Audemars Piguet is preparing to apply its trademarks to NFTs

Audemars Piguet is getting ready to use its branding – including the provenance elements of the Royal Oak bezel – on “non-fungible token (‘NFT’)-based goods, namely downloadable image files containing timepieces and chronometric instruments authenticated by NFTs ,” “downloadable virtual goods,” such as watches “for use online and in online virtual worlds,” and corresponding “store services.” That’s what the Swiss watchmaker revealed in a recently filed response to push back from an examining attorney for the US Patent and Trademark Office (“USPTO”).

The background: Audemars Piguet filed an application for registration for the Royal Oak dial configuration for use in classes 9, 35 and 41 in February 2022. In a non-final Office action in November, USPTO examiner Amanda Galbo took issue with the mark – which AP describes as consisting of “a configuration of a dial together with a bezel having a circular inner shape and an octagonal outer shape with slightly rounded sides together with eight visible screws located at the angles of the octagonal shape and forming an outer ring around the glass on the dial.” The problem, according to the USPTO: The dial “does not indicate the source of [Audemars’] goods and services, to identify and distinguish them from others.”

In particular, Galbo pointed to third-party evidence—including media coverage of a Sotheby’s auction for an NFT-bound watercolor depiction of the original Royal Oak prototype painted by Gerald Genta—with what “appears to be the applied-for mark used in conjunction with [Audemars’] recited NFT goods and related services.” She also highlighted the “Rare Watches Collection” of NFTs, which consists of digital trading cards with images of and information on 100 “digitized watches”, including the Audemars Piguet Royal Oak, which is linked to – and sold via – NFTs.

“Provided that [aforementioned] evidence establishes that the applied-for mark is likely to be perceived by consumers as a feature or element of artwork authenticated by an NFT,” Galbo stated that the Royal Oak frame “will not function to indicate the source of applicant’s goods and services.” and refused registration in accordance with Sections 1, 2 and 45 of the Trade Marks Act.

AP’s response

Counsel for Audemars Piguet filed its response to the Office action this week, stating that “the octagonal bezel mark applied for will effectively function as a trademark to indicate the source of [its] goods and services and to identify and distinguish them from others.” Delving into some of the evidence produced by Galbo, Audemars claims that the Genta example “deals with a single NFT authenticating an original drawing of the first Royal Oak watch.” While the drawing and the NFT were recently sold by Mr. Genta’s widow Evelyne via an auction at Sotheby’s, Audemars Piguet claims it “purchased the drawing, as well as the NFT, and has no intention of reselling them.” Instead, it will “display the drawing and NFT in the company’s museum, where they will certainly serve to indicate the source of [its] goods and services.”

(A copyright/contract side note: AP says the drawing was done by Gerald Genta, whom the company “paid [in 1970] for the Royal Oak clock design and the assignment of the copyright associated therewith [the original watch sketch]. It was a work for hire” – a status that presumably also applies to a number of Genta’s other famous works, including the Patek Philippe Nautilus.)

Regarding its plans to use the mark (the application was submitted on an intent-to-use basis), AP tells the USPTO that it is “preparing to use the applied-for mark in commerce for the goods and services listed in the application— and when it does so, it will use the mark as a trademark, so that the consumer will perceive the frame as a source identifier and not as an artistic feature of the goods.” The watch co. also notes that it “already owns a registered trademark (reg. no. 3480826) for the octagonal bezel… [which it] already uses the frame to indicate the source of its watch-related goods and services.”

As for what those plans actually look like, there’s a chance that AP’s use of the dial — and other trademarks like the Audemar Piguet wordmark and the AP logo — in connection with “downloadable image files containing watches … authenticated by NFT- is” will come hand in hand with its impending pre-owned watch attempt. After all, AP made headlines early this year after CEO François-Henry Bennahmias announced the company’s plans to launch a certified pre-owned initiative, stating that he expects the aftermarket business to be bigger than retail sales of new models. This seems like there could be an opportunity for the luxury watch company to use NFT technology for both provenance and storytelling.

AP may choose to use blockchain technology to verify the authenticity of and/or provide traceability for – and warranty information for – any new watches that it manufactures in the not-too-distant future, and it would not be the first to do so. Blockchain technology enables brands to tokenize assets, ensuring that transactions involving those goods – including purchases, exchanges and trades – are recorded accordingly, which is particularly meaningful given the burgeoning secondary market and the efforts of brands to provide repair/refurbishment services.

It’s also potentially important from an authentication/anti-counterfeiting perspective, as “NFTs can act as a digital record of authenticity and provenance on the blockchain,” Taylor Wessing’s Clare Reynolds stated in a note. “Every sale, trade and owner is embedded in the NFT’s ledger, and the NFT’s metadata can contain a digital certificate of authenticity,”

The bigger picture here’s an increasingly robust second-hand market for luxury goods – watches, included – and companies’ efforts to take a stronger hand in how such pre-owned assets are offered and sold. Analysts predict that the market for used luxury watches will overtake new models over the next ten years, driven in no small part by demand for watches from the likes of AP. LuxeConsult, a Swiss-based industry analyst and consultancy, estimates the market for vintage and pre-owned watches at 79 billion euros ($85 billion) in 2033, more than tripling the 25 billion euros sold in 2022.