IMPAAs far back as the late sixth century BC, the Greek philosopher Parmenides declared, “nothing comes from nothing.” In the digital era, every two or three years now, apparently unprecedented phenomena seem to come from nothing and yet appear to have the power to revolutionize the world and the law. A few years ago, it was Web 2.0, then Cloud Computing, Blockchain and Web 3.0. Over the last year, countless articles have anticipated global transformation through the metaverse and NFTs (non-fungible tokens), fueling interest around the question of whether there is an urgent need for new regulations to adapt to these innovations. In other words, should the law adapt to the metaverse or should the metaverse adapt to the law? For the reasons set out below, the most appropriate response at this stage is the latter. Since the rise of the Internet over two decades ago, we have enjoyed an online network based on information, data and telecommunication, with a range of standalone virtual worlds emerging, mainly on social media and video games like Second Life, Instagram, Fortnite, TikTok and Roblox. The metaverse promises interconnected virtual environments controlled by electromyography (EMG) movements and neural interfaces. In the metaverse, companies will have the unprecedented ability to exploit the full potential of the data they collect. The technology sector and the video game industry are preparing for the advent of the metaverse: a network of 3D virtual worlds, where humans can interact with each other socially and economically, mainly through avatars. Despite great media attention, the metaverse does not yet exist, and is still far from being a reality, at least as currently described by some reporters. This is largely because of the demanding computing requirements and standardized protocols needed for it to take off. In contrast, NFTs are already with us. Based on existing blockchain technology, NFTs are cryptographic units of data, with unique metadata. As such, NFTs can be distinguished from one another and can hold other kinds of information, like the identities or artwork of different individuals. Their uniqueness makes them capable of being sold or traded, with a digital ledger registering all transactions. NFTs harness the capabilities of blockchain technology to create non-fungible digital files with ─ most importantly for the entertainment industry ̶ an image, graphic or video embedded in the token, which determine its value in the market. As noted above, many voices are now demanding new regulations for the metaverse. Why? To protect users when they interact in this virtual world, and to close an apparent gap between reality and the law. The technology sector and the video game industry are preparing for the advent of the metaverse: a network of 3D virtual worlds, where humans can interact with each other socially and economically, mainly through avatars. (Photo: naratrip wboonroung / iStock / Getty Images Plus) Assertions that the current regulations do not apply in the metaverse, that existing laws are not adapted to that environment, or that technology travels faster than the law, are common but, in my view, they are generally incorrect.
Over the last 30 years, countries with a strong Internet presence have established new rules to address e-commerce, criminal activities involving technology, consumer rights on digital content and the liability regime for Internet service providers, to name a few. Take intellectual property (IP) laws as an example. They protect, among others, authors, inventors, producers, designers and performers by granting them exclusive rights over their copyright, trademarks, patents, industrial designs or trade secrets. The regulation of IP rights is not primarily focused on the physical object in which a creative work, a distinctive sign, or a technical innovation is embedded, but rather on their intangible aspects. While civil legislation regulates the ownership of physical property (a car, a book, or a purse, all of which can contain trademarks, patents, or works of authorship), IP laws govern the ownership regime of the non-tangible elements of such property. In IP jargon, this is the difference between the corpus mysticum (the intangible asset) and the corpus mechanicum (the physical representation) of such an asset. This principle has been applied for centuries and is also fully applicable to the metaverse and NFTs. In the metaverse, companies will have the unprecedented ability to exploit the full potential of the data they collect. The metaverse is a virtual universe where avatars controlled by humans or computers can control virtual items, such as vehicles, weapons, or furniture, all of which can feature trademarks or copyrighted works. Because IP laws deal with the intangible elements (corpus mysticum) of an object, whether physical or virtual, the obvious conclusion is that the builders of the metaverse will have to respect the rights of inventors, designers, and owners of distinctive signs as in the real world. Consequently, a given right holder will be entitled to prosecute the exploitation of his or her IP rights in the metaverse, for example, when attached to a virtual purse or jacket developed for digital avatars. Regarding NFTs, the conclusion is similar. NFTs are digital files in which creative works or other subject matter, such as a video or an artwork, can be embedded. As long as copyright provides an exclusive right over original works of authorship (corpus mysticum) and this is distinct from the ownership of any digital object in which the works are embedded (corpus mechanicum), then anyone who uses, for example, a sound recording or a clip from a video game in an NFT will need prior authorization from the copyright holder of such work. There is, therefore, little debate on the application and validity of the current regulations to NFTs and the metaverse. From a legal standpoint, the Berne Convention for the Protection of Literary and Artistic Works, now ratified by 181 countries, establishes that contracting parties must grant exclusive rights to authors over their works irrespective of the type or form of their expression. The Berne Convention has since been supplemented by other international agreements, including the WIPO Copyright Treaty, adopted in 1996, which adapts the Berne Convention to the digital environment. This agreement (Agreed Statement concerning Article 1(4) of the WIPO Copyright Treaty) makes it clear that the storage of a protected work in digital form in an electronic medium (such as an NFT or a file, the content of which is displayed in the metaverse) constitutes a reproduction which needs the prior approval of the copyright holder. It seems that the law does not always travel so slowly. While, in principle, we need to request permission to use the trademark of a company in a digital object, in cases involving video games, some courts have established that certain descriptive uses of third parties’ trademarks don’t need their prior consent. An example is the famous Humvee case (AM General LLC v Activision Blizzard, Inc. et al). (Photo: LisaChristianson / iStock / Getty Images Plus)
However, these new forms of entertainment do raise a number of challenges for IP rights owners, although these challenges stem from other sources. Authors, producers, publishers, and proprietors of trademarks have exclusive rights over their intangible assets. These rights, however, are not absolute, as the Berne Convention contemplates certain scenarios in which they may not exercise such rights. Some uses, such as the reproduction of a literary work for a book citation or the use of a brand to depict a brand owners’ products or services are outside the exclusivity space of right holders. In principle, therefore, if we want to use the trademark of any company in a digital object, such as an NFT or an item in the metaverse, we need to request permission from the owner of the mark. Notwithstanding the fact that in cases involving video games, some courts have established, for example, that certain descriptive uses of third parties’ trademarks don’t need their prior consent. In principle, if we want to use the trademark of any company in a digital object, such as an NFT or an item in the metaverse, we need to request permission from the owner of the mark. In 2017, AM General LLC, the manufacturer of the famous Humvee military vehicle, sued the publisher of the video game franchise Call of Duty, for the depiction of the vehicle in the game, which reproduced the vehicle’s design and used the trademark. The United States District Court, Southern District of New York concluded , however, that as Activision’s goal was to develop a video game that realistically simulated modern warfare, their use of the vehicle and the trademarks had artistic value and, therefore, met the requirements of the so-called Rogers test.
In the 1989 case of Rogers v Grimaldi 875 F.2d 994 (2d Cir. 1989), the court developed a test to determine whether use of a trademark requires prior authorization. It has two elements : first, it seeks to determine if the use of the trademark is “artistically relevant to the defendant’s work,” and second, if such use is “explicitly misleading.”
In the copyright realm, there have also been a number of prominent cases of use of third parties’ content without permission. One of the most relevant examples is the claim brought by Solid Oak ruled in the defendant’s favor, applying the de minimis use defense (where such a small portion of the protected work has been used that the infringing work is not substantially similar to the copyrighted work and is therefore none-infringing), the implied license defense, and the fair use defense, based on the artistic nature of video games. Nevertheless, in other cases, courts have determined that video game developers have gone too far when using third parties’ IP. As such, it is clear that these matters need to be analyzed on a case-by-case basis. The immediate conclusion, however, is that there are a good number of precedents to rely on when debating the necessity for specific uses of IP rights in NFTs or the metaverse. As said, nothing comes from nothing and, in fact, historically, the development of new regulation has been based on the application of the principle of learning from previous experiences. Another takeaway is that the metaverse and NFTs are not, at least from a legal standpoint, as disruptive as some believe; at the end of the day, virtual worlds and digital objects have already existed for two decades. It is a certainty that NFTs and the metaverse, when it comes into being, will bring many challenges to owners of IP rights. Most of these challenges cannot be anticipated at this stage. Consequently, we must analyze NFTs, the emergent metaverse and any other new digital phenomena against existing regulations, which have been enacted after thorough debate by multiple countries and cultures. These regulations have also been tested in various scenarios and have proven valid for decades. Undoubtedly, some adjustments will be necessary in the coming years to regulate human interaction in digitally-connected worlds, but these must come when we learn the nature of these challenges. In the meantime, IP rights will continue to be as valid as ever for the advancement of science and the arts. The Metaverse envisions a future in which people can use virtual reality (VR) headsets, glasses, and wristbands and do a variety of things, including socialise, collaborate, adopt avatars, play games, explore virtual zoos and jungles, meet at virtual coffee shops, hold meetings in virtual boardrooms, dance in virtual nightclubs, and attend virtual concerts with friends. Virtual Reality, Augmented Reality and Blockchain have a major contribution towards the advancement of Metaverse. The Metaverse has emerged as one of the top five emerging trends and technologies for 2022 and is likely to be worth $800 billion by 2024[2]. The concept of Metaverse is gradually unfolding and has already gained a foothold in a number of sectors, like healthcare, law, business and sports. It has also opened endless opportunities for fashion designers, fashion and retail brands and “trendsetters”. Digital clothing has emerged as the latest fashion which is not only exclusive but also affordable. The immersive digital environment of the metaverse creates a number of issues, including the ownership of intellectual property (IP) on virtual goods and material, including avatars, produced by companies and users, as well as the enforcement of IP rights in the event of infringement. Sketches, the copyright holder of certain tattoos, against 2K Games, the publisher of the well-known video game franchise NBA 2K. The claimant owned the rights to several graphic designs featured in the tattoos of famous basketball players (including Lebron James) and argued that its copyright was infringed when reproduced in the digital avatars of the athletes in the video game. The same court that judged the Humvee case (the United States District Court, Southern District of New York) also.
This paper gives a comprehensive understanding of the evolution of fashion industry in the Metaverse through Non-Fungible Tokens (NFTs) and technologies like Augmented reality and virtual reality. The author speaks about the advantages of digital fashion economically, socially and environmentally. This paper analyses the various concerns that arise with the expansion of fashion and retail brands over the digital space. It elaborates on the issue of Copyright ownership on the Metaverse and trademark infringement.
The culture around the creation, collecting and wearing of clothing in the digital sphere is known as “digital fashion.” The massive potential of digital fashion is being welcomed by independent creators and prominent brands alike as a response to technology advancement. Digital clothing is dependent on pixels and not on textiles. The idea of digital fashion comes from video games, however, technologies such as Metaverse have elevated digital clothing from merely functional to fashion. It was observed that gamers without hesitating bought clothes, accessories and skins for their characters although it did not affect their game in anyway, therefore making it clear that individuals would passionately invest in digital clothing. The beginning of Social Digital Fashion can be traced back to stimulators such as The Sims (2000) and interactive social network called the Second Life. The creation of the NFT, which enables designers to register digital fashion in a unique format, i.e., blockchain. This marked the first step toward the creation of a real metaverse for the fashion industry.
Did you know? The Fashion industry contributes to around 10% of the total emission of the greenhouse gases. Approximately ,700 gallons are needed to manufacture one cotton shirt and 2000 gallons to produce a pair of jeans, with this, the fashion industry becomes the second-largest consumer and polluter of water[8]. Well, the good news is, with the digital fashion surfacing the fashion world, the amount of air pollution and water wastage can be reduced significantly as the carbon footprint of producing a digital cloth is around 95% lesser than that of a physical garment. Moreover, it is also a sustainable option as there is no wastage of textiles or other raw materials involved in manufacturing a physical garment.
Fashion and retail brands can reduce their expenses if they choose to expand their business to the digital space as it does not involve any manufacturing costs, logistics costs or storage costs.
Also, digital innovation process consumes lesser time than the physical process of designing and manufacturing. For instances, PUMA cut their water wastage by 17% and expenses by 30% by entering into the arena of digital fashion.
Digital Fashion advances the idea that anyone irrespective of their size, body type or gender can wear anything that they wish for. Physical garments can sometimes create a gap between people of different sizes and genders. However, digital clothing helps in doing away with this problem. Moreover, it is relatively easier for fashion brands to create clothing that is suitable for everyone alike.
Many fashion companies are entering the realm of NFTs and Metaverse. In certain circumstances, the NFTs are auctioned alongside some real couture items for prices significantly greater than those typically paid for the original pieces. NFTs assist the brand owners in reducing anti-counterfeiting. NFTs fight against the counterfeits by extending the possibility to embed an NFT in physical products which can then be scanned in order to confirm whether they are authentic or not. However, NFTs cannot guarantee authenticity fully because if the information entered at the outset is false, then the NFTs will affirm and uphold that untruth in all of its subsequent sales.
The legal definition of copyright for digital assets such as NFTs has not been regulated and recognised. This opens a door for a vicious loop of ambiguities and disputes between creators and brands. Another problem is that, on a digital space like Metaverse, individuals cannot get their money back through blockchain when they have been cheated on by sale of fake creations, besides, they can also not file a complaint against the same because the transactions are one-way. “Ownership” in the metaverse is nothing more than a form of licensing, or provision of services. The concept of Ownership is quite complex in the metaverse. Last year, Nike registered seven trademark applications in advance of its entry into the Metaverse. The trademark application covered virtual items that could be downloaded, virtual goods that could be purchased in stores, and virtual clothes and footwear that could be worn in virtual worlds. The ownership of a piece of property can be traced back to it in the physical world. While one individual may own the comparable physical property in the Metaverse, other people may hold ownership of the corresponding digital things and properties.
Trademark is a type of Intellectual Property which helps in distinguishing the goods and services of one enterprise from those of the other enterprises. A trademark helps in establishing goodwill for the brand and ensures that the source of goods is engraved in the minds of its consumers. When a brand acquires trademark protection, it prevents others from using the same or similar mark which would cause confusion and deception in the minds of the people regarding the credibility and authenticity of the goods or services. Well-known companies like Burberry, Nike, Gucci, Givenchy, and Skechers, as well as unidentified and independent applicants, have been rushing to register trademarks for their Metaverse products. Some of these companies have also looked into using non-fungible tokens, (NFTs), to protect their intellectual property rights. A lawsuit for trademark infringement and dilution was recently filed by Hermès which one of the most exclusive luxury brands, against artist Mason Rothschild for creating and marketing “MetaBirkins,” a collection of 100 NFTs featuring furry Birkin bags, and for extensively using the BIRKIN trademark in connection with the NFTs. Hermès claims that the line violates the well-known BIRKIN trademark and trade dress that they have. In reply to the same, Mr. Rothschild refers to himself as an artist and claims that fair use absolves his liability. Hermès made assertions about how, in addition to raising the possibility of customer confusion, this unlawful use by third parties may also damage the companies’ virtual goods markets.
Identification of the owners of IP protected content created in the metaverse will be a major challenge. This will require taking into consideration the varied specifications from jurisdictions around the world. Assignment and licensing agreements will play a vital role in regulating Metaverse. Determining the users rights will be necessary because the right to exploit a work in the metaverse does not entirely fall within the ambit of the digital uses typically covered by agreements. It is crucial that fashion brands and fashion designers are aware of the terms and conditions in particular, IP ownership and control provisions of the Metaverse before they expand their business. While the Metaverse is providing fashion designers, fashion brands and independent artists, with new and exciting opportunities, the issue of how to safeguard intangible property on the Metaverse still looms. The Metaverse is built on the concept of decentralisation; however, the existing Intellectual Property Protection mechanism relies on centralised methods such as courts and tribunals. Therefore, it is important that this aspect should also be taken into consideration and the existing legislations should be relooked upon accordingly.
As far back as the late sixth century BC, the Greek philosopher Parmenides declared, “nothing comes from nothing.” In the digital era, every two or three years now, apparently unprecedented phenomena seem to come from nothing and yet appear to have the power to revolutionize the world and the law. A few years ago, it was Web 2.0, then Cloud Computing, Blockchain and Web 3.0. Over the last year, countless articles have anticipated global transformation through the metaverse and NFTs (non-fungible tokens), fueling interest around the question of whether there is an urgent need for new regulations to adapt to these innovations. In other words, should the law adapt to the metaverse or should the metaverse adapt to the law? For the reasons set out below, the most appropriate response at this stage is the latter. Since the rise of the Internet over two decades ago, we have enjoyed an online network based on information, data and telecommunication, with a range of standalone virtual worlds emerging, mainly on social media and video games like Second Life, Instagram, Fortnite, TikTok and Roblox. The metaverse promises interconnected virtual environments controlled by electromyography (EMG) movements and neural interfaces. In the metaverse, companies will have the unprecedented ability to exploit the full potential of the data they collect. The technology sector and the video game industry are preparing for the advent of the metaverse: a network of 3D virtual worlds, where humans can interact with each other socially and economically, mainly through avatars. Despite great media attention, the metaverse does not yet exist, and is still far from being a reality, at least as currently described by some reporters. This is largely because of the demanding computing requirements and standardized protocols needed for it to take off. In contrast, NFTs are already with us. Based on existing blockchain technology, NFTs are cryptographic units of data, with unique metadata. As such, NFTs can be distinguished from one another and can hold other kinds of information, like the identities or artwork of different individuals. Their uniqueness makes them capable of being sold or traded, with a digital ledger registering all transactions. NFTs harness the capabilities of blockchain technology to create non-fungible digital files with ─ most importantly for the entertainment industry ̶ an image, graphic or video embedded in the token, which determine its value in the market. As noted above, many voices are now demanding new regulations for the metaverse. Why? To protect users when they interact in this virtual world, and to close an apparent gap between reality and the law.
Assertions that the current regulations do not apply in the metaverse, that existing laws are not adapted to that environment, or that technology travels faster than the law, are common but, in my view, they are generally incorrect. Over the last 30 years, countries with a strong Internet presence have established new rules to address e-commerce, criminal activities involving technology, consumer rights on digital content and the liability regime for Internet service providers, to name a few. Take intellectual property (IP) laws as an example. They protect, among others, authors, inventors, producers, designers and performers by granting them exclusive rights over their copyright, trademarks, patents, industrial designs or trade secrets. The regulation of IP rights is not primarily focused on the physical object in which a creative work, a distinctive sign, or a technical innovation is embedded, but rather on their intangible aspects. While civil legislation regulates the ownership of physical property (a car, a book, or a purse, all of which can contain trademarks, patents, or works of authorship), IP laws govern the ownership regime of the non-tangible elements of such property. In IP jargon, this is the difference between the corpus mysticum (the intangible asset) and the corpus mechanicum (the physical representation) of such an asset. This principle has been applied for centuries and is also fully applicable to the metaverse and NFTs. In the metaverse, companies will have the unprecedented ability to exploit the full potential of the data they collect. The metaverse is a virtual universe where avatars controlled by humans or computers can control virtual items, such as vehicles, weapons, or furniture, all of which can feature trademarks or copyrighted works. Because IP laws deal with the intangible elements (corpus mysticum) of an object, whether physical or virtual, the obvious conclusion is that the builders of the metaverse will have to respect the rights of inventors, designers, and owners of distinctive signs as in the real world. Consequently, a given right holder will be entitled to prosecute the exploitation of his or her IP rights in the metaverse, for example, when attached to a virtual purse or jacket developed for digital avatars. Regarding NFTs, the conclusion is similar. NFTs are digital files in which creative works or other subject matter, such as a video or an artwork, can be embedded. As long as copyright provides an exclusive right over original works of authorship (corpus mysticum) and this is distinct from the ownership of any digital object in which the works are embedded (corpus mechanicum), then anyone who uses, for example, a sound recording or a clip from a video game in an NFT will need prior authorization from the copyright holder of such work. There is, therefore, little debate on the application and validity of the current regulations to NFTs and the metaverse. From a legal standpoint, the Berne Convention for the Protection of Literary and Artistic Works, now ratified by 181 countries, establishes that contracting parties must grant exclusive rights to authors over their works irrespective of the type or form of their expression. The Berne Convention has since been supplemented by other international agreements, including the WIPO Copyright Treaty, adopted in 1996, which adapts the Berne Convention to the digital environment. This agreement (Agreed Statement concerning Article 1(4) of the WIPO Copyright Treaty) makes it clear that the storage of a protected work in digital form in an electronic medium (such as an NFT or a file, the content of which is displayed in the metaverse) constitutes a reproduction which needs the prior approval of the copyright holder. It seems that the law does not always travel so slowly.
However, these new forms of entertainment do raise a number of challenges for IP rights owners, although these challenges stem from other sources. Authors, producers, publishers, and proprietors of trademarks have exclusive rights over their intangible assets. These rights, however, are not absolute, as the Berne Convention contemplates certain scenarios in which they may not exercise such rights. Some uses, such as the reproduction of a literary work for a book citation or the use of a brand to depict a brand owner’ products or services are outside the exclusivity space of right holders. In principle, therefore, if we want to use the trademark of any company in a digital object, such as an NFT or an item in the metaverse, we need to request permission from the owner of the mark. Notwithstanding the fact that in cases involving video games, some courts have established, for example, that certain descriptive uses of third parties’ trademarks don’t need their prior consent. In principle, if we want to use the trademark of any company in a digital object, such as an NFT or an item in the metaverse, we need to request permission from the owner of the mark. In 2017, AM General LLC, the manufacturer of the famous Humvee military vehicle, sued the publisher of the video game franchise Call of Duty, for the depiction of the vehicle in the game, which reproduced the vehicle’s design and used the trademark. The United States District Court, Southern District of New York concluded , however, that as Activision’s goal was to develop a video game that realistically simulated modern warfare, their use of the vehicle and the trademarks had artistic value and, therefore, met the requirements of the so-called Rogers test.
The metaverse is an infrastructure of technology that allows users to experience online networks in a 3D or virtual reality space. Dubbed the next generation of the internet, a fully developed metaverse may eventually connect all users across online virtual environments to socialize, share information, or transact business. At present, the metaverse consists of various siloed platforms that offer users a variety of online experiences—from video games to online virtual reality social networks.
The ability to engage customers in an interactive virtual space presents brand owners with new business opportunities, to advertise, test, and sell both virtual and real-world goods. For example, Nike sells digital sneakers to online players on the Roblox platform to customize its avatar's footwear. And KFC announced plans to launch virtual restaurants, where users can enter a digital KFC online and order real food for delivery. In short, the metaverse is open for business.
At the same time, the metaverse presents legal challenges. The use of a brand owner's trademarks by third parties in a virtual world may lead to consumer confusion or brand tarnishment, violating real-world laws that prohibit trademark infringement and dilution. The metaverse represents not just a changing commercial landscape but also a new setting for the development and application of trademark law.
With the metaverse on its way, businesses are gearing up to use this fresh market to showcase their products and services. However, now comes the question of intellectual property safety in the metaverse. In the real world, when a business completes trademark registration, it will be provided with exclusive rights to utilise the intellectual property. Will this even apply to the virtual world? One can't directly answer this question; multiple factors have to be taken into account. First, let's brush up on the basics: Metaverse is a three-dimensional virtual world that combines virtual reality, social media, augmented reality, and online gaming. It is an idea of a 3D universe combining multiple virtual spaces. You can browse, visit functions and socialise in these 3D spaces in the future. It is not in complete existence; however, some of the platforms have metaverse-like elements. From a business point of view, it is one of the best places to showcase your product in the near future. Anuncios How Will Metaverse Impact Trademark Laws In India? Trademarks in the metaverse are already having a significant impact in India. If you have a closer look at the Indian market, you can see that the Indian trademark registry has several parties who have already proclaimed statutory rights on the term metaverse. Multiple formative marks and designs have been registered featuring the word metaverse. Section 9 (1)(C) of the Trade Marks Act of 1999 - clearly states, 'The trademarks which consist exclusively of marks or indications that have become customary in the current language or the bonafide and established practices of the trade shall not be registered'. Surprisingly, this aspect has not been taken into consideration by the registry. Until now, it is not clear why registrations under this concept are granted. Globally more than ten jurisdictions have granted registration for trademarks where the goods and services have specified the term metaverse. In India, there is not yet any registration record where goods and services are classified under metaverse. In reality, many businesses are not clear on categorising their goods and services when it comes to the metaverse. Precise categorisation of goods and services is a crucial factor in determining the overall rights of trademark registration in the metaverse. The Indian courts have not yet provided a clear structure to this aspect. However, the European Union Intellectual Property Office (EUIPO) has provided tips to classify goods and services for filing applications. Anuncios Despite the lack of clarity, the Indian business market has already started promoting their businesses through the metaverse. Blockbuster movies like Radhe Shyam and KGF were promoted in the metaverse. Apart from this, popular FMCG brands like Tata tea have organised festivities in the metaverse. Challenges Involved In Protecting Trademarks In The Metaverse Trademark registration in the metaverse needs proper legalisation. There are multiple challenges involved in protecting trademarks in the metaverse. Some of them are described below: Finalising Jurisdiction: Yes, the metaverse is not actually an existing place. When it comes to trademark registration in the metaverse, ascertaining jurisdiction is going to be a huge challenge. However, Delhi courts have suggested using the same jurisdiction where the physical shops or where the parties reside. Using Licence: Will the license obtained in the real world be valid in meta? This is a major challenge that has to be addressed by the authorities. There need to be proper guidelines as of such ensure this fact. But as per the Law, a registered trademark still provides legal protection and exclusivity to the brand irrespective of the arena where they promote their brands. Unauthorised Use Of Trademarks: Trademarks in the virtual world, like the metaverse, are subjective to miss interpretation and counterfeiting. There are no particular rules and regulations or interpreting of virtual goods. For instance, any avatar in Meta can wear trademark shoes from Nike or other high-end popular brands. Until now, there has been no clear interpretation of virtual goods. Tips to Safeguard Your Trademark If you are looking forward to registering your trademark in the metaverse, make sure to follow the tips given below: Complete Your Trademark Registration: It is crucial to register your trademark in India. This provides a legal right and proves that you own this particular trademark. Click here for Easy Trademark Registration in India Sign Up For A Proper Trademark Monitoring Service: Trademark monitoring services can help the owners to analyse relevant markets and internet content for potential infringement. You will be immediately notified of the infringement sooner than later, which will help you protect your trademark in the long run. Examine The Nature Of Use And Possible Claims: If you are aware of the possibility of infringement activity, consider the nature of the infringement and take the required steps. Get in touch with a legal or trademark expert from vakilsearch to resolve all your queries. Make Your Presence In The Metaverse ASAP: Making your meta presence as a business brand owner is the best way to protect your trademark, and it permits active monitoring and assistance in trademark infringement. Expert Suggestion On Trademark Registration In Metaverse There are drawbacks and risks when it comes to trademark registration in the metaverse. However, you can reduce the possibility of infringement by following these two suggestions from our legal experts. Firstly, you can increase trademark protection by including it in the contracts and enforcing it in cyberspace. As a company, one can opt for multi-class trademark registration under Section 10A of the Information Technology Act of 2000. This can also help you register your trademark products and services in Meta. Subsequently, extending it to class 42 will help you to enforce the rights even in the metaverse. This will minimise litigations and infringements in the future. Secondly, make sure to analyse the possibilities of infringement in other companies. The terms of service should secure brand protection, and it should also see the policy of intellectual property valuation and management. Since the field of the metaverse is constantly upgrading and altering, the Indian courts have not yet analysed the questions regarding trademark rights. Experts say the enforcement of trademark rights will evolve along with the metaverse. In India, this particular stance of trademark registration in the metaverse is still in its initial stages. The detailed framework is mandatory shortly to provide proper protection to Indian businesses to protect their trademark registration in the metaverse.
New Worlds, Old Laws
The metaverse includes a virtual marketplace that allows users to purchase virtual and real-world goods and services. In the virtual marketplace, as in the real world, trademarks serve as source identifiers and distinguish a trademark owner's goods and services from those of others. The way in which goods and services are offered and sold in the virtual world, replicating transactions in the real world, justifies the conclusion that real-world trademark laws should apply to virtual commerce. The limited cases alleging trademark issues in virtual spaces supports this reasoning. The developer of "Second Life," an early metaverse platform where online "residents" control 3D avatars to simulate real-life activities, faced several infringement suits by owners of trademarks for both real world and virtual goods. For example, Taser sued Linden Research after discovering residents were utilizing the trademarked word "taser," including in advertisements for similar products, which led to Linden Research removing all instances of the word from the platform. Taser Int'l, Inc. v. Linden Rsch, Inc., No. 09-CV-00811 (D. Ariz. 2009). Linden Research also settled a suit by a "Second Life" resident who alleged that the developer facilitated the counterfeiting of its virtual goods by charging fees to access the in-game market. Eros, LLC v. Linden Rsch, Inc., No. 09-cv-04269-PJH (N.D. Cal. 2009). These cases demonstrate that trademark owners are using traditional trademark laws to address virtual infringement issues.
As in the real world, there will be defenses to infringement that apply to virtual trademark uses. But how these defenses apply and which will be successful may vary depending on the context.
First, traditional infringement claims must satisfy the commercial-use requirement, and virtual infringers may allege their use of a mark is non-commercial. To determine commercial use, courts consider whether use of a mark is connected to the sale of a good or service. The sale of both real-world and virtual goods and services should meet this standard.
But what if virtual goods are given away for free? On platforms where users are encouraged to generate free content, this dilemma may be particularly problematic. Some courts have held commercial use does not require an actual sale, but rather proof an infringer offers a competing service to the public using the mark. In the metaverse context, however, whether a digital recreation of a real-world good or service is competing may not be clear, especially if the trademark holder lacks any presence in the metaverse or fails to provide the same type of virtual good or service to users.
It is also expected that the First Amendment defense will be raised by alleged infringers in the metaverse, as this defense has been successful in cases involving infringement claims in the video game context. Under this defense, courts allow use of a trademark owner's mark for expressive purposes if the use has artistic relevance and does not explicitly mislead consumers. In AM General LLC v. Activision Blizzard, Inc., 450 F.Supp.3d 467 (S.D.N.Y. 2020), the court held that the video game publisher for "Call of Duty," a narrative-heavy military shooter game, did not infringe on the Humvee trademark based on the First Amendment defense. The use of Humvees was artistically relevant because it provided a sense of military realism, and it was unlikely to mislead players for a variety of reasons, including the parties' dissimilar uses and the differences in the parties' businesses.
This analysis is not necessarily applicable in a more-open-ended metaverse platform, like "Horizon Worlds." Driving virtual Humvees may be a fun experience but has questionable artistic relevance in a general online social network. Additionally, as more companies advertise, engage, and sell to metaverse users, the likelihood of misleading consumers also increases. Therefore, this defense may present challenges outside of the video game context or niche metaverse spaces.
Fair use may also be raised as a defense in metaverse infringement claims. There are two kinds of fair use: classic and nominative. Classic fair use permits the use of trademarks to describe a defendant's goods or services rather than to identify their source. By contrast, nominative fair use involves use of a trademark to describe the plaintiff's goods or services, but requires a defendant only use as much as necessary and not indicate any sponsorship or endorsement by the trademark owner. Either could apply in the metaverse and should be subject to the same analysis as the real world.
Finally, an alleged infringer in the metaverse may challenge whether an asserted mark actually covers a good or service. For example, in Brantley v. Epic Games, Inc., 463 F.Supp.3d 616 (D. Md. 2020), the plaintiffs alleged the publishers of the online multiplayer game "Fortnite" committed false designation of origin by selling customized dance moves for players that included the plaintiffs' allegedly trademarked "Running Man" dance. The court held the plaintiffs lacked a valid trademark because their dance designated an underlying choreographic concept, not a good. This defense may have traction in some metaverse cases given the amorphous nature of virtual goods and services that are commercially viable on online platforms.
In developing a trademark protection strategy for the metaverse, brand owners should first assess their trademark portfolios and determine whether key brands will be utilized in a virtual setting. If so, brand owners should file applications that specifically cover the relevant virtual goods or services that will be distributed or sold in the metaverse.
In addition, brands that are likely to face virtual infringements should consider developing a comprehensive policing strategy to identify infringement across metaverse platforms. The strategy should account for important differences in the various platforms. For example, while "Horizon Worlds" is implementing traditional takedown protocols to combat infringing activities, "Sandbox" requires users to exhaust all self-help options before the platform will become involved in any dispute. The policing strategy should also consider prioritizing unauthorized uses to determine which justify involvement in order to efficiently manage enforcement costs.
As metaverse platforms and their underlying technology develop, so too will the trademark issues facing companies. Whether fad or fate, brand owners should be prepared to respond to the existing and future legal issues involving the metaverse by understanding how traditional trademark doctrines will apply and developing practical measures to protect and enforce their trademarks in the metaverse.
