It is no news that the metaverse might just be the next big thing. Many are of the opinion that it represents a network of virtual worlds where our digital identities may, for example, purchase virtual products that are verified by non-fungible tokens (NFTs). For others, the term 'metaverse' refers to a general digital layer on top of the 'real' world, through augmented reality . One thing is certain—the metaverse (the next generation of internet), is a new environment for the creation of intellectual property and use of trademark law in addition to a changing business landscape.
While the metaverse provides new opportunities for businesses to reach consumers, it presents various legal challenges. Third parties using a brand owner's trademarks in a virtual world, run the risk of confusing consumers or tarnishing the brand, infringing on real-world rules that prevent trademark infringement and dilution.
As in the real world, it is critical that a 'virtual brand' obtains adequate trademark protection to secure both current and future investments. Although the metaverse is 'virtual', trademark infringement and IP disputes are quite real and have already transpired. For example, MetaBirkin NFT creator, Mason Rothschild, who began selling digital versions of fur-covered Birkin bags as NFTs in November 2021, lost all his profits in a lawsuit against luxury brand, Hermès International, when a Manhattan Federal jury held that Rothschild's sale of the NFTs violated Hermès' rights to the "Birkin" trademark. This was after news emerged when opulent brands like Balenciaga and Nike announced their expansion into the metaverse.
The MetaBirkins case raises a set of fascinating issues at the intersection of intellectual property law and digital technology, as it could have an impact on how non-fungible tokens and other areas of the digital world deal with intellectual property infringement and First Amendment rights (a defence that validates the use of a trademark owner's mark for expressive purposes, provided the use possesses artistic relevance and does not mislead consumers).
To implement a trademark protection plan for the metaverse, you, as a brand owner must first analyse your trademark portfolio and determine if essential trademarks will be exploited in a virtual context. If this is the case, brand owners must submit applications that expressly address the virtual products or services that will be offered for sale or distribution in the metaverse.
It is extremely important to be aware of the trademark laws that will apply to create workable strategies to defend and enforce your trademarks in the metaverse. This way, brand owners in the digital world, will be prepared to respond to the current and future legal issues concerning the metaverse.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
