The Big Bang Theory: A closer look at IP protection in the metaverse

If the metaverse still feels a bit “other-worldly” to you, spare a thought for brand managers whose universe has undergone a Big Bang. The metaverse is life, but not as we know it. And brand managers suddenly have become first contact operatives.

Consider, for example, trade marks. Trade marks are signs or badges of origin used in the course of trade. They can be things like brand names, logos, slogans, sounds, tunes, colours and so on – in fact, anything that serves to distinguish one undertaking’s products or services from another’s.

It’s just the same when trade occurs in the metaverse. Except that, in the metaverse, trade occurs in connection with virtual products and services, not real ones. And there may be signs or badges of origin in the metaverse – such as melodies, avatars, and names of avatars – that simply do not exist in the real world.

“Victoria’s Secret has started filing blockchain-related trade mark applications, and McDonalds has filed trade mark applications for virtual restaurants.”

This means that trade mark owners may have zero protection for the brands that are important to them in the metaverse. Already, the owners of some of the world’s major brands are filing new trade mark applications to protect their brands in relation to virtual goods and services. For example, Victoria’s Secret has started filing blockchain-related trade mark applications, and McDonalds has filed trade mark applications for virtual restaurants, virtual food and virtual drinks.

Bang!
Brand managers are having to map out afresh the scope of existing trade mark portfolios and, if necessary, file new applications specifically adapted to conducting trade in the metaverse.

Next we have copyright. For things like software, graphical and musical works that form part of the metaverse, copyright protection is clear and no different from normal. However, this is not the case with tokenised works, such as NFTs, that can be purchased in the metaverse.

For these, it’s important that the purchaser of an NFT does not acquire any copyright in the tokenised work on which the NFT is based. If they do, the copyright owner will lose the right to control how the copyright work is used, and it will lose out on royalties.

Bang!
Trade mark and copyright holders need to be especially careful in the metaverse to ensure that the rights acquired by purchasers of NFTs are carefully defined and controlled. What, exactly, does the purchaser of an NFT get?

“There are many issues to do with intellectual property and the metaverse; issues for which there is no legislation or case law.”

NFTs are, of course, an indispensable part of the metaverse because they are the way products and services are tokenised and virtualised. However, the issuance and sale of NFTs raises complex legal issues beyond those relating just to trade marks and copyright. There are issues to do with licensing, smart contracts, ownership, securities, and so on. The law is lagging behind, so extra care is called for.

Bang!
Trade mark and copyright owners should issue their own NFTs for their protected products and services – and copyright works – and offer them in the metaverse. They should avoid situations where others tokenise and sell those things.

Next, there is policing. It is already a huge challenge for trade mark and copyright owners to identify infringements in the metaverse.

Bang!
Probably, the best way to identify infringements in the metaverse of trade marks, copyright and other intellectual property is going to be through technological solutions. In other words, by employing artificial intelligence. I, Robot.

And when it comes to enforcement… Well, let’s just say that identifying infringers who are hiding behind avatars and working out which country’s – or countries’ – laws are applicable in a particular case takes brand managers well and truly into the field of science fiction. Some countries do not yet even have relevant laws.

Bang! Bang! Bang!
In truth, there are many issues to do with intellectual property and the metaverse; issues for which there is no legislation or case law. As a general rule, such issues should be covered off, as far as possible, in the general terms and conditions parts of contracts.

But, in the final analysis, brand managers simply have to be prepared to boldly go where no one has gone before.