Trademarks without Bodies: Rethinking Infringement Standards for Digital Replicas of Branded Physical Products

Author: Iffat Zehra, St Joseph’s College of Law

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INTRODUCTION

A new class of goods, namely, near-perfect digital replicas of genuine branded objects has emerged due to the rise of virtual markets, NFTs, and metaverses. Consumer goods, handbags, and sneakers, among others, could be 3D-scanned and sold, resold, and displayed in virtual space, detached from the real-world marketplace, where the trademarks and designs behind them have entered commerce. The very existence of such digital goods challenges intellectual property (IP) law’s foundational assumption, according to which a mark is inherent in the object via its distribution in a tangible channel of trade. The central question concerns the very applicability of trademark, design, and copyright protection to virtual replicas, where the reproduction of a mark or design occurs with no material goods changing hands.

By focusing on the recent US litigation jurisprudence, with a brief comparison to India’s trademark law, this essay will demonstrate how recently emerging virtual goods challenge the applicability of trademark and design protection to virtual goods. The essay will argue that while courts have shown willingness to apply trademark law to virtual replicas, the fit is not perfect, and further clarifications are needed for both the categorization issue and the expressive defense.

The article will begin by describing the phenomenon of virtual replicas and their imprint on current trademark/IP law debates. It will proceed to discuss how trademark law has addressed the application and enforceability of traditional trademark remedies in the context of virtual goods. The essay will then demonstrate how design law has been used to restrict such unauthorized digital replicas. The essay will conclude by analyzing the US case law on the application of trademark law to virtual goods and the need for further clarifications in the law on virtual goods.

Digital Replicas and the Applicable Intellectual Property Frameworks

At least three overlapping regimes are typically involved in the case of a digital counterfeit of branded goods. First, if the replica confuses the source of a genuine good, especially the registered word mark, logo, or trade dress, trademark legislation is applicable. Second, if the counterfeit copy imitates the design of the goods with a registered industrial design, design laws may apply. Third, while most consumer goods are not protected by copyright laws, as they are utilitarian and therefore not considered as artistic works, copyright may sometimes be relevant if the replica is a copy of an artistic or three-dimensional work (Anon., n.d.).

Trademarks relating to “downloadable virtual goods” and other services provided in virtual worlds are now being actively accepted by trademark offices in several jurisdictions, including the United States Patent and Trademark Office, which recognizes the tarnishment and dilution of the mark’s reputation. While virtual or digital goods are not explicitly mentioned in India’s Trade Marks Act, 1999 (Anon., n.d.), the Act’s wide interpretation of “goods” in Section 2(1)(j), combined with the trans-border reputation doctrine enshrined in the law by the Hon’ble Supreme Court in N.R. Dongre v. Whirlpool Corp., (1996) 5 SCC 714, is likely to provide protection to a foreign trademark which has acquired a secondary meaning in the Indian marketplace, even if it is not formally registered under the Trade Marks Act, 1999 (N.R. Dongre v. Whirlpool Corp., (India), 1996).

Trademark Limitation and Limits of Roger Test

Litigation between luxury and sportswear companies and unauthorized NFT copycats’ producers yields the most interesting cases. In Hermès International v. Rothschild, (Hermes Int'l v. Rothschild, No. 1:22-cv-00384 , 2022), the famous French company filed a suit against an artist who had created a series of NFTs called “MetaBirkins” and put them on sale. Each of the tokens had a fuzzy image of a Birkin bag. According to the Rogers test, established in Rogers v. Grimaldi (Rogers v. Grimaldi, 875 F.2d 994 , 1989), trademark infringement by a work of art, which incorporates the protected mark, is not actionable if the use of the mark has some artistic value or does not confuse consumers about the source of the work. Nevertheless, the jury found the defendant guilty of infringement, dilution, and cybersquatting in this case and awarded the plaintiff around $133,000 in damages. Even though the artist used the source of inspiration in a purely artistic context, the name and images of the Birkin bag were a source of identification for a commercial good. (Anon., n.d.) (Nike, Inc. v. StockX LLC, No. 1:22-cv-00983 , 2022)

Nike, Inc. v. StockX LLC, No. 1:22-cv-00983 , is a Stock X case about the “Vault NFT,” where digital tokens encapsulated the images of Nike sneakers and represented claim tickets to the real sports goods held in the Vault. Nike accused StockX of featuring unauthorized works of art, whereas the defendant claimed that their use of the plaintiff’s trademarks was an expression of nominative fair use. StockX’s argument was that the Vault NFTs did not feature counterfeits but instead used Nike’s logos to identify the goods they resold in good faith. The issue of the StockX case differs from the Hermès litigation because it features a trademark infringement case with nominative fair use as a defense, in contrast to the lack of protection for trademarks in digital assets. Nevertheless, the central problem was whether the unauthorized reproduction of a trademark in the NFT constitutes a nominative use of a registered mark or merely passes off of the author’s goods for the mark’s owner. (Anon., n.d.)

The use of a registered trademark in the creation of a digital replica of a good was significantly narrowed by the Jack Daniel’s case. In Jack Daniel’s Properties, Inc. v. VIP Products LLC, (Jack Daniel's Props., Inc. v. VIP Prods. LLC, 599 U.S. 140 , 2023), the Supreme Court ruled that the Rogers test is inapplicable when a defendant uses a mark as a source indicator for its goods, even if its work incorporates an independent artistic expression. Lower courts have found in both cases that the unauthorized use of a registered trademark in a digital asset constitutes trademark infringement unless the defendant can prove that its use of the mark was an expression of its artistic work. However, according to Jack Daniel’s case, once the defendant uses the plaintiff’s mark to identify the source of its goods, it cannot invoke the Rogers test. From now on, when the digital replica is used as a source of identification for the author’s goods, a standard likelihood of confusion analysis will apply.

Design Protection and the Question of Copyright Ability

Design law appears as the more logical method of protection when a digital reproduction replicates a product's unique three-dimensional configuration, rather than its word marks. Shape and configuration applied to a product are often protected by India's Designs Act, 2000 (Anon., 2000) and the more general framework that comprises the TRIPS Agreement, arts. 25-26, as long as the design is novel and has not been previously disclosed. (Anon., Apr. 15, 1994,)Within a system that has traditionally relied upon registration for manufactured goods, a wholly digital reproduction that has never been applied to a physical item within the relevant jurisdiction stands oddly. A digital replica of a sneaker's sole unit, for example, is unlikely to gain copyright protection, even though the replica itself (as a digital 3D model) may independently constitute an original artistic work created by its maker. This is due to the fact that most functional consumer products do not meet the requirement for separability between artistic and utilitarian elements.

Comparative Note on the European Approach

In accordance with the updated examination practice as of 2023, the European Union Intellectual Property Office also began accepting trademark applications for virtual goods and NFT-registered items following a particular classification approach (Anon., 2023). Notably, EUROPMO classifies “virtual goods” and “non-fungible tokens” as a separate sub-category of class 9 and not as part of the broader class that encompasses the actual goods that the virtual items represent. This classification practice is at odds with the approach of the Indian trademark law system, as well as the previously used United States practice, where trademark applicants had to rely on generic descriptions or attempt to classify virtual products in classes that correspond to real goods. In this regard, the EU approach is notable because it highlights the ability of trademark registries to be more dynamic and adaptive than the judiciary system. In particular, it reduces the potential number of trademark conflicts that require resolution through infringement litigation; however, it does not entirely eliminate the more complex set of infringement-related concerns identified earlier.

Discussion and Critical Evaluation

This article reveals three gaps. First, the courts are forced to interpret beyond the original terms, which dilutes the creation of a new norm, since most trademark and design laws (such as India’s Trade Marks Act and Designs Act) do not contemplate dematerialized goods when defining “goods” and “article.” Second, the application of nominative rights and first-sale doctrines to the case in which resale of a digital token rather than a good occurs is unclear, as the Nike-StockX situation has not yet ruled on the tethered/untethered dichotomy. Third, although the Jack Daniel’s precedent illustrates clearly that no First Amendment defenses are available in source-identifying cases, there are gray areas in which a digital replica straddles between being an expressive and source-identifying work, as in the case of branded skins in video games and fashion in social virtual worlds.

The proposed solution would have two components. To grant rights holders legal protection beyond the analog extension of trademark/design laws, a separate category of virtual/digital-replica goods should be created, as the USPTO already began doing for patents. Courts, on the other hand, should use a uniform test that looks past the medium to the message, specifically, whether the digital replica is marketed and perceived as an indicator of the source of a different digital product. By applying Jack Daniel’s logic, this approach would allow for certain nominative and expressive uses of trademarks while still providing protection to the rightful owners. An Indian court, for instance, which has previously used the trans-border reputation of N.R. Dongre in passing off cases, can determine if the digital replica marketed to Indian consumers is likely to damage the goodwill associated with the protected trademark by being mistaken for the goods of the proprietor. The same assessment would apply to other jurisdictions, with the difference that they would not need to create a separate category of virtual goods for trademarks and designs to have the same legal standing as physical ones.

Conclusion

Trademark, design, and copyright laws, none of which were designed with dematerialized items in mind, intersect with digital copies of branded physical objects. While courts are often willing to apply well-established theories of infringement and defense to virtual copies, as demonstrated by some recent US litigation, resulting jurisprudence is far from a cohesive body of law, particularly in the context of tethered and untethered digital goods. As digital markets evolve, other jurisdictions such as India - whose laws are also silent on virtual products - will likely face the same interpretive challenges. The only way to achieve doctrinal coherence in this rapidly developing area of law is through legislative definition of virtual goods as a separate registrable category and a constant judicial focus on source-identifying function. The costs of ignoring these issues will be high for both legitimate digital creators who currently lack a clear benchmark for when their work crosses the line between expression of infringement and rights holders, who may find their brand value sullied as virtual marketplaces gain in commercial significance.

References

1. Trade Marks Act, No. 47 of 1999, 2(1)(j), India Code ,1999.

2. N.R. Dongre v. Whirlpool Corp., (1996) 5 SCC 714 (India).

3. Hermes Int'l v. Rothschild, No. 1:22-cv-00384 (S.D.N.Y. filed Jan. 14, 2022) (jury verdict Feb. 8, 2023).

4. Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989).

5. The Fashion Law, Hermès and Rothschild's MetaBirkins Fight Heads to the Second Circuit, https://www.thefashionlaw.com/hermes-and-rothschilds-metabirkins-fight-heads-to-the-second-circuit/ (last accessed Sept 27 2026).

6. Nike, Inc. v. StockX LLC, No. 1:22-cv-00983 (S.D.N.Y. filed Feb. 3, 2022).

7. World Trademark Review, Nike Sues Retail Platform Over NFTs in Potentially Precedent-Setting Case, https://www.worldtrademarkreview.com/article/nike-sues-retail-platform-over-nfts-in-potentially-precedent-setting-case (last accessed on Sept 27 2026).

8.Jack Daniel's Props., Inc. v. VIP Prods. LLC, 599 U.S. 140 (2023).

9.Designs Act, No. 16 of 2000, India Code, 2000.

10.Agreement on Trade-Related Aspects of Intellectual Property Rights Arts. 15–21, 25–26, Apr. 15, 1994, 1869 U.N.T.S. 299.

11.European Union Intellectual Property Office, Guidelines for Examination of European Union Trade Marks, pt 3.4 (Virtual Goods and NFTs), 2023

 12. Copyright Act, No. 14 of 1957, India Code, 1957.