Digital Fashion & NFTs – IP Rights

As the digital fashion industry booms alongside the rise of Non-Fungible Tokens (NFTs), questions around intellectual property (IP) ownership, licensing, and legal enforcement are more pressing than ever. Digital garments at first only used in the gaming sphere are now traded on blockchain platforms, worn in virtual environments, and even showcased on social media and virtual runways. With this evolution comes the need for legal clarity, especially for designers, platforms, and consumers based in the UK.

Ownership and Licensing of Digital Designs

At the core of digital fashion lies the concept of digital ownership. Unlike physical garments, digital fashion pieces are often linked to NFTs, which serve as a certificate of authenticity. However, owning an NFT does not automatically grant the buyer IP protection by way of copyright or design rights to the digital item. It is important to keep in mind that ownership of an NFT does not equate to nor necessarily imply ownership of the underlying associated IP.

For designers and brands, clearly defined licensing agreements are essential to protect and monetise their digital creations. Waterfront’s IP London Solicitors can help draft robust agreements that specify usage rights, royalties, and dispute resolution mechanisms in the event of unauthorised use.

Trade Mark Protection in the Virtual World

As fashion brands move into the metaverse, trade mark protection has become even more important.  Many major fashion brands have filed UK and EU trade marks specifically for virtual goods and services under class 9 of the Nice Classification System. These trade marks help prevent misuse of brand identity in digital marketplaces, gaming environments, and on social media.

Waterfront’s Trade Mark Solicitors can assist in registering trade marks that cover virtual apparel and related NFTs under UK IPO guidelines. Given the jurisdictional challenges of digital platforms, brand owners should also consider international protection.

AI, Digital Fashion, and IP Challenges

AI is playing a growing role in how designers generate digital fashion designs. While AI can accelerate creativity, it raises legal questions about authorship and ownership. For instance, if an AI system designs a digital outfit, who holds the IP rights? The Copyright, Design and Patent Act 1988 s9(3) states that the person making arrangements for the AI’s creation may be considered the author, but this area remains legally grey.

Working with Waterfront’s AI London Solicitors can help navigate this emerging terrain and prepare for future legislative updates on AI-generated works.

Enforcement and IP Litigation

Enforcing IP rights in the metaverse and NFT marketplaces poses unique challenges. Jurisdictional ambiguity, anonymous infringers, and decentralised platforms can make it difficult for traditional legal remedies to hold any weight. However, UK courts are increasingly recognising digital assets and have issued injunctions and asset freezing orders in NFT-related disputes. In one instance the UK High Court recognised NFTs as legal property and granted an injunction against “Persons Unknown” to freeze stolen NFTs allowing the claimant to pursue the misappropriated assets and require the third party (OpenSea) to disclose information about the fraudsters.

Waterfront’s experienced IP Litigation Solicitors can advise on enforcement strategies, including takedown notices, on-chain solutions, and litigation where necessary. Proactive monitoring and swift legal action are critical to preserving brand integrity in the digital space.

Conclusion

The fusion of fashion, NFTs, and the metaverse creates exciting opportunities as well as complex legal risks. Whether you’re a designer, brand owner, or platform operator, legal guidance is essential in navigating the new digital sphere. Consulting one of Waterfront’s specialist IP London Solicitors ensures that your rights are protected and your digital strategy is well thought out.