Brands in Metaverse

The lines between physical and virtual reality are set for an overhaul as the Metaverse continues its gradual entry into our daily lives. While the Metaverse is still only in its infancy, the leading developers in the space have already made it possible for users to work, learn, socialize, play and do business in this exciting, albeit slightly bewildering new digital world.

Whether or not you have plans to integrate your business activities with NFTs and/or Metaverse, there is value in being aware of the threats and opportunities for brand promotion and protection that come with the evolution of the digital arena.

Brand Protection in Metaverse

You may have heard when Nike Company newly Apply to register a number of trademarks globally, which included claims in Class 9 for “downloadable virtual goods,” and in Class 35 for “retail store services offering virtual goods.” since then, Nike Company It has become much less isolated in their exploration of NFTs (non-fungible tokens) and the opportunities that exist in the Metaverse, as many other well-known companies have expressed interest in joining the evolving digital arena. An exciting recent addition to this category of companies is McDonald’s, early reports suggest McDonald’s can open virtual restaurantsas well as developing NFTs and selling virtual goods.

In the midst of this growing trend, it is worth asking the question whether strategies and procedures for protecting brands from misuse will also need to adapt to the new market. The answer, of course, will vary.

For trademarks used in connection with virtual goods or services, protection can begin by registering the mark in Class 9 (computer, scientific hardware and software), Class 35 (retail, business and advertising services), Class 41 (entertainment services), and/or Class 42 (scientific services). and technology).

However, only merchants of goods and services in the physical world might consider enrolling in these categories. In theory, anyone could make a product virtual, underscoring the need to be prepared to step in when it is discovered that someone else is making virtual copies of your goods, or applying your brand to digital materials without your permission. If you provide services such as entertainment, education, business, or legal services, there may be less need to tailor your claims to determine that they are offered roughly as well, however, this may depend on the exact nature of your services.

In Australia, a trademark provides protection against identical or similar trademarks claimed on the same or similar goods, services. Normally, virtual goods are not considered the same as physical goods such as clothing or jewelry. Australia’s rating system has not comprehensively adapted to the changing consumer landscape and there is currently no clear timeframe for when this will happen. While awaiting clarification, many trademark owners have adopted the strategy of including protection on hypothetical deliveries of their goods, as evidenced by the large number of recently suspended or registered Australian trademarks with claims to “digital material” or Downloadable virtual goods.

A potential demonstration of the value of this approach stemmed from the ongoing dispute between luxury goods company Hermès and Mason Rothschild, who recently created and sold 100 “MetaBirkin” handbags in the form of NFTs. While Hermes has US registrations for BIRKIN that cover physical bags, the registrations do not cover virtual merchandise or bag design. Hermès is now taking action against Mason Rothschild, alleging that NFT handbags created and sold by Mason Rothschild using the name “MetaBirkin” infringe the BIRKIN trademark. The merits of the claims have yet to be evaluated, but the US District Court for the Southern District of New York denied Mason Rothschild’s request to dismiss the suit, a promising outcome for Hermès.

A similar dispute arose between Nike Inc and StockX LLC, an online shoe retailer, on the grounds that StockX minted NFTs using the Nike trademark, without permission. In defense of their actions, StockX asserted that its NFTS is, in essence, a “key” to accessing a physical object stored rather than the “virtual products” themselves.

These disputes have thus far provided valuable purchases for trademark owners. First, and most obviously, registering your trademark also in relation to virtual goods may reduce the complexity of the dispute and/or the strength of any claims of trademark infringement. Second, the allegation of intellectual property infringement against the maker of an NFT may not be straightforward, since an NFT is just a digital token that transfers ownership of a digital asset. It can be thought of as a receipt proving ownership of an asset (such as digital artwork) rather than the asset itself. No doubt, further clarification from lawmakers about the impact of this distinction is welcome.

Regional and Metaverse

Another major problem with trademark protection in the Metaverse is that trademark registration grants protection only in the region where the trademark is registered. Conversely, the Metaverses may not have the same respect for the territorial boundaries we recognize in the physical world. Therefore, it will not always be clear what laws and within which jurisdiction disputes arising in the Metaverse should be considered.

Until a clear regulatory framework is introduced to solve this problem, trademark owners should be especially vigilant when it comes to detecting infringements and enforcing their rights against third parties. As a possible precaution, it may be beneficial at this point to register trademarks in multiple jurisdictions.

In short, there will be a lot of uncertainty for brand owners in the coming years as the expansion of the Metaverse and the usefulness of NFTs continues. To manage this uncertainty, you can consider:

  • Register your trademark in Classes 9, 35, 41 and/or 42 to cover digital deliveries of your goods and services or to specify that your services are also offered in virtual media or relate to virtual products.
  • Expand your regional coverage to ensure you capture all major markets.

The metaverse phenomenon is said to be a new version of the Internet, enhanced by online participation through virtual and augmented reality technology. But how does intellectual property work in this emerging internet world?

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