiction the movie as NFTs in the future, something that Miramax has suggested
it would be interested in doing.
91
Thus, as with the other examples here, I cannot predict the
outcome of this dispute with any certainty.
84
Image at left: Michael D. Murray, Cropped and modified thumbnail-sized image of Tarantino NFT home page,
https://tarantinonfts.com/.
85
Miramax, LLC v. Tarantino, 2:21-cv-08979-FMO-JC (C.D. Cal. 2021).
86
Michael D. Murray, NFT Ownership and Copyrights 14, 15-16 (Jul. 2, 2022), https://ssrn.com/abstract=4152468.
87
See Complaint, Miramax, LLC v. Tarantino, 2:21-cv-08979-FMO-JC at 5, ¶ 21 (C.D. Cal. 2021),
https://www.thetmca.com/files/2021/12/miramax-v.-tarantino.pdf.
88
See Emily Behzadi, The Fiction of NFTs and Copyright Infringement, 170 U. PENN. L. REV. ONLINE,
https://www.pennlawreview.com/2022/04/12/the-fiction-of-nfts-and-copyright-infringement/.
89
Complaint, Miramax, LLC v. Tarantino, 2:21-cv-08979-FMO-JC, Third and Fourth Claims for Relief.
90
See, e.g., Applied Underwriters, Inc. v. Lichtenegger, 913 F.3d 884, 893 (9th Cir. 2019) (identifying the subject of
your communication by its trademark name is a nominative fair use); New Kids on the Block, 971 F.2d at 308
(same). I am assuming that the draft that Tarantino scanned did use the title, Pulp Fiction, and that it did not have
a different working title pre-production.
91
David James, Miramax is furious about Quentin Tarantino’s ‘Pulp Fiction’ NFT plans, We Got This Covered (Nov
17, 2021 7:39 AM), https://wegotthiscovered.com/movies/miramax-is-furious-about-quentin-tarantinos-pulp-
fiction-nft-plans/.
16 Trademarks, NFTs, and the Law of the Metaverse
Comment Draft: Not for Citation or Republication
IV. Conclusion
A brand means business, or commerce, to be exact. NFTs are also used in business and
commerce. It is of little matter that the commerce of NFTs has loftier ambitions to open up
opportunities in the present omniverse of cyberspace or future metaverse-only marketplaces.
When NFTs are created and sold by United States citizens or are used to infringe on or injure
the rights of United States citizens in projects that were offered for sale or participation in by
United States citizens, then the courts of the United States will exercise jurisdiction over these
parties and their activities.
NFTs do not warp the rules of trademark and unfair competition laws, but they do
provide a whole new platform in which to use and potentially infringe on or dilute existing
marks. Although occasionally and famously linked to artwork, particularly digital artwork,
92
NFTs are a separate thing from the items they tokenize.
93
Thus, NFTs cannot automatically be
characterized as artistic expression or any kind of expression. The NFT itself is a blockchain
recording device operated by a smart contract that updates the blockchain ledger when the
NFT is traded or sold.
94
Transferring ownership of an NFT means transferring the private keys to
allow access and control of the smart contract of the NFT.
95
There is nothing inherently
expressive about NFTs, except that the crypto community reads the marketing in the listing of
certain NFTs as conveying a promise that the ownership of the NFT is ownership of the item
linked to the NFT. Some schemes stretch this conception, as when StockX requires the
purchaser of a Vault NFT to give up (“redeem”) the NFT in order to obtain possession of the
sneakers of which the NFT purchaser supposedly was the owner. Damien Hirst famously
created a “Do you own the tokenized item, or not?” conundrum when created an NFT art
series, “The Currency,” linked to physical works of art (sheets of paper with painted dots on
them) and asked each NFT purchaser after one years’ time to make an election to either keep
the NFT and order Hirst to destroy the original artwork, or to “burn” the NFT (i.e., send it to an
address on the blockchain where no one has access to the smart contract of the NFT) and
92
NFTs became a well-known item in the crypto community in 2017 with the introduction of the CryptoPunk
generative art NFT collection and the CryptoKitties NFT collection. Andrew Steinwold, The History of Non-Fungible
Tokens (NFTs), Medium (Oct. 7, 2019), https://medium.com/@Andrew.Steinwold/the-history-of-non-fungible-
tokens-nfts-f362ca57ae10. Later still, NFTs became commonly known and widely recognized outside of the crypto
community in 2021 with the famous sale of Beeple’s EVERYDAYS work. Robyn Conti & John Schmidt, What Is An
NFT? Non-Fungible Tokens Explained, Forbes (Feb. 15, 2022), https://www.forbes.com/advisor/investing/nft-non-
fungible-token/; Kelly Crow and Caitlin Ostroff, Beeple NFT Fetches Record-Breaking $69 Million in Christie’s Sale,
Wall St. J., Mar. 11, 2021, 10:48 AM ET, https://www.wsj.com/articles/beeple-nft-fetches-record-breaking-69-
million-in-christies-sale-11615477732.
93
See Rakesh Sharma, Non-Fungible Token (NFT) Definition, Investopedia (Feb. 26, 2022),
https://www.investopedia.com/non-fungible-tokens-nft-5115211.
94
Why do I Need a Crypto Wallet for NFTs?, Electric Artefacts (Jun. 4, 2021),
https://www.electricartefacts.art/news/why-do-i-need-a-crypto-wallet-for-nfts.
95
A Look Into Public Keys, Private Keys, and Wallet Addresses, Paxful (Apr. 21, 2020),
https://paxful.com/blog/what-are-public-keys-private-keys-wallet-address/; Why do I Need a Crypto Wallet for
NFTs?, Electric Artefacts (Jun. 4, 2021), https://www.electricartefacts.art/news/why-do-i-need-a-crypto-wallet-for-
nfts.
Trademarks, NFTs, and the Law of the Metaverse 17
Comment Draft: Not for Citation or Republication
receive and keep the physical artwork.
96
This is not ownership in a traditional sense, and yet the
money flows into the NFT marketplace where the bragging rights and “pwnership” value of
being recorded on the blockchain as the registered owner of a digital or physical item exceeds
the value of the uninhibited right to possession and use of the item.
The cases discussed above are in progress and do not provide ready examples or lessons
on how to conduct NFT commerce now or in the future. It is likely that some will settle, but
others may give us a clue as to how existing law will be applied in this new and developing
metaverse economy.
96
Caroline Goldstein, Damien Hirst’s NFT Initiative, Which Asks Buyers to Choose Between a Digital Token and IRL
Art, Has Already Generated $25 Million, ArtNet News (Aug. 25, 2021), https://news.artnet.com/market/damien-
hirst-nft-update-2002582.