The metaverse is a collection of immersive digital platforms that allow users to interact with other users and objects through digital avatars. Although there are many questions and doubts about the metaverse, one thing remains certain: The legal system, especially intellectual property laws, is reacting to this new technology phenomenon. Numerous brands and companies, including American Express(r), Zyrtec(r), and Zyrtec(r), are already taking steps to protect their intellectual properties in the metaverse. It is possible to see the mirror of the real world as a digital world. The parallel digital world interacts with and clashes with the real world.
Users can interact, play, and buy products in this virtual reality world. It is a virtual recreation of real life, but in a digital parallel universe. Luxury brands like Gucci, Louis Vuitton and Nike are using the metaverse to reach customers. Users can communicate, transact business, purchase virtual property and transfer digital assets within the metaverse. Many of these interactions can be compared to real-world counterparts. Many of these interactions are analogous to their real-world counterparts.
Securing IP rights
Securing IP rights such as trademarks, patents or copyrights related to the metaverse can often be very similar to securing nonmetaverse IP Rights. The patents that deal with the metaverse typically fall under one of two categories. Hardware for interfacing with the metaverse such as a head-up display to view virtual reality or software that creates a virtual world for users.
Metaverse-related patents require that you meet the same requirements as non-metaverse patents. These include satisfying the patent eligible subject material, sufficiency or disclosure, novelty and non-obviousness requirements in Title 35 of U.S. Code. Even though obtaining software-related patents is more difficult than obtaining hardware-related ones, particularly in terms of subject matter eligibility, these difficulties are not unique to the metaverse. Patent applicants can obtain metaverse-related patents for software using traditional approaches. For example, they could show how the invention improves computer functionality.
Copyright protects original works that are the result of authorship and are written in a tangible medium. Many non-fungible tokens, or NFTs, meet the requirements for copyright protection. They are often used in the metaverse. NFTs, copyrights and the metaverse are important topics to consider. Copyright grants author/owner of copyright a set of rights that includes the right to reproduce, prepare derivative works, distribute, and share the copyrighted work. An NFT acquired by a party that is subject to a copyrighted piece of work should be considered in light of the limitations and rights gained. An NFT is not a right to make copies of the work underlying it.
Copyright law may provide protection depending on the nature and use of virtual assets. Copyright protection may also be available for virtual assets that include images, motion pictures and other dynamic visuals. Expert intellectual property counsel can help you navigate the challenges of implementing takedowns to copyright violations, licensing agreements and royalty collections. This includes those that might arise from this emerging industry.
Trademark rights to be used in the metaverse can be obtained through the United States Patent and Trademark Office, or any other trademark offices around the world. A trademark registration is essential for brand owners to be able to enforce their trademark rights in the metaverse. However, registration can be difficult as you will see with the pending applications. Metaverse-related trademark applications include virtual goods, retail services that feature virtual goods and entertainment that features non-downloadable virtual goods. Although it is relatively easy to handle an identification issue in a pending application in response to an officer action, brand owners who seek trademark registrations for trademarks in metaverse begin to have problems proving use or what was deemed “premature usage” by one USPTO inspector. The USPTO has issued refusals to metaverse/virtual good trademarks on the basis of confusion with marks for physical products, which is encouraging for brand owners. However, trademark registrations for metaverse trademarks are vital. A metaverse-applicable trademark registration is essential for enforcing rights within the metaverse.
Although one may think that a trademark registration for goods or services in the current world might protect virtual representations of those goods and/or services, the law has not yet been settled. It is not clear whether trademark registrations that identify conventional goods or services include virtual assets. This includes digital versions of registered goods and/or services. It is important to file trademark applications that cover digital goods and services in order to protect virtual assets. The metaverse features digital goods and services which fall under International Class 9 (if they are downloadable) or 41 and/or 42 (if not downloadable). It is therefore not surprising that the U.S. has seen an increase in trademark applications directed at digital goods and services. Lululemon(r), for example, has filed trademark applications directing to virtual retail stores, virtual workout classes, and virtual apparel. To extend protection to the metaverse, businesses should file appropriate trademark applications for goods and services.
Enforcement of IP rights
Rights holders may want to enforce their rights once they have IP. How do traditional judicial rights stand up when the underlying IP is connected to the Metaverse, is the key question? While traditional judicial approaches can be used to enforce patents, copyright and trademark enforcement could face unique challenges in the metaverse.
Many threshold issues need to be addressed when a rights holder files suit. These include personal jurisdiction, venue and service of process. These issues might be more important if the rights sought to enforce are related to the metaverse. Personal jurisdiction is the court’s authority over the suit parties and the power to enforce judgments against them. International Shoe states that a defendant must have enough “minimum contact” within a country to be granted personal jurisdiction. Conventional methods of determining minimum contact may be sufficient to determine if metaverse-related patent infringement occurs. Because most metaverse-related patents relate to the technology that enables the metaverse, it is likely to be simple to identify and evaluate infringers within a jurisdiction.
According to 28 U.S.C., venue is the place where a lawsuit can be heard. Venue is often closely tied to personal jurisdiction, and may therefore face similar issues when enforcing metaverse IP. The service of process (or simply “service”) is the act of notifying the other party (e.g. the defendant) of a legal proceeding. Service by mail, personal service and waiver of service are all options. These approaches might not be appropriate for metaverse-related infringing. An accused infringer might not be able to contact someone outside of the metaverse, for example, because it is unclear if there is a correlation between a virtual participant/party in the metaverse with a real-world person/party.
cases involving the metaverse
High-profile cases are already being filed in the metaverse. One example is a lawsuit by Hermes against Mason Rothschild, a digital artist, for creating, selling and using a virtual handbag called MetaBirkin. This handbag allegedly violates Hermes’ trademark rights to its Birkin(r), handbag. Hermes also alleges trade dress and trademark dilution based on the sale of MetaBirkin(r) NFTs. These could sell for as high as $40,000, well within the range of actual Birkin(r). The court in Hermes(r), noted that a traditional trademark analysis would have been more appropriate if MetaBirkin could be used or worn in the metaverse, making it more comparable to an art work as opposed to a commodity. This highlights the importance of trademark protection to those who want to protect their brand from NFT creators.
The First Amendment may be a viable defense in these cases of infringement. If the uses are free expression (e.g. art), then the First Amendment can protect them. AM General (r) filed a lawsuit against Activision Blizzard alleging that Activision Blizzard used Humvee(r), trucks in Call of Duty(r). This was trademark infringement. Activision Blizzard won the case. The court found that Humvee(r), which are used in real-world military operations, has artistic relevance in evoking an atmosphere of realism. Perhaps courts will rule that trademarks can be used in metaverse without the need for a license. This would allow consumers to feel realism and likeness, provided they are not misled. However, this is still to be determined.
Future of IP in the Metaverse
IP looks to have a bright future in the metaverse. This will bring new types of non-traditional trademarks, new products and services that cover a variety of trademark classifications and patentable VR- or AR-related technology. Additional issues may arise when it comes to protecting trade secrets. The establishment of appropriate measures for maintaining secrecy is a fundamental legal requirement to protect trade secrets. However, virtual reality will require new methods beyond the traditional methods of signing nondisclosure agreement or restricting access with biometric technology to keep this secretive. While the metaverse will pose challenges to IP law and IP rights holders there will be significant opportunities for IP to evolve and integrate with the metaverse ecosystem. These new opportunities to adapt will be valuable for IP law and IP rights holders.