Predictions on the Metaverse - an IP perspective

The metaverse is an emerging concept that is rapidly growing in popularity. But speedy growth often means challenges proliferate much faster than solutions can be developed.  

Specialist technology news publisher TechRound offers some predictions from experts on what is to come for the metaverse, including a commentary from Fieldfisher on IP considerations for brands moving into this sphere.

IP in the metaverse:

“We are seeing IP protection in the metaverse being increasingly on the radar of our clients. We have recently advised clients in the sports and gaming industries on trade mark protection covering virtual goods such as virtual clothing.

"Aside from being an additional income stream, it also allows brands to connect with consumers in a different way, for example by browsing a virtual store, or purchasing virtual goods to use in virtual worlds and scenarios that they might not have access to in the physical world.

"In terms of trade marks, the process for obtaining protection is much the same as it is in the ‘real’ world, but the main difference is the relevant Nice Classification (an international classification of goods and services applied for the registration of marks).

"Traditionally, clothing manufactures will have been concerned with Class 25, which covers physical clothing, and retailers Class 35, which covers retail services. Relevant Classes for virtual clothing would be Class 09 (downloadable software), Class 42 (non-downloadable software) and possibly Class 41 (non-downloadable entertainment software).

"This means that if a business that has, historically, only sold physical clothing is thinking of moving into the virtual space, it should review its trade mark portfolio and consider new applications. Getting applications on file would also act as a defensive strategy to avoid being beaten to filing by a trade mark squatter, though of course there would need to be a bona fide intention to use the mark in respect of the goods and services covered.

"The position won’t necessarily be the same in all countries. For instance, China’s IP office, the CNIPA, has recently started rejecting trade mark applications relating to the metaverse in response to an influx of applications. The authorities there have concerns of IP squatting and are taking action to try and control the situation.

"The same basic principles will apply to enforcing IP protection in the Metaverse as in the real world, which is a point that isn’t always considered by those that are creating virtual content. For instance, we all know that if you were to take a physical shoe then make and sell an exact replica of it, you would likely be infringing several IP rights.

"It is sometimes difficult to appreciate that the same would be true in the virtual world. Creating a virtual replica of an item of clothing to use on an avatar could still infringe third party IP. Hermes is currently taking action against a digital artist in the US over virtual bags inspired by its famous Birkin bags.

NFTs are becoming increasingly popular as a means of establishing genuine virtual goods. NFTs enable information such as authenticity, history of ownership, the scope of any relevant rights attaching to the content and other important information to be embedded within the virtual product, which means that rights owners can easily differentiate genuine items from fakes.

"On the other hand, ownership of an NFT doesn’t necessarily also mean ownership of the underlying IP and it is possible for anybody to mint an NFT, so care must be taken to fully understand the scope of rights bundled into the NFT.

"It seems unlikely that there will only ever be a single metaverse. It is more likely that a number of competing metaverses will emerge in much the same way that there are now several competing video game platforms. Users are likely to demand cross-metaverse interoperability, so care must be taken by rights owners who grant licences to virtual content to carefully define the scope of the licence “territory”.

"For now, traditional policing techniques such as watching services and regular online sweeping seem the favoured approach, but we also expect to see new and innovative techniques and technologies (eg AI-based solutions) emerging to tackle ever more sophisticated virtual infringements.

"Jurisdictional questions are surely going to arise as parties try to establish “where” an infringement took place, where the infringer is located and where the appropriate place to bring proceedings is. Time will tell how these issues are best dealt with.”