LESI's Consumer Products Committee and Trademark, Designs and Merchandising Committee will be jointly hosting a discussion about intellectual property in the Metaverse on July 6 at 8AM ET / 14:00 CET / 21:00 Tokyo.
The metaverse is a virtual world or network of virtual worlds that users inhabit with digital identities ("avatars"). Metaverse technologies are currently used in several internet-enabled video games as well as on social media platforms, but the technology is rapidly expanding.
Assets within the metaverse are digital assets that you can buy, sell, and hold online, but can't physically see or touch. Such digital assets can have independent economic value. Where digital assets can be verified using blockchain technology, they constitute non fungible tokens ("NFTs"). Types of NFT data units may be associated with digital files such as photos, videos, and audio, or any combination thereof. Because each token is uniquely identifiable, NFTs differ from blockchain cryptocurrencies such as bitcoin.
Branded products that were traditionally sold through wholesale and retail channels, can now also appear in the metaverse for example as branded digital footwear purchased for an avatar. Brand owners will need to review their existing trademark rights and determine whether they are sufficiently protected within the metaverse. For example footwear falls within class 25 of the International Classification of Goods and Services, but downloadable digital footwear likely falls within international class 9. Even goods that might fall within class 9 anyway, will require re-evaluation of the specification of goods covered by those trade mark registrations to ensure that they extend to downloadable versions of the products within the metaverse, and consideration should be given as to whether protection should be sought for "entertainment services" in class 41.
Brand licensing can be used for quality control, whilst technologies such as NFTs linked to digital assets as well as user terms and conditions will provide further layers of protection. Smart contracts can be used to automatically execute certain terms, for example termination for failure to achieve minimum performance criteria.
Purchase of a NFT will not automatically have the effect that the associated intellectual property rights are transferred – see https://stealthoptional.com/news/nft-group-rare-dune-book/. In some countries, it is not possible to transfer ownership of copyright without certain requirements being met, for example a written deed with signature by the assignor. An NFT is data on a blockchain. Professional advice should be sought to avoid purchasing what might simply amount to air.
The metaverse will have its own unique IP protection and enforcement challenges for IP owners. There will be challenges such as jurisdictional issues, it might be difficult or impossible to identify infringers, and removal of offensive NFTs may well be impossible because of the very nature of blockchain technology.
The meeting will be held remotely via MS Teams here.