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IP Wave in Metaverse

IP Wave in Metaverse
Photo by Chris Appano / Unsplash
Metaverse Defined

 

As we discussed earlier in an IP & NFT newsletter, how do people believe in having IP rights after buying an NFT and how IP (especially copyright) laws safeguard the rights of the IP owners. This time around, we discuss how trademarks delve into the virtual world.

 

The digital space has taken the world by a storm. While doing so, numerous questions remain in the virtual world concerning its impact on intellectual property rights, particularly trademarks.

From connecting via corded landlines to smartphones to virtually hanging out with friends, Metaverse might seem far-fetched.

 

Metaverse – A cohort that is the successor to today’s internet. Made up of shared, online, and digital world can be summarized as a combination of digital layers over the physical world (such as Augmented Reality mobile game - Pokémon Go) and characters in artificial worlds (such as movie - The Terminator-2) and the global internet. In layman’s language, a three-dimensional virtual world where people could socialize, work, play, shop, etc., and do anything in the real world.

 

The race to own the Metaverse and fashion’s virtual IP is on. For consumer brands, Metaverse is the “new big thing” for how brands will communicate with consumers. Although, customers will be able to experience the products and services without a single item ever being physically produced or available. 

 

Nevertheless, in November, third-parties filed two trademark applications in the United States to use the Gucci and Prada logos in various metaverse-related arenas, including downloadable virtual goods virtual clothing used in virtual spaces. Moreover, on a metaverse platform (such as Roblox), creators sell clothes that feature logos of famous brands such as Louis Vuitton, Chanel, and Prada.

 

Given that this online evolution and the rise of the Metaverse, the rebranded Meta’s Mark Zuckerberg says – is capable of being touted as a $1 trillion opportunity. While there is much excitement and skepticism pertaining to digital assets such as NFTs and cryptocurrencies, several companies and individuals are ramping up efforts to provide virtual goods and services in the Metaverse, which has even resulted in a spike of filing trademark applications in the United States Patent and Trademark Office (USPTO). While Metaverse is digital and will take place virtually, its creation undoubtedly impacts trademark rights in the real world.

 

McDonald’s is one of the recent corporations to file a few trademark applications to operate a virtual restaurant featuring actual and virtual goods. Also, it seeks to protect its marks “McCafé” & McDonald’s for registration in connection with entertainment services. The trademarks would safeguard the idea of a McDonald’s restaurant in the virtual world that will be capable of selling both virtually and in the real world.

 

Several other popular brands have also filed trademark applications seeking protection in the Metaverse, such as Panera Bread’s application for PANERAVERSE (virtual food), Walmart’s application for WALMART (creation and sale of virtual goods), Jay-Z’s application for JAY-Z (music & clothing), Brooklyn Net’s application for NETAVERSE (entertainment services), Nike’s applications for NIKE, JUST DO IT (virtual goods), etc.

The laws have yet to catch up with the Metaverse. However, the most relevant trademark classes in the sphere of the virtual world are Class 9- Computers, Software and Electronics, Class 35- Advertising, Business management & Business administration, and Class 41- Education, Entertainment and Training.

In a famous case of Hermes v. Rothschild and the MetaBirkins Saga, Hermes lodged a complaint alleging trademark infringement, unfair competition, dilution claims against the respondents in nearly a 50 pager complaint, alleging Rothschild who is a digital speculator seeking to get rich by appropriating the brand METABIRKINS for use in selling, marketing, creating digital assets by just adding the generic term “META” to Birkin (Hermes’s trademark).

This case raises significant issues for brand owners planning to enter into Metaverse with a promising lucrative future. While the Metaverse itself is a swiftly evolving space, brand owners must be ready to take action in safeguarding their marks with as much diligence as in the physical world.

 

As the Metaverse comes to action over the next few years, as we swap our phones for smartglasses and a pocket computer, Intellectual Property laws will need to evolve in the race against technology. 

1.    Every year, $54 billion is spent on virtual goods, almost double the amount spent buying music.  
 

2.    GDP for Second Life (an online multimedia platform that allows people to create an avatar for themselves) was about $650M in 2021 with nearly $80M USD paid to creators.  
 

3.    Non-fungible tokens (NFTs) currently have a market cap of $41 billion.The average price of a parcel of virtual land doubled in a six-month window in 2021. It jumped from $6,000 in June to $12,000 by December across the four main Web 3.0 metaverses
 

4.    Someone really paid $450,000 to be Snoop Dogg's neighbour in the metaverse.

5.    An Indian couple from Tamil Nadu held the first Metaverse wedding reception this month which was attended by 500 guests.

 


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