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By: Marc Reiner

Intellectual property location, like real property location, is greatly important for fashion brands seeking to capture the notice of customers. The creation of new locations in the virtual world provides new opportunities for scam artists who seek to wrongfully profit off of the trademark goodwill of established brands. The rush on registration of domain names twenty-five years ago was a perfect example of this phenomenon. Brands that were slow to register their trademarks as domain names found themselves needing to pay exorbitant sums to recover their rightful domain names. Trademark law was often unhelpful until the Anticybersquatting Consumer Protection Act was enacted in 1999, but by then the damage had been done.This type of squatting behavior has already begun. For example, trademark applications have been filed by third-parties to use trademarks for well known brands such as Gucci and Prada for a variety of virtual goods and services. These applications are unlikely to be granted because those brands are so well known that their trademark rights extend far and wide even into the virtual realms. But others are still profiting from brands’ trademarked virtual goods, with third-parties selling clothes featuring the logos of well-knowndesigners.For smaller brands, this land rush to the virtual sphere can be of greater concern. Unlike much larger brands, they cannot rely upon their enormous fame to extend their intellectual property rights in tangible goods to the virtual world. So what are these smaller brands to do? (This problem is similar to the one faced by brands who are slow to register their trademarks in China and are usurped by bad-faith actors who file first in that territory.)The logical answer is that all brands should be filing trademark applications staking out their claims to their intellectual property rights in virtual worlds. Larger brands, such as Ralph Lauren and Nike, have filed applications for their brands in categories such as class 35 – for store services featuring virtual clothing and accessories for use in online virtual worlds – class 41 – for online, non-downloadable virtual clothing and accessories for use in virtual environments, and class 9 – downloadable virtual goods, namely computer programs featuring footwear, clothing, accessories for use in online virtual worlds.The problem, and it is a potentially significant one, is that the U.S. Patent and Trademark Office has not provided any guidance or instruction as to what actual categories of goods or services in its system would match the actual/virtual use that would be provided by the trademark applicant as a specimen of use. So there is a real possibility that these filings would be rejected as being in the wrong class or with an uncorrectable inaccurate description of the goods or services. As was the case with the domain name rush, official trademark law and practice are lagging behind what is happening in the virtual world.Nonetheless, we recommend to our clients to file to protect their trademark assets in the virtual community if, as we expect to be the case, they plan to use their trademarks in that realm in the next 1-3 years. Although there is a possibility that the Trademark Office will find those applications to be inapt or lacking, those defects can often be remedied. Considering the cost of preemptive action versus the cost of potential corrective action, brands should strongly consider filing applications in this realm.Please feel free to reach out to the head of HBA’s Intellectual Property Group Marc Reiner (mreiner@hballp.com) or any other attorney of HBA to discuss this matter further.[/vc_column_text][/vc_column][/vc_row]