Exclusive: Key Insights from 3,200+ NFT Patents

I spent 20+ hours analyzing more than 3,200 NFT-related patents to find out what major consumer brands are up to. Some findings were quite surprising. Here are the results.

hey, it’s Marc.

Welcome to another data-driven deep-dive. Today we take another close look at NFT-related patents from all the major brands to find out what might hit the market soon.

Spoiler: The patent market is hot. In just the last four weeks, companies such as Nike, Snap, PayPal, Salesforce, Starbucks, Google, and others have filed revealing NFT-related patents. This has prompted me to make a second, deeper analysis following my previous one.

Before we jump into the findings, a word of caution:

• Patents ≠ Innovation. Our patent system has flaws, like encouraging patent trolls and limiting idea-sharing.

• Only a small share of these patents ever materialize into real products.

Still, patents offer valuable insight. By studying them, we glimpse what large brands might be plotting for the future. That's what this analysis aims to show.

Ready? Let’s go.

⏱️ Reading time: 4min

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Key Findings

Before we look at individual brands, some key findings:

• Number and growth of patents: NFT-related patent applications have skyrocketed in 2023, far exceeding previous years. In 2023, brands filed 14x more patents than in 2020, 7x more than in 2021, and almost double the number in 2022.

• Geographical distribution: The United States leads the way in NFT patent applications, followed by international filings through the World Intellectual Property Organization (WIPO). Other notable countries include Canada, Europe, South Korea, India, Australia, and Japan.

• Thematic trends: A growing trend in NFT patents involves "phygitals," physical products linked to NFTs. Brands like Mercedes-Benz, Ferrari, Nike, Adidas, and eBay are actively pursuing this.

• Under-the-radar moves: Some of the brands on the list have not yet publicly announced any Web3-related projects (e.g. Dell, Dropbox, Nokia, Western Digital, etc.)

• Leading the pack: Bank of America, PayPal, Nike, Sony, and Snap top the all-time NFT patent charts. 

• Nike's early entry: Nike had its eyes on Web3 as early as 2019, dominating patent applications in 2020. For more, see my Nike case study.

A Glimpse Into the Future

Reading through the patent applications felt like looking into a crystal ball. Let’s explore some of the most noteworthy patents filed in recent months.

Nike 👟

Nike has recently been granted several patents that outline plans to connect physical products (“real-world products”, as they call it in their filings) with virtual collectibles to unlock new consumer experiences.

Nike frequently speaks about "controlled scarcity", explaining that it enhances the value of products and combats counterfeiting.

Let’s look at some key themes.

Phygital Experiences

A key quote:

“Purchase of an authentic, tangible pair of shoes may enable or “unlock” a corresponding cryptographic digital asset and a digital shoe associated with that digital asset.“ Link

These experiences include:

• Lotteries: Lotteries that reward sneaker buyers with digital collectibles in Nike’s SNKRS app.

• Digital twins: Consumers can buy a physical shoe in a store and unlock its digital collectible. Users connect their wallet to the physical shoe using a "KickID" connected to a visual or electronic tag (RFID or NFC).

• VR experiences: Customers can have in-store VR experiences, searching for digital sneakers using their smartphones (so called “hunts”).

• Co-creation & breeding: Collabs & Breeding: Customers can "breed or mashup" two digital sneakers to create a unique sneaker "offspring." They can vote for the best designs, which Nike will then produce commercially.

• Product evolutions: Product evolutions allow users to care for digital products like pets, i.e. “feed, clean, entertain and care for them”, and unlock new attributes and real-life versions. Nike also mentions “selectively-lockable, dynamic” evolutions of products.

• Token-gated experiences: Owning an NFT can give users extra perks like physical items and special opportunities. Users might get early tickets or special virtual or mixed reality experiences. Users could also get access to exclusive sales.

Web3 commerce

Nike plans to let users trade, sell, lease or license digital products. They discuss how these transactions happen in a specialized app and auction sites for sneakers.

Video Games

Nike plans to make its digital products available for video games. The rarity of a digital product would affect a player's abilities in the game.

Relevant patent applications:

• “Systems and Methods for Provisioning Cryptographic Digital Assets for Blockchain-Secured Retail Products” – 16.11.2023. Link

• “Event-Based Distribution of Cryptographically Secured Digital Assets” – 02.11.2023. Link

• “Cryptographic digital asset architecture with selectively-lockable dynamic evolution” – 26.10.2023. Link

Adidas 🧢

Adidas, like Nike, is interested in using phygitals in their brand ecosystem.

Adidas phygital activation.

Adidas speaks about connecting digital assets with real-world products within a brand ecosystem. These digital assets can update dynamically based on how consumers use them (cf. xNFTs, a new type of programmable token standard). They can also update based on the features of the physical products they represent.

Relevant patent applications:

• “Activation architecture for processing digital assets and related physical products” – 19.4.2023, Link

Snap 🟡

Snap has filed 23 NFT-related patents in total, 8 of them over the last 6 months. Its latest applications focus on various forms of augmented reality (AR) experiences for NFT-fashion items or AR-shopping. These applications could be linked to Lens Studio, Snap’s augmented reality platform.

Snapchat also plans to enable users to connect their crypto wallets to an app, allowing them to use their NFTs as avatars or backgrounds in video calls.

They also mention virtual unboxing experiences in which boxes could contain NFTs.

It’s not hard to imagine that users will be able to wear fashion NFTs from popular brands on Snapchat and other AR experiences.

Snapchat virtual unboxing experience.

Relevant patent applications:

• “Augmented reality unboxing experience” – 16.11.2023. Link

• “User assumption of identity of NFT in crypto wallet” – 06.07.2023. Link

• “Customized virtual store” – 15.06.2023. Link

Disney 🏰

Disney envisions a loyalty ecosystem, in which NFT holders would be able to redeem their NFTs across different companies (cf. “interoperability”) seamlessly, and thus access token-gated events, content or other experiences. Link

Disney filed a patent for token-gated experiences and another for NFT-based card games with evolving attributes.

Last week, Disney launched collectable pins together with Dapper Labs. The pins feature Disney, Pixar, or Star Wars characters – a classic NFT use-case of monetizing brand IP. The next step: token-gate experiences to pin holders.

Relevant patent applications:

• “Systems and methods to manage digital asset functionality based on fulfilment of criteria” – 09.11.2023. Link

• “Distributed asset redemption” – 21.09.2023. Link

• “Systems and methods to facilitate game unit management with a smart contract responsive to battles involving the game units” – 27.04.2023. Link

Other Notable Patent Applications

Bulgari 💎

Bulgari is also tinkering with phygitals. Previously, they worked with the Aura Blockchain Consortium to launch a collection of Serpenti Forever handbags. These bags include digital product passports that let owners trace the bags’ histories and unlock experiences.

• “Method for managing rights associated with an object" – 21.09.2023. Link

Sony 🕹️

Sony focuses on in-game digital assets and making them compatible across various games.

• "Automated tracking of earned in-game actions for granting an NFT backed digital asset" – 22.06.2023. Link

• “Tracking and processing history data of a NFT-based digital asset” – 08.06.2023. Link

• “NFT framework for transferring and using digital assets between game platforms” – 16.03.2023. Link

• “In-game asset tracking using NFTs that track impressions across multiple platforms” – 09.02.2023. Link

Google 🔍

• “Customizing a browser application with blockchain data” – 16.11.2023. Link

• “Connecting an application with a digital asset holder to process a blockchain transaction” – 16.11.2023. Link

• “Managing blockchain transactions” – 16.11.2023. Link

Twitter/X 🐦

• “Associating land NFTs with digital representations of land parcels” – 16.11.2023. Link

Dell 💻

Dell patented a system to authenticate metadata associated with an NFT. They focus on the enterprise data and file management.

• “Method and system of NFT validation in a broker marketplace" – 19.10.2023. Link

Western Digital 💾

Will we soon see hardware wallets from Western Digital?

• "Management of storage devices utilizing non-fungible tokens" – 02.11.2023. Link

Bank of America 🏦

• “Cryptocurrency exchange platform” – 9.11.2023. This platform includes NFTs. Link

• “Digital asset transfers in a virtual environment based on a physical object” – 9.11.2023. Link

J.P. Morgan 💸

• "Systems and methods for frictionless payments in web3 and the metaverse" – 02.11.2023. Link

Mercedes-Benz ⭐️

Mercedes-Benz is looking at using NFTs to store proof of ownership, usage rights, and/or properties of a vehicle. Phygitals for cars?

• "Method for minting and using vehicle-related non-fungible tokens, and information technology system" – 31.08.2023. Link

Ferrari 🚗

• “An automotive competition method for having at least a first real road vehicle and a second virtual road vehicle race with each other” – 14.09.2023. Link

Smaller brands

Some smaller brands applied surprisingly often. I encourage you to take a look at them:

• Utopia Music: A Swiss Music fintech company.

• Block, Inc.: Jack Dorsey’s blockchain company.

• Artema Labs, Inc: A NFT creation studio.

• Mythical, Inc.: A Web3 gaming company.

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Going Deeper

If you want to dig in deeper, you can find detailed data in this Google Sheet. It lists all NFT-related patent applications up to Nov 18, 2023, from the World Intellectual Property Organization.

Look for the rows highlighted in yellow for applications from major brands like Goldman Sachs, Coinbase, Canon, Casio, Intel, Mastercard, Meta, Salesforce, Samsung, Shopify, and others.

I hope this is helpful. If yes, please spread the word! This helps me a ton.

That’s it for now.

– Marc

PS: If this was helpful, please share it with your community or consider pledging a future subscription! 🙏 This helps in growing dematerialzd.xyz further.

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