The digital age has transformed not only how people interact and transact but also how businesses operate and how brands are perceived. With the rapid rise of virtual goods, immersive metaverse environments, NFTs, and blockchain technology, trademarks are increasingly being tested in contexts far removed from the physical world in which they first developed. Australia has not been immune to these developments. Like many global intellectual property offices, IP Australia has seen a surge of trademark applications that attempt to capture rights in virtual spaces. To keep pace, it introduced a ‘guidance’ that provided much-needed clarity on how emerging digital products and services were to be classified, aligning itself with global trends and the most recent updates to the Nice Classification.
‘Virtual’ or ‘downloadable’ Goods
The first area where trademark law intersects with the virtual world is in the classification of virtual goods. These are digital items used in online environments, from skins and clothing for avatars to digital art, music files, and interactive media. While virtual goods may appear to be radically different from tangible goods, IP Australia has determined that they are essentially data and therefore sit in Class 9. This ensures consistency in treatment and aligns with the approach taken by other major offices such as the EUIPO and USPTO.
However, simply describing an item as “virtual goods” or “downloadable goods” is insufficient. Such vague language fails to convey the nature of the product and leaves applications open to challenge. Instead, applicants must be precise. If the product is a digital dress, it should be described as “downloadable virtual clothing.” If it is a music track, it should be specified as “downloadable digital music files.” The emphasis on specificity not only helps the examiner assess the application but also ensures that trademark protection is meaningful in enforcement contexts, reducing the risk of disputes over the scope of rights.
Services relating to these virtual goods require separate classification. For example, if a business is engaged in the online retail of downloadable virtual clothing, that activity would fall under Class 35. This distinction highlights the fact that while the goods themselves belong to one class, the services surrounding them may sit elsewhere depending on the nature of the activity.
Metaverse and Virtual Environments
The concept of the metaverse has generated enormous attention, and with it comes a wave of trademark applications seeking protection for activities in virtual environments. Applicants frequently use terms like “metaverse,” “web3,” or “virtual environments” to describe these services. IP Australia has indicated that while terms like “metaverse” and “web3” will be accepted, “virtual environments” is the preferred term because of its broader application across different platforms and technologies.
One of the key principles guiding classification in this space is the focus on the real-world impact of the service. If the effect of the service is essentially the same whether provided in person or virtually, the classification should mirror its physical counterpart. For instance, education services, whether delivered through a physical classroom or a virtual lecture hall in the metaverse, belong in Class 41. Similarly, banking services, even if conducted through a blockchain-based platform in a virtual environment, continue to fall under Class 36 because the underlying financial transaction remains the same.
There are, however, services that operate differently in virtual spaces and therefore require reclassification. A restaurant in the physical world provides tangible food and beverages and is classified in Class 43. A “restaurant” in the metaverse, on the other hand, offers digital experiences where avatars consume virtual meals. The real-world impact is not the provision of food but rather entertainment, so such a service would fall under Class 41. Likewise, travel experiences offered in a purely digital environment would be considered entertainment services, not transportation, since no actual movement of people occurs. These nuances highlight the importance of thinking carefully about the real-world effect of virtual services when drafting specifications.
NFTs, i.e. Non-Fungible Tokens
Non-fungible tokens, or NFTs, have perhaps generated the most legal uncertainty of all new digital developments. By design, NFTs are unique blockchain-based tokens that function as certificates of authenticity for digital or physical items. They are not, in themselves, goods or services. This has important implications for trademark classification.
An application that claims “NFTs” or “non-fungible tokens” without further description will not be accepted. Instead, the application must specify the goods or services authenticated by the token. For example, “downloadable digital image files authenticated by non-fungible tokens” would fall under Class 9. The same is true for “downloadable digital music files authenticated by NFTs.” Where the application relates to services involving NFTs, such as online retail of authenticated digital goods, those services must be classified accordingly, for instance under Class 35.
NFTs can also authenticate physical goods, linking real-world objects like fashion items or artworks to digital proof of ownership. In such cases, the classification depends on the underlying product. A piece of clothing authenticated by an NFT would be classified in Class 25, while a painting authenticated by an NFT would be placed in Class 16. The unifying principle is that the NFT itself is merely a means of certification, not a standalone good or service.
Blockchain i.e. a decentralized ledger
Blockchain, like NFTs, is often misunderstood in trademark applications. While it underpins cryptocurrencies, smart contracts, and digital authentication systems, blockchain technology is not a trademarkable product or service in its own right. For classification purposes, blockchain is treated as the method through which goods or services are provided. Applicants must therefore specify how the blockchain is being used.
Software that incorporates blockchain technology can be described as “downloadable computer software for blockchain technology” in Class 9. Financial services delivered using blockchain, such as electronic funds transfer, remain classified in Class 36. Similarly, programming services that involve creating smart contracts on a blockchain would fall under Class 42. Once again, specificity is essential, and vague references to “blockchain” without context will not pass examination.
Global adaptation to the evolving domain
While Australia has been proactive in providing classification guidance, courts and IP offices around the world are beginning to grapple with substantive disputes involving virtual trademarks. These cases illustrate how traditional principles of trademark law are being applied in novel contexts and provide important lessons for Australian businesses.
In Europe, Burberry (read more here) faced a setback when its attempt to register certain virtual goods, including NFTs and digital bags, was partially refused by the EUIPO. The refusal was based on issues of distinctiveness, demonstrating that even in the digital space, the basic requirement that a mark must distinguish the applicant’s goods or services from those of others remain firmly in place.
Also, in Italy, a court in Rome ruled in favor of the football club Juventus in the “Pasapalabra” case (read more here), which had sued over the unauthorized use of its marks on NFTs depicting players. The court held that Juventus’ trademark rights extended into this new medium, especially as the club had already engaged in blockchain-based activities. This case shows how existing rights can, in some circumstances, provide sufficient protection against unauthorized digital uses.
That said, even in the United States, Nike initiated proceedings against StockX (read more here), an online resale platform, for selling NFTs that depicted Nike sneakers. Nike argued that consumers could be misled into thinking that these NFTs were authorized by the company. The case raised broader questions about whether NFTs tied to physical goods are themselves infringing products and how consumer confusion is to be assessed in a digital environment. Later, however in August 29th 2025, Nike settled the lawsuit against StockX (read more here). The matter was be dismissed with prejudice, thereby preventing any future refiling. In a joint statement, the companies confirmed that the dispute had been settled amicably under confidential conditions.
These international examples reveal that the challenges in trademark enforcement in the virtual space go beyond classification. Issues of distinctiveness, use, and likelihood of confusion continue to play a central role, albeit in contexts that require creative legal reasoning.
A Forward-Looking Perspective
The rise of virtual goods, NFTs, and blockchain is not a niche phenomenon, but it represents a structural shift in how brands engage with consumers. Just as the internet revolutionized commerce two decades ago, immersive digital environments are now reshaping the boundaries of trade and brand identity. For lawyers, businesses, and regulators, the challenge is to ensure that the principles of trademark law, i.e. clarity, distinctiveness, and fairness remain effective in this new context.
That said, for Australian businesses, this is both a challenge and an opportunity. Those who act early, secure their rights, and carefully consider their specifications will be well-placed to thrive in the virtual space. Those who hesitate may find themselves facing disputes that are costly, complex, and difficult to resolve.
With careful planning and sound advice, businesses can ensure that their brands remain protected wherever consumers choose to interact with them, i.e. whether in the physical world, the metaverse, or the next digital frontier.
Contact us to learn more about how LexGeneris can assist you with all your intellectual property needs. You can also schedule a no-cost consultation with our team of expert IP Attorneys Australia, IP Attorneys India, and IP Attorneys New Zealand.
