NFT Trademark Disputes Test Legal Boundaries in Global Courts

NFTs are testing the limits of trademark law as courts around the world grapple with how to apply traditional intellectual property rules to digital assets. Legal battles have emerged between major brands and NFT creators, highlighting the challenges of defining ownership, brand identity, and consumer protection in decentralized digital markets. These cases underscore a central legal question: when does an NFT infringe on a trademark, and under what conditions can it be considered a legitimate product or artistic expression?

The issue centers on the purpose of trademarks—to prevent consumer confusion by ensuring clarity around the source of a product. This becomes complicated when the product is a digital token representing art, virtual clothing, or a unique identifier on a blockchain. The U.S. legal system, in particular, is relying on existing frameworks to navigate this evolving space. In February 2023, a New York jury ruled in favor of Hermès in its lawsuit against artist Mason Rothschild over his “MetaBirkins” NFTs, which were seen as confusingly similar to the brand’s iconic Birkin bag [1]. The court dismissed Rothschild’s defense that the NFTs were a form of protected artistic expression, labeling him a “swindler” and affirming that digital assets could mislead consumers [1].

Another high-profile case is Nike’s legal dispute with StockX over Vault NFTs, which represent physical sneakers stored by the resale platform. In March 2025, the court partially ruled in Nike’s favor, finding that counterfeit shoes had been sold, but left open broader questions about trademark use in NFTs [1]. Meanwhile, in July 2025, an appeals court reversed a $9 million award previously given to Yuga Labs in its case against artist Ryder Ripps, finding insufficient evidence of consumer confusion from the latter’s NFTs. However, the decision affirmed that NFTs can be considered “goods,” potentially enabling more trademark claims in the future [1].

Globally, countries are approaching NFT regulation differently. The European Union has updated its trademark rules to include virtual goods but requires specific descriptions, such as “virtual clothing,” rather than generic categories like “NFTs.” China has recognized NFTs as a form of protected digital property and enforced liability for platforms hosting infringing content [1].

As the legal landscape continues to evolve, experts emphasize that the key to resolving trademark disputes over NFTs lies in the “likelihood of confusion.” This standard, long used in traditional commerce, is now being applied to digital spaces where brand identity can be more easily replicated or misrepresented. Legal outcomes are shaping the rules on the fly, with courts acting as de facto lawmakers in the absence of clear legislative guidance.

For now, companies are advised to proactively register trademarks for virtual goods and NFTs to secure their brand identity in the digital world. As physical and digital markets continue to converge, the importance of clear legal boundaries will only increase. The ongoing cases involving Hermès, Nike, and Yuga Labs are setting precedents that will influence how brands protect their identities in the metaverse and beyond.

Source: [1] Do NFTs qualify for trademark protection? (https://ambcrypto.com/do-nfts-qualify-for-trademark-protection/)