Web3, the promising decentralized iteration of the blockchain-based World Wide Web, presents a unique opportunity for fashion brands to provide consumers with physical and digital experiences. Creating phygital experiences provides fashion brands with the powerful opportunity to merge the physical and the digital, leading to enhanced consumer experiences.
These emerging phygital fashion innovations were on full display during the 2022 New York and Paris Fashion Weeks. During these Fashion Weeks, some brands showcased developments in the fictional fashion space and gave the industry a glimpse. of what the future will be like when Web3 technologies and fashion combine.
Unsurprisingly, along with the proliferation of innovation in this space, there has been a great deal of activity in the United States Patent and Trademark Office by brands seeking to protect Web3’s hot innovations with patents and trademarks. . Along with this, there has been a rise in questions about the extent to which existing fashion trademarks are protected on Web3.
Recent Web3 Innovations in the Fashion Industry
During the 2022 New York and Paris Fashion Weeks, designers brought Web3 to the runway. This year, popular brands such as Puma SE (“Puma”), Pierre Balmain SA (“Balmain”), Prada SpA (“Prada”), and Gucci SpA (“Gucci”) incorporated non-fungible tokens (NFTs) into their Presentations of the fashion Week. For background, NFTs are unique digital assets that exist on the blockchain. NFTs can be linked to digital items such as avatars, digital art, or music. An NFT can also be linked to a physical object or provide the NFT owner with access to real life experiences. Linking NFTs to various digital and physical items provides a person with immutable proof of ownership. Taking advantage of the different features and utilities that NFTs offer, fashion brands are beginning to take advantage of NFTs to offer consumers unique experiences, limited edition items, and special membership programs.
Balmain’s new membership club, “The Balmain Thread,” is one of the most talked about NFT offerings of Paris Fashion Week. By partnering with minting platform MINTNFT, Inc. (“MINTNFT”), Balmain became the first fashion house to create an NFT-based membership program. During the Balmain Festival event at Paris Fashion Week, attendees were able to access and join the Balmain Thread using their mobile devices by taking photos and minting these photos on the blockchain. Using a mobile app called “The Moment”, attendees captured photos at the event and turned them into unique digital collectibles on the blockchain. Recognizing the future of phygital experiences in the fashion industry, Balmain CMO Txampi Diz commented: “[w]We are excited about the future ahead as the physical and digital continue to merge, offering us new ways to introduce this house to a wider audience, as we build on Olivier Rousteing’s determination to further democratize fashion.” .[1] James Sun, CEO and Co-Founder of MINTNFT, further commented on the future opportunities that Web3 will present to the fashion industry, stating: “[w]We believe that Web3 will drive a new wave in engagement, enabling companies to unlock access and deliver richer experiences for their communities than ever before.”[2]
The Balmain Thread is not Balmain’s first foray into the Web3 Space. In 2021, Balmain launched an NFT for a pair of digital sneakers and paired each NFT with a physical version of those sneakers. Balmain also paired the NFT sneakers with VIP experiences, including personal training sessions with a celebrity trainer. Additionally, earlier this year, Balmain collaborated with Mattel to launch a Barbie x Balmain collection that featured more than 50 physical clothing and accessories, as well as a limited edition Barbie x Balmain NFT.
Figure 1: Barbie X Balmain NFT (Photo: MINTNFT)
During New York Fashion Week, Afterpay US Services, LLC (“Afterpay”) presented its “New York Fashion Week Highlights” collection. To create this collection, Afterpay partnered with five fashion designers: Altu by Joseph Altuzarra, anOnlyChild, Jonathan Simkhai, Kim Shui and The Blond, each of whom designed a limited edition NFT key. Each designer’s NFT featured a unique digital collectible paired with either a limited-edition physical product or an exclusive New York Fashion Week experience. For example, Altu by Joseph Altuzarra paired her key with a special edition tote bag or membership to one of New York’s art museums. The key to the Blonds came with an invitation to the Blonds’ New York Fashion Week after-party or a signed copy of the designer’s upcoming book.
Figure 2: Altu by Joseph Altuzarra’s NFT Key Photo (Photo: Afterpay)
In March, New York and Paris Fashion Weeks were joined by a digital counterpart, “Metaverse Fashion Week” held on Decentraland, a decentralized virtual reality platform.[3] Metaverse Fashion Week included runway shows and events showcasing both “traditional” and digital fashion brands. Like New York and Paris Fashion Weeks in 2022, Metaverse Fashion Week offered fictional experiences by providing consumers with the “physical twin” of a digital item.
Protection of Web3 innovations in the fashion industry
As the fashion industry makes more and more use of Web3 technologies, there are more risks and opportunities with respect to the intellectual property protections that cover these innovations. Nike, Inc. (“Nike”) has been active in the patent space, with several issued patents covering systems and methods for registering sneakers on the blockchain as an NFT token. Nike’s patents correspond to its product called Cryptokicks, which replicate Nike’s famous “Dunk” design. For example, one of Nike’s pending patents, US Patent Application No. 17/699,152, even covers video game integration for Cryptokicks and future Nike NFTs. Here is a representative claim from that patent:
A method of integrating a cryptographic digital asset into a digital software application, the digital software application including code which, when executed, displays a character avatar on a screen associated with a user device, the character avatar is controlled operatively by a user through the user. device, understanding the method:
receive a digital asset identification (ID) code, the digital asset ID code existing together with a unique owner ID code in a distributed blockchain ledger, the digital asset ID code including a segmented code string in a plurality of code subsets, wherein a first plurality of the code subsets includes data indicative of a plurality of attributes of the digital asset;
displaying the cryptographic digital asset on the screen, wherein the cryptographic digital asset comprises a virtual object having an appearance that is based on the first plurality of code subsets of the digital asset identification code, the virtual object further including a plurality of object attributes; Y
modifying at least one of the object’s attributes in accordance with an aspect of the digital software application or the interaction between the character’s avatar and the virtual object.
As more brands continue to take advantage of Web3 phygital opportunities and position themselves in the market, patent filings in this space are sure to grow. Companies operating in this space should definitely consider filing patents to protect their technologies, while also being aware of third-party patents and the relevant patent overview.
Similarly, companies must protect their Web3 trademarks through federal trademark registrations. Among other things, federal registration gives trademark owners national protection to businesses, as opposed to the location-specific protection afforded to common law trademark rights. Additionally, a federal trademark registration provides better options for damages, deters potential infringers, and limits the potential defenses an alleged infringer may make in a future dispute of entitlement.
The Hermes International SA (“Hermes”) “MetaBirkin” case has served as a cautionary tale for many brands, underscoring the importance of Web3 brand protection for fashion brands.[4] In January 2022, Hermes sued artist Mason Rothschild for trademark infringement of his iconic Birkin bag through Rothschild’s creation and sale of a virtual version called “MetaBirkins NFT.” Although this case is still pending, the Hermes “MetaBirkin” case caught the attention of many brands and led to an increase in Web3 trademark registrations. For example, this year Gucci and Nike have filed trademark applications to protect their brands in the metaverse.
Digital fashion also presents brands with new opportunities in the copyright space. Traditionally, physical clothing has faced a hurdle in obtaining copyright protection because physical garments are considered “useful items.” However, the digital counterparts of these items are 3D designs and would most likely be considered a pictorial or graphic work under Copyright Law. So digital clothing may not face the same hurdle because these items lack the “functionality” found in physical clothing. Brands that have previously failed to obtain copyright protection for their physical products should consult with their intellectual property advisor to determine if there is a way to seek copyright protection in the digital world.
Fashion brands looking to expand into the Web3 space will continue to seek patent, trademark, and copyright protections for these innovations. With Morgan Stanley estimating that digital demand for fashion and luxury brands could reach $50 billion by 2030, ensuring intellectual property protection for phygital fashion designs and experiences will only become more important.[5] It is best for such brands to consult with their intellectual property advisor early in the process of developing and implementing these innovations to maximize protection and leverage. Likewise, brands that have no immediate plans to venture into the Web3 space should do the same to avoid a situation similar to the one presented in the MetaBirkin case.
[1] https://www.businesswire.com/news/home/20220927005479/en/MINTNFT-Announces-Industry-First-NFT-Based-Membership-Program-for-Balmain-During-Paris-Fashion-Week
[2] https://www.businesswire.com/news/home/20220927005479/en/MINTNFT-Announces-Industry-First-NFT-Based-Membership-Program-for-Balmain-During-Paris-Fashion-Week
[3] https://metaversefashionweek.com
[4] Hermes International v. Mason Rothchild, Case No. 1:22-cv-00384 (SDNY).
[5] https://www.reuters.com/article/global-luxury-metaverse-idCNL8N2S73MG
Source: news.google.com