Confusion in Trademarked NFTs

The recent rise of the blockchain based technology of non-fungible tokens (NFTs) hasalready led to a number of lawsuits where NFTs are alleged to infringe trademarks. These caseshave generally centered around the inquiry of likelihood of confusion, as most trademark casesdo, but have also raised disputes as to the First Amendment and first sale doctrines and theirrelation to the likelihood of confusion inquiry. This article will discuss three such cases in detail,and draw some general insights about the likelihood of confusion inquiry and its interactionwith these other doctrines, as well as make some more specific recommendations as to howthese doctrines should be applied in the newer context of NFTs.One of the primary recommendations of this article will be that courts should generallyconsider whether the alleged confusion would likely increase the amount that consumerswould pay for the product at issue, particularly when evaluating survey evidence of actualconfusion. Specifically with respect to NFTs, this may be especially likely to be the case becausethe value of NFTs is almost entirely based on “clout.” But when a true parody is at issue, thismay be less likely, as consumers may not particularly care whether the parody was authorizedby the brand that is being ridiculed. Alleged confusion that will not tend to affect consumerpurchasing decisions should generally be discounted or at least given less weight.Another more general recommendation will be that likelihood of confusion should beconsidered a question of law based on underlying facts, which is surprisingly contrary to thecurrent approach of a majority of circuit courts that currently view the question as one of fact. This article also considers when the First Amendment based Rogers doctrine might apply toNFTs in light of the recent but limited guidance from the Supreme Court in Jack Daniel’s v. VIPProducts, and makes recommendations as to how courts should approach the doctrine when itdoes apply. As for the first sale doctrine, this article argues that it should generally not protectNFTs linked to physical products, as the NFTs should generally be considered separate productsand evaluated under the standard likelihood of confusion analysis