Key Points:
- Trademark law is being tested by the rise of NFTs, challenging traditional ideas of brand identity and consumer protection
- The central legal issue in NFT-related trademark disputes is whether a consumer is likely to be confused about brand affiliation
- Major court cases involving Hermès, Nike, and Yuga Labs are shaping how digital branding will be regulated
- While copyright protects creative content, trademarks protect brand identifiers—two distinct legal concepts often misunderstood
- Courts in the U.S., EU, and China are approaching NFT trademark issues differently, reflecting divergent regulatory philosophies
- NFTs are now legally recognized as goods in some jurisdictions, opening the door for trademark enforcement in digital spaces
- “Phygital” products—those linking digital tokens to physical items—introduce new complications around ownership and brand use
- Companies are advised to proactively file trademarks covering virtual goods to protect their brands in evolving digital marketplaces
The Collision of Legacy Law and Digital Innovation
The legal framework governing trademarks was built for a physical world. It emerged from storefronts, packaging, and tangible goods—places where brand identity could be seen, touched, and immediately associated with a source. Now, that framework is being stretched across digital landscapes where ownership is abstract, distribution is borderless, and identity can be replicated with a few lines of code. Non-fungible tokens, or NFTs, sit at the heart of this disruption. They represent unique digital assets, but their connection to real-world brands has ignited a wave of litigation that is forcing courts to reinterpret century-old principles in real time.
What was once a relatively stable area of intellectual property law is now a contested frontier. The core function of a trademark—to signal origin and prevent consumer confusion—is still valid, but its application in decentralized, pseudonymous environments is anything but straightforward. When someone buys an NFT depicting a luxury handbag or a sneaker, are they purchasing art, a collectible, or an implied endorsement from a brand? The answer isn’t always clear, and that ambiguity is precisely what courts are now tasked with resolving. The outcome will determine not just who can use a logo in a digital space, but how much control brands retain over their identity when it floats beyond their servers and into the blockchain.
Legal Precedents in the Digital Arena
One of the most pivotal moments in this legal evolution came in early 2023, when Hermès won a decisive victory against digital artist Mason Rothschild. The case centered on a series of NFTs called “MetaBirkins,” which featured stylized, furry versions of the iconic Birkin bag. Though Rothschild claimed the work was satire and protected under free expression, the jury found that the visual similarity and branding cues created a real risk of consumer confusion. Testimonies revealed actual instances where buyers believed the NFTs were officially licensed by Hermès. This wasn’t just about aesthetics—it was about the expectation of authenticity in a market where trust is fragile.
The ruling sent shockwaves through the NFT community. It established that even digital creations, no matter how abstract or interpretive, could infringe on a brand’s trademark if they misled consumers. The judge dismissed arguments of artistic freedom when commercial intent was present, emphasizing that selling NFTs for profit moved the project beyond pure expression. While an appeal is ongoing, the initial verdict signaled a clear message: major brands have the right to defend their identity in virtual spaces, especially when their reputation could be diluted or exploited.
Complexity in Motion: The Nike vs. StockX Dispute
Not all cases deliver such clarity. The legal battle between Nike and StockX illustrates the gray zones that still dominate this space. In 2022, Nike filed a lawsuit against the resale platform over its “Vault NFT” initiative—a system where customers could buy digital tokens representing physical Nike sneakers stored in StockX warehouses. Nike argued that the use of its logos and branding on these NFTs implied an official partnership that didn’t exist. The concern wasn’t just about misuse of trademarks, but about the potential for fraud in a market where digital representations can outpace physical verification.
By March 2025, the court had ruled that StockX had indeed sold counterfeit physical shoes, validating part of Nike’s claim. However, the more complex question—whether the NFTs themselves constituted trademark infringement—remained unresolved. The judge acknowledged the novelty of the issue, noting that digital tokens tied to real goods occupy a hybrid space not fully addressed by current law. With no clear precedent, the case is set for a full trial, one that could redefine how brands interact with digital proxies of their products. The stakes are high: if platforms can freely use brand names to authenticate digital twins of physical goods, the door opens to widespread misuse. But if brands gain exclusive control, innovation in digital commerce could be stifled.
A Surprising Turn in the Bored Ape Saga
In what seemed like a reversal of momentum, Yuga Labs suffered a setback in its legal fight against artist Ryder Ripps. The company, known for the Bored Ape Yacht Club (BAYC) collection, had initially won a $9 million judgment in 2025, claiming that Ripps created and sold nearly identical NFTs to deceive buyers. But an appeals court overturned the decision, stating that Yuga Labs failed to prove a critical element: that consumers were actually confused about the origin of Ripps’s work.
This outcome was not a win for copycats, but a reminder of the burden of proof in trademark law. The court did not deny that Ripps’s work was derivative or even opportunistic. Instead, it emphasized that trademark protection hinges on consumer perception, not just visual similarity. Without evidence that buyers believed Ripps’s NFTs were official BAYC products, the claim collapsed. Yet, in a significant development, the court also affirmed that NFTs qualify as “goods” under trademark law. This classification is foundational—it means NFT creators can, in principle, enforce their brand rights, provided they can demonstrate confusion in the marketplace.
Global Approaches to a Borderless Problem
Different regions are responding to this challenge in strikingly different ways. In the United States, the judiciary is leading the charge, applying existing trademark doctrines to digital assets without waiting for legislative updates. A 2024 review by a federal advisory body concluded that new laws weren’t yet necessary, but admitted widespread confusion among consumers and creators about what rights NFT ownership actually entails. This judicial experimentation means outcomes vary by jurisdiction, creating a patchwork of rulings that companies must navigate carefully.
Meanwhile, the European Union has taken a more structured approach, updating its trademark regulations to explicitly include virtual goods. However, it imposes strict requirements: applicants must specify the type of virtual product, such as “digital clothing for avatars” or “virtual sneakers.” This specificity aims to prevent overly broad claims, but it clashes with the fluid, global nature of blockchain technology. EU trademarks are territorial, yet NFTs circulate freely across borders, raising questions about enforcement and jurisdiction. China, on the other hand, has taken a cautious but pragmatic stance. While banning cryptocurrency, it has recognized NFTs as protected digital property and held platforms accountable for hosting infringing content. This reflects a broader interest in controlling the metaverse while limiting financial risk.
Ownership, Identity, and the Phantom of Control
One of the most misunderstood aspects of NFTs is ownership. Buying a token does not automatically grant rights to the underlying intellectual property, nor does it always secure the physical item it represents. This disconnect is especially pronounced in “phygital” models, where a digital token is linked to a real-world object. In these cases, the relationship between digital and physical is defined not by the blockchain, but by the terms of sale—often buried in fine print or user agreements.
This creates a dangerous gap. A buyer might assume that owning an NFT of a designer jacket means they own the jacket, or at least the right to use the brand’s logo with it. But unless explicitly stated, they own only the token. The brand retains full control over its trademarks, and unauthorized use—even on a digital twin—can lead to legal action. Companies are increasingly aware of this vulnerability and are filing new trademark applications that specifically cover virtual goods, digital fashion, and NFT-based services. These filings are not just defensive moves—they are strategic attempts to stake claim in a future where brand presence is as important in virtual spaces as it is in physical ones.
Conclusion
The question is no longer whether trademarks apply to NFTs, but how. Courts are no longer spectators in this transformation—they are active architects, shaping the rules as disputes unfold. From Hermès defending its luxury image to Nike grappling with digital authenticity, each case adds a new layer to the evolving definition of brand protection in the digital age. The principle of consumer confusion remains the anchor, but its interpretation is expanding to include digital perception, online behavior, and the psychology of virtual ownership.
As the lines between physical and digital blur, the need for clarity grows. While some jurisdictions are adapting with precision, others are relying on judicial interpretation to fill the void. For businesses, the path forward is clear: proactive trademark registration covering virtual categories is no longer optional—it’s essential. The metaverse may be imaginary, but the legal consequences of ignoring it are very real. The rulebook is still being written, and those who wait risk losing control of their identity in the very spaces where the future of commerce is being built.