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Well-versed with Metaverse? An IP Perspective

February 24, 2022

By Vikrant Rana, Ananyaa Banerjee and Pranit Biswas

Technology is evolving every second and change is the only constant. In a competition-driven and tech-powered ecosystem, it is imperative to be aware of where the future is headed and get the first-mover advantage. While this can be a space with multiple obstacles, it may very well be the next breakthrough.

One such development where big businesses seem to be foraying is the metaverse. Simply put, it is “a virtual-reality space in which users can interact with a computer-generated environment and other users”. However, not that simple a concept from the legal standpoint, with the lack of any laws and regulations in this space with respect to data security, privacy and censorship, regulatory enforcement, tax reporting, cyber fraud and crime. Hence, it becomes even more imperative to understand this work in progress.

What is a Metaverse?

Metaverse is a combination of the words ‘meta’ and ‘universe’ and is practically the creation of a parallel virtual universe with digital avatars where one may be living their regular life, an alter ego. It will expand the scope of internet to bring together digital spaces like social media, online gaming, 3D spaces, decentralized commerce, virtual / augmented / mixed / extended reality, non-fungible tokens, cryptocurrency, immersive learning and the like.

This would allow one to be sitting in the comfort of their homes and dining atop the Eiffel Tower, enabling people from different parts of the world collectively have an experience at their convenience across time zones. Another scenario could be a skiing trip to the Swiss Alps without actually travelling to the location, sans the risk of physical injury, pandemic travel restrictions and risks, and most importantly a budget that blows a hole in the pocket. While such experiences may affect tourism adversely, they may aid in preservation of the environment, and there is no saying how the metaverse will change the way we perceive the world we live in.

One of the areas which is relatively new to this concept is the Intellectual Property laws, more specifically trade marks and brand names.

Off late, one has come across various brands that have made a proactive entry into the metaverse sphere by way of filing trade mark applications in various jurisdictions including the US and EU.

A few examples with filing details are as follows:

Entity Trade Mark Class and Specification Country Date
NYSE Group, Inc. NYSE 09 : downloadable virtual reality, augmented reality, and mixed reality software; downloadable software for enabling users to experience virtual reality and augmented reality visualization, manipulation, and immersion; downloadable computer software and application programming interface (API) to allow users to perform e-commerce and financial transactions; downloadable computer software and application programming interface (API) to allow users to make payments, transfer funds, and processing payments; downloadable computer software and application programming interface (API) to allow users to buy, sell, and trade financial instruments; downloadable software for digital, virtual, and crypto currency wallets and storage; downloadable computer software and application programming interface (API) to allow users to access, maintain, store, display, buy, sell, and trade virtual and digital assets, artwork, collectibles, and non-fungible tokens; downloadable software and application programming interface (API) for sending, receiving, accepting, buying, selling, storing, transmitting, trading and exchanging digital currency, virtual currency, cryptocurrency, digital and blockchain assets, digitized assets, digital tokens, crypto tokens and utility tokens; downloadable software for use in financial trading; downloadable software for use in financial exchange; downloadable virtual goods, namely, non-fungible tokens; blockchain-based non-fungible tokens (NFTs) and NFT collectible series; digital media, namely, digital collectibles, digital tokens, non-fungible tokens (NFTs), cryptocurrencies, and digital art; digital media, namely, digital property granting the owner thereof exclusive ownership over said property but not necessarily any digital or analog copies of the same featuring information, content, or other forms of expression that can be digitized to provide the owner of said digital property with a unique certificate of authenticity and ownership; downloadable digital media, namely, digital collectibles created with blockchain-based software technology and smart contracts; digital currency wallet and storage services software

35 : financial exchange of virtual currency in the field of digital currency, virtual currency, cryptocurrency, digital tokens, crypto tokens, utility tokens, and non-fungible tokens (NFTs); financial transaction services involving digital currency, virtual currency, cryptocurrency, digital tokens, crypto tokens and utility tokens; financial services, namely, providing a digital currency and a digital token of value for use by members on an online community via a global computer network; financial services, namely, providing electronic transfer of a digital currency for use by members of an online community via a global computer network; issuance of digital tokens; issuance of non-fungible tokens of value used with blockchain technology; cryptocurrency trading services; cryptocurrency exchange services; cryptocurrency exchange services featuring blockchain technology; cryptocurrency payment processing; providing financial information in the field of digital currency, virtual currency, cryptocurrency, digital tokens, crypto tokens and utility tokens, and non-fungible tokens; issuance of non-fungible tokens of value used with blockchain technology for data storage and content access limitation; financial services, namely, providing liquidity services in the nature of currency exchange services in connection with digital currencies and assets, cryptocurrencies, virtual currency and blockchain-based assets

36 : provision of an online marketplace for buyers, sellers, and traders of downloadable digital goods authenticated by non-fungible tokens (NFTs); provision of an online marketplace for buyers, sellers and traders of virtual and digital assets, artwork, collectibles, and non-fungible tokens; online marketplace services, namely, providing an online marketplace for buyers, sellers and traders of digital currency, virtual currency, cryptocurrency, digital tokens, crypto tokens and utility tokens; providing a website featuring an online marketplace for buying, selling and trading virtual goods with other users; develop and design virtual retail stores, virtual stores, and virtual showrooms for others provision of an online marketplace for buyers and sellers of downloadable digital goods authenticated by non-fungible tokens (NFTs); provision of an online marketplace for buyers and sellers of downloadable digital art images authenticated by non-fungible tokens (NFTs)

42 : non-downloadable software for virtual reality, augmented reality, and mixed reality; non-downloadable software for enabling users to experience virtual reality and augmented reality visualization, manipulation, and immersion; non-downloadable software to allow users to perform e-commerce and financial transactions; non-downloadable software to allow users to make payments, transfer funds, and processing payments; non-downloadable software to allow users to buy, sell, and trade financial instruments; non-downloadable software for digital, virtual, and crypto currency wallets and storage; non-downloadable software to allow users to access, maintain, store, display, buy, sell, and trade virtual and digital assets, artwork, collectibles, and non-fungible tokens; non-downloadable software for sending, receiving, accepting, buying, selling, storing, transmitting, trading and exchanging digital currency, virtual currency, cryptocurrency, digital and blockchain assets, digitized assets, digital tokens, crypto tokens and utility tokens; non-downloadable software for use in financial trading; downloadable software for use in financial exchange; providing a website with information on financial instruments, financial exchanges, digital wallets, virtual wallets, cryptocurrency wallets, digital assets, digital artwork, digital collectibles, non-fungible tokens, digital currency, virtual currency, cryptocurrency, digital tokens, crypto tokens and utility tokens; platform as a service (PaaS) featuring computer software platforms for providing access to crypto-collectibles, crypto-art, and application tokens; authentication and certification of data relating to cryptocurrency and non-fungible tokens (NFTs) via blockchain; authentication of data in the field of blockchain tokens and smart contracts using blockchain technology; authentication of data in the field of collectables and art using blockchain technology; authentication of data in the field on non-fungible tokens (or NFTs) using blockchain technology; electronic storage of cryptocurrency for others; electronic storage services for archiving electronic data; providing a website for the electronic storage of fungible and non-fungible tokens; providing user authentication services using blockchain-based software technology for cryptocurrency transactions; and non-fungible token marketplaces and auctions; design and provision of online platform to facilitate the transactions of cryptocurrency and non-fungible tokens (NFTs); providing a website featuring technology that enables users to electronically trade, store, send, receive, accept and transmit digital currency and non-fungible tokens; computer services, namely, hosting an interactive web site that allows registered users to create and sell NFTs, to design and create customized profile pages, to interact with one another (whether based on NFT ownership or not), and to buy, sell, and trade NFTs; computer services, namely, hosting an interactive website that allows registered users to purchase, collect, hold, and transfer various blockchain tokens, smart contract rights, and/or non-fungible tokens (NFTs) (all collectively blockchain assets), to view their collection of blockchain assets through a user interface, and to buy, sell, trade, or offer to buy, sell, or trade the blockchain assets

USA 10.02.2022
Gabrielle Studio, Inc. DKNY 09 : downloadable virtual goods, namely, computer programs featuring clothing, colors, badges and tools for use in online virtual environments.

41 : entertainment services, namely, providing on-line, non-downloadable virtual clothing, colors, badges and tools for use in virtual environments created for entertainment purposes.

USA 17.11.2020
Puma SE 09 : downloadable virtual goods, namely, computer programs featuring footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys, and accessories for use online and in online virtual worlds; downloadable computer software for interactive games for use via a global computer network and through various wireless networks and electronic devices; downloadable software for engaging in social networking and interacting with online communities; downloadable software for accessing and streaming multimedia entertainment content; downloadable software for providing access to an online virtual environment; downloadable computer software for the creation, production and modification of digital animated and non-animated designs and characters, avatars, digital overlays and skins for access and use in online environments, virtual online environments, and extended reality virtual environments.

35 : providing an interactive website and computer application software for virtual reality game services.

41 : entertainment services, namely, providing on-line, non-downloadable virtual footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys, accessories, digital animated and non-animated designs and characters, avatars, digital overlays, and skins for use in virtual environments; virtual reality and interactive game services provided online from a global computer network and through various wireless networks and electronic devices; entertainment services, namely, providing online non-downloadable game software and online video games; entertainment services, namely, providing virtual environments in which users can interact for recreational, leisure, or entertainment purposes; entertainment services, namely, providing an online environment featuring streaming of entertainment content and live streaming of entertainment events; entertainment services in the nature of organizing, arranging, and hosting virtual performances and social entertainment events.

42 : non-downloadable computer software for the creation, production and modification of digital animated and non-animated designs and characters, avatars, digital overlays and skins for access and use in online environments, virtual online environments, and extended reality virtual environments.

USA 11.01.2022
Nike, Inc. NIKE 09 : downloadable virtual goods, namely, computer programs featuring footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use online and in online virtual worlds.

35 : retail store services featuring virtual goods, namely, footwear, clothing, headwear, eyewear sports bags, backpacks, sports equipment, art, toys and accessories for use online; on-line retail store services featuring virtual merchandise, namely, footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories.

41 : entertainment services, namely, providing on-line, non-downloadable virtual footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use in virtual environments.

USA 27.10.2021

 

Other entities that have similar filings are Ralph Lauren (in respect of store services in Class 09, virtual products for online virtual worlds in Class 35 and online, non-downloadable virtual products for virtual environments in Class 41) and Walmart (for virtual reality game that features a virtual version of a store selling virtual goods), amongst others.

 

Multiple applications for this space have also been filed by the likes of Alibaba Group HoldingTencent Holdings and ByteDance. which are pending review at the Trade Marks Office, China, while some have already faced rejection.

 

Recently, two trade mark applications were filed in the US by third-parties for the Gucci and Prada logos in a range of metaverse-related arenas, including downloadable virtual goods, virtual worlds and virtual clothing used in virtual spaces. On metaverse platforms with user-generated content, such as Roblox, creators are currently selling clothes that feature logos from the likes of Louis Vuitton, Prada and Chanel[1].

 

In another recent news, luxury fashion house Hermès initiated legal action against artist Mason Rothschild for launching a follow-up collection after previously selling an NFT artwork “inspired” by the iconic Birkin bag. Hermès stated that the NFTs “infringed upon the intellectual property and trademark rights of Hermès and are an example of fake Hermès products in the metaverse”. Their cease and desist letter was replied to by way of an open letter on his Instagram account.

Therefore, businesses need to understand the importance of IP prosecution and enforcement in this space before it is too late.

Filing Trademarks for the Metaverse

While filing trade marks for the metaverse, one must consider the word / device mark, logo, tagline, shape of products, packaging, colour combination and the non-conventional marks such as architecture and layout, and sound / motion / hologram / pattern / smell / taste marks.

Further, while the Nice Classification is yet to be updated to accommodate the recent development, the relevant classes at present would be 9 and 42 as the primary classes and 35, 38 and 41 as the secondary classes. to cover virtual products / spaces / stores, non-downloadable products, downloadable virtual products, NFT, crypto / digital coins/tokens/currency, digital overlays/animation etc. as the specifications.

The theory of zone of expansion, that is, a consumer’s assuming a relation / connection of certain goods or services with a brand offering similar goods or services, would come to the rescue in the matters of conflict in the metaverse. For example, if a business deals in clothing under its mark / brand, the said entity may be able to prevent a third party from using their mark / a similar mark for virtual clothing and footwear. The points of contention would, however, be to prove the first user of the mark, that is to prove the first use in the metaverse, and also reasonable deception and confusion even if the trade channel, point of purchase, purpose and consumer base are different.

With the rise in and new found need for virtual events, the time is not far that the virtual world would be the space with much activity. There would be a plethora of entities making money off of providing goods and services in the metaverse to increase virtual footfalls at such events. This would be a breeding ground for IP (specifically trade mark) infringements.

Even if the infringers do not copy the trade marks, infringement of other IP rights in the trade dress, copyright and / or design would be rampant. There would be a need for innovative protection of IP rights, such as the hospitality industry protecting their physical location layouts (by way of 360 degree views) and the fashion industry protecting its artwork and designs. This would indeed be a brand’s and an IP practitioner’s nightmare in terms of due diligence by way of investigations, market surveys, trap purchases, takedowns, collection of evidence, seizure of products by way of raids etc. The IP offices and Courts would also have to change their traditional way of handling of such matters.

[1] https://www.voguebusiness.com/technology/how-to-trademark-the-metaverse

For more information on Metaverse, please write to us at info@ssrana.com

For more information please contact us at : info@ssrana.com