The use of trademarks in the metaverse raises questions not only on the commercial strategy to promote the brand and the distinctive elements of a company, but also on the legal forms of trademark protection and defense. The explosion of online trademark use requires a clear understanding of effective ways to protect brands against counterfeiting, to ensure the end customer is actually buying the branded product.
Our lawyers dealing with international trademark protection are studying the legislation to find ways to effectively protect companies’ online brands, since everyone wants to now enter the Metaverse and conquer its space and visibility.
The Metaverse as an opportunity for brands to find new forms of investment.
Facebook, Microsoft, Epic Games are just some of the major brands investing in virtual reality. Digital spaces are growing and new opportunities for sales of goods and services will soon open up. Maserati, Aston Martin and Tesla have already launched virtual car models in the Tencent game. Ralph Lauren released a 50-piece digital collection in August 2021, available for purchase through social networking app Zepeto.
Land and property can also be purchased in the metaverse. In March 2022, the first Metaverse Fashion Week in the history of fashion – and of the metaverse itself – was held in Decentreland where brands such as Hogan of the Tod’s group presented by NFT (Non-Fungible Token) a digital reinterpretation of the first virtual luxury sneakers.
NFTs and metaverse. The new digital advertising campaigns revolution
The revolution didn’t start yesterday. The information driving customers’ purchases is now primarily digital, as Generation Z spends an average of 7 to 9 hours per day on digital devices. For brands, the metaverse is not the future – it’s the present.
How large international companies protect themselves from trademark infringement
The direction taken by many large entrepreneurial realities such as Nike is the filing of new trademark registration applications, to be specifically dedicated to products marketed in the metaverse. Nike Just Do It, Jordan Air Jordan trademarks are already registered for the marketing of shoes, clothing and accessories that can be used in online virtual environments. Nike has gone even further, creating Nikeland on the Roblox platform, which is essentially a digital city where you can only buy digital Nike products to “practice” sports online, such as parkour.
The importance of brand protection in the metaverse
It’s easy to see how the use of trademarks in the metaverse not only raises commercial strategy challenges, but also questions about the appropriate forms of trademark protection: for example, is it necessary to register a trademark for software production, or is traditional protection automatically effective in the virtual world?
Filing new brands in virtual cities
Digital logos, in addition to being distinctive signs of the products within the virtual world of the metaverse, will also show on clothes and accessories of the avatars/consumers. Some brands are already selling digital assets such as NFTs, so as to give exclusivity to the virtual object purchased in its digital version. In fact, just like in the real world, metaverse users give their virtual alter egos a unique personality: hence the bet of fashion brands such as Louis Vuitton and Balenciaga on collections and skins for games like Fortnite.
Adidas, as well as Nike and Puma, has filed trademark applications for the metaverse, with the intention of offering downloadable virtual goods to be used in virtual worlds. Victoria’s Secret also made its first step into the metaverse by filing trademarks for downloadable virtual goods, computer programs to create and trade digital collectibles using blockchain-based consensus protocols and smart contracts.
Companies are applying for trademark registration for new types of products and services. In this sense, the product classes listed by the Nice Classification may need to be revised.
Metaverse and Metarights: new legal challenges in case of trademark infringement
The race for the metaverse has already begun, not only for trademarks registration, but also for the first forms of fraudulent counterfeiting of famous brands, as already happened to Gucci and Prada.
Undoubtedly, light will have to be shed onto license agreements relating to trademarks and their use: it will be necessary to identify the rights of licensors and licensees within the virtual world, identify new technological clauses and define the territorial-virtual perimeter. It will also be essential to identify the faculties granted to consumer avatars.
Problems related to brand management by consumers
There are platforms, such as the Animal Crossing game, where players can use famous logos to create clothes for their avatars. Therefore, questions arise:
- How are these creations managed?
- Are they exportable to other platforms?
- How freely can trademarks be used in the metaverse? With what limitations?
- What happens if the brand is used inappropriately, perhaps in a violent context?
- Can the principle of exhaustion be applied in the metaverse, according to which the owner of an industrial property right who places his assets in the territory in which the trademark is protected can no longer oppose the further and subsequent circulation of such assets?
The problem of license agreements and evidence gathering
For lack of proper licensing agreements, metaverse platforms could therefore risk being accused of counterfeiting due to the activity of their users. Contractual agreements are inevitably destined to become even more detailed and fundamental. Not to mention the matter of gathering evidence of breaches within the metaverse: identifying and locating offenders can be more challenging than it already is in the real world, requiring advanced investigative methods, able to identify offenders and situations at risks of breach in the metaverse.
In addition to constant monitoring, the investigators of the virtual, be they individuals, automated systems and/or artificial intelligence, will have to implement techniques to keep up with the dynamism of the metaverse. In the same way, it will be necessary to identify new ways of quantifying the damage: how can damage deriving from counterfeiting be quantified within the virtual world?
The extent of the legal disputes awaiting us is evident, and the more operators know how to anticipate, imagine and evaluate the scenarios, the more controllable the consequences will be. Opportunities in this scenario really are the next big thing, both for tech companies looking to monetize their existing intellectual property in the metaverse and for companies tracking user avatars enjoying the goods and services on offer.