As organizations prepare for a future with and in the Metaverse, there is a growing emphasis on the legal concerns, particularly intellectual property rights for trademark, and patent owners in Metaverse trade.
Failure to comprehend intellectual property rights in a virtual environment can increase risk for IP holders, vendors, or purchasers. So, what can (and should) intellectual property rights holders do? This article discusses the issues associated with intellectual property rights and authenticity in Metaverse trade.
Understanding the Metaverse
For now and in the future, the Metaverse can be defined as an immersive online experience that uses virtual reality (VR) and augmented reality (AR) technologies and devices—in theory, a realm of limitless creativity.
Although many consider the Metaverse the next generation of the Internet, it is not a novel notion. It has been under serious study and development for at least ten years, based on an idea well-established in science fiction for decades.
The Metaverse has recently gained traction as major tech corporations, like Meta (previously Facebook) and Microsoft, have announced intentions to create new metaverse platforms for both entertainment and business.
This has sparked interest among other industry participants in creating ecosystems compatible with the major players’ metaverse ideas while remaining increasingly accessible to general users.
However, we have yet to see the development of actual products and services, which will require average people to understand this technology fully.
The Metaverse will most likely immediately influence the entertainment, gaming, education, and financial industries. Also, cryptocurrencies are expected to be widely used in the metaverse ecosystem, adding to the industry’s rapid growth.
With all of these developments, it will be critical for anybody working in the Metaverse to grasp the intellectual property rights (IPRs) associated with the digital components that make up its structure.
Environments That Enforce Intellectual Property Rights
This tectonic change will result in new creative works to preserve and a new environment to enforce intellectual property rights. They include;
- Patent
- Trade secrets
- Copyright
- Trademark
- Design rights
- Licenses and advertising
Patents
When developing innovative technologies, organizations should consider obtaining patent protection. Patents can protect innovative software that addresses a technical issue.
The difficulty for businesses is that several courts have quickly invalidated software patents, citing the program as an application of an abstract idea and hence ineligible for patent protection.
Policing patent infringement in the Metaverse also presents practical challenges. Software patents, unlike other intellectual property rights, work in the background.
A source code comparison is required to establish infringement, demanding legal action to acquire disclosure and allow expert examination.
This is costly and time-intensive, with the potential that the infringement will rewrite the source code to escape accountability.
Trade Secrets
Given the difficulties in registering and enforcing software patents, organizations may be better off using trade secrets to protect their metaverse technologies.
Trade secrets preserve commercially necessary proprietary knowledge, provide a competitive advantage, and are kept hidden. Trade secrets can survive eternally if kept out of the public realm.
However, the speed at which technology advances can swiftly render trade secrets obsolete.
The Metaverse’s success depends on comprehending the physical world and its users. The Metaverse can incorporate real-world aspects into a virtual environment, and data will play an essential role in this process.
Also, AR/VR technology will create data with remarkable granularity, tracking where you click and how you move. Though trade secret protection is somewhat limited, trade secrets may help protect this information if the standards are met.
Copyright
In the United Kingdom, copyright is an unregistered right that protects literary, dramatic, musical, and artistic works that are original, fixed in some form, and eligible for protection.
As a result, copyright is a flexible right that can be difficult to enforce.
Unlike the UK, other relevant nations, such as the United States, may require brand owners to register relevant copyrights in metaverse assets and software.
If a business discovers its copyright material is being utilized in the Metaverse without permission, it should contact the platform promptly.
However, depending on the location of a host server, takedown and website blocking procedures will be determined by local legislation.
When determining copyright infringement, a court will consider whether a significant portion of a copyrighted work has been copied. It is unclear how courts will understand the ‘fair dealing’ defenses to copyright infringement in a metaverse context.
Fundamentally, copyright protection is based on whether a work was created by a qualifying person or published in a qualifying country.
This raises the question of how courts will interpret the validity of copyright works beyond the universe, which, by definition, has no borders.
Trademarks
Registered trademarks give the owner the exclusive right to prevent others from using the mark for the products and services specified in the registration.
They are important assets that can last permanently and eliminate the necessity for trademark owners to demonstrate the elements of a passing-off case.
Several brands are registering trademarks in preparation for their launch in the Metaverse. McDonald’s, for example, has registered trademarks for virtual restaurants that provide home delivery.
At the same time, Walmart has applied for trademarks for financial services “for use by members of an online community via a global computer network.”
In the absence of a body of rulings, determining the value of metaverse registrations is challenging, and current marks covering digital goods and services are uncertain regarding the protection of trademarks in the Metaverse.
However, it is reasonable to expect that broadening registered trademark protection to include digital assets will help with enforcement.
Design Rights
Registered design rights are not limited to specific products or services. This adaptability is expected to prove helpful in the Metaverse.
For example, if a business has a design registration for a popular handbag and is adopted by a digital avatar, the registration may be enforced against a copycat digital incarnation.
The UK Intellectual Property Office (UKIPO) is now investigating how to update the UK design rights framework to make it more future-proof against new and developing technologies.
In January 2022, it solicited feedback on using designs in a digital environment, including “avatar content in online gaming,” to balance human-created and computer-generated designs.
At the same time, the consultation does not expressly mention the Metaverse. Increased protection for digital assets like avatars would affect the availability of design rights to better protect businesses in the Metaverse.
Licenses and Advertisements
When licensing intellectual property rights, firms should check any current licenses to see if they cover the use of that IP in the Metaverse and if any first rights of refusal are granted, which could result in infringement if intellectual property rights are offered to a third party.
Any future licensing should address the Metaverse and any use of digital assets such as NFTs.
The Metaverse is set to be a powerful marketing tool. Still, the UK’s advertising authority, the Advertising Standards Authority (ASA), has yet to guide businesses to comply with advertising regulations.
As brands seek to market themselves in the Metaverse, they must overcome advertising codes and ASA rulings.
Opportunities For Intellectual Property Right Owners
In the short term, brand owners in the technology industry will likely have new chances to develop AR and VR gadgets, improve their usability, and make them cheaper and more pleasant for extended usage.
There will also be more options for AR technology-related devices to be used with a broader range of goods, including eyewear and other objects, making AR and VR more accessible to the general public.
As a result, this industry will have new potential for intellectual property rights, such as new device and software technology patents. New technologies will establish new brands or product lines and trademarks that may be used in real and virtual worlds.
To fulfill their rightful function in the Metaverse’s immersive experience, these trademarks will most likely be unconventional (such as moving picture marks or sound marks), increasing the protection of nontraditional trademarks.
Also, because these new trademarks will be used with new sorts of goods and services, intellectual property right owners must carefully assess their proper classification.
Some existing trademark classifications that may apply to metaverse goods and services include class 9 (downloadable virtual goods), class 35 (retail store services that incorporate virtual goods), and class 41 (online entertainment services).
As new online platforms emerge, there will be potential for new patentable technologies and copyright protection for software-related inventions and games, such as blockchain-related technologies and cryptocurrencies.
Enforcement Strategies for Intellectual Property Owners in the Metaverse
Brand owners can maintain control over their trademarks or copyrights by using more complex research methods tailored to identifying threats of infringement in the Metaverse.
In addition to regularly monitoring and searching for potential infringement, virtual investigators (including people, automated systems, and artificial intelligence) may be required to assist IP owners in tracking how their intellectual assets are used in the Metaverse.
The Metaverse consists of internet services, and significant service providers may be situated outside the country where infringement happens.
Because a host server outside the intellectual property right holder’s country can make online enforcement difficult, regulations in each nation may need to be examined separately to determine local notice-and-takedown procedures and website-blocking methods.
This is complicated by disparities in the evolution of intellectual property legislation and practices among jurisdictions. In some nations, intellectual property rights enforcement is handled administratively, whereas in countries with more evolved intellectual property rights practices, judicial injunctions are more common and accessible.
Regardless, gathering infringement evidence is a critical first step, and it may be most beneficial to concentrate on comprehensive trademark and patent prosecutions in nations with a significant number of users.
Conclusion
IP appears to have a bright future in the Metaverse, which will usher in new sorts of atypical trademarks, new goods and services that cover a wide range of trademark categories, and new patentable VR and AR-related technology.
The transition to virtual reality may also raise further concerns about the confidentiality of trade secrets.
Because establishing appropriate measures to maintain secrecy is one of the fundamental legal requirements for protecting trade secrets, the virtual landscape will necessitate new methods to maintain this secrecy in addition to the traditional methods of signing nondisclosure agreements or limiting access with biometric technology.
The Metaverse will bring problems to IP legislation and Intellectual property rights holders, but it will also provide a significant opportunity for IP to adapt and become compatible with the metaverse environment.
Using these new chances to adapt to the Metaverse will be beneficial and necessary for continuously adapting intellectual property law to newer technological breakthroughs.
