INTRODUCTION
The metaverse, potentially a realm of limitless creativity, can be described as an immersive online experience that makes use of Virtual Reality (hereinafter referred to as “VR”) and Augmented Reality (hereinafter referred to as “AR”) technologies and gadgets for the time being and the foreseeable future.
Although many think of the metaverse as the Internet’s next evolution, the idea is not something new. It is built on a notion that has been well-established in science fiction for decades and has been the subject of serious discussion and development for at least over a decade now.
Since big tech corporations like Meta (previously known as Facebook) and Microsoft announced their plans to create new metaverse platforms for both entertainment and business. Metaverse has acquired more attention and this has sparked interest from other industry participants to create ecosystems that are in line with the metaverse visions of the major companies in a way that is increasingly usable by the general public.
Entertainment, gaming, education, and finance are the sectors most likely to have an immediate impact from the metaverse. The metaverse ecosystem is projected to make extensive use of cryptocurrencies, which will help the sector to grow aggressively.
In such a transitional phase from the real world to the metaverse, it is important to understand that Intellectual Property Rights (hereinafter referred to as “IPR”) connected to the digital elements primarily build the metaverse.
In relation to the forthcoming metaverse, this article will explore the foreseeable potential and challenges for IPR owners.
ASCERTAINING JURISDICTION
Online services make up the majority of the metaverse as the host server’s location outside the IPR holder’s country may impede online enforcement. It may be required to analyse each country’s legislation independently to determine its notice-and-takedown regulations and website blocking strategies.
Nonetheless, the manner in which IP rules and practices have evolved in many jurisdictions complicates the process of comprehending the relevant jurisdiction. Administrative processes are often used to enforce IPR in some nations, while Court injunctions are frequently used and are easier to obtain in nations with more developed IP laws.
For instance, VR designers have built assets in the real world using metaverse earnings. In the near future, there might not be much of a difference between how IP rules work in the metaverse and the real world given the nature of the interaction, usage, and association of rights.
Before using a particular metaverse, users must agree to its governing rules. In addition, there are certain concepts, that have evolved for resolving for conflicts involving metaverse-related issues, as mentioned moving forward in the article. The way that various jurisdictions have interpreted the evolution of Public International Law in regards to resolving disputes must be taken into account while evaluating these regulations.
It’s interesting to note that Courts have occasionally used “long-arm jurisdiction” in India to settle conflicts concerning computer networks. For instance, the Court evaluated the definition of a computer network to decide whether the Courts in Delhi had the authority to issue a global injunction in Swami Ramdev & Anr v. Facebook & Ors., 2019 SCC OnLine Del 10701.
In circumstances where the issue is related to the rights of parties, Courts are taking into consideration the probability of resolving disputes through Arbitration. The lack of clarity in applying laws from other jurisdictions may raise severe concerns when issues related to products that are made available in the metaverse, even though observations in such circumstances may serve as a first guiding principle to resolve disputes between the parties.
PRODUCT LICENSING AND IP PROTECTION
Brand owners can keep control over their trademarks or copyrights by employing more advanced research tools specialised to identifying risks of infringement in the metaverse.
Virtual investigators (including people, automated systems, and artificial intelligence) may need to be utilised to help IP owners maintain track of how their IP is used in the metaverse in addition to habitually monitoring and looking for potential infringement.
In the United States, Nike and the National Football League (hereinafter referred to as “NFL”) have exploited the metaverse as a platform for business. Although users’ virtual avatars use their products and services, the cost is expressed in real-world currency. As a result, IP protection in the metaverse is more important than ever.
Minsky v. Linden Research, Case No. 1:08 cv 819 (N.D.N.Y. 2009), was one of the first cases involving issues related to the metaverse. The said case discussed the matter of trademark infringement in the metaverse.
Subsequently, it could be controversial to create goods or services in the metaverse based on a licence obtained in the real world. For example, can a licensee who has previously been given permission to produce and market ready-made apparel in the real world utilise that permission to sell the same clothing in the metaverse? Such concerns must be addressed since an unintended introduction into the metaverse by a licensee may result in the restriction of a new source of royalties.
Additionally, perceptions created by brand users in the metaverse may influence customers in the real world. Due to such potential problems and others, licensing agreements must necessarily be clear about the parties’ intentions and spell out the particular requirements that must be met with regard to the metaverse.
Special smart contracts with licensees may be advantageous from a technological standpoint to ensure that only authorised licensees can use a rights holder’s trademark in the metaverse.
CHALLENGES AND WAY FORWARD
It is harder to find and identify infringers in the metaverse and all types of IP assets in the metaverse are subject to this danger. For instance, there may be a risk of trademark infringement while purchasing and selling goods in the virtual market place, and the sale of copyrighted NFT artwork in the metaverse may include both real and imitation NFT artwork.
Additionally, concerns with trade secret misappropriation and patent infringement may arise as a result of the development of new technologies that may violate metaverse-related patents. These problems may also occur in virtual meeting spaces where sensitive information is discussed.
Proactive trademark registration for new categories of goods and services, especially unconventional trademarks, helps mitigate these difficulties and hazards. A non-traditional trademark may become registrable by developing acquired distinctiveness through persistent use while conducting business in the metaverse.
Moreover, frequent surveillance and research to gather data and spot trends of online infringement can boost the creation of new IP enforcement techniques. Although metamorphosis, which means adopting the virtual avtar, has been upheld as a legitimate defence against the infringement of personality rights, its misuse in the metaverse is more likely to cause harm to the individual whose personality rights have been infringed upon.
Another issue that requires special solutions is the consideration of the type and implementation of the technology underlying the metaverse. It is true that Courts and tribunals have examined the technical impacts of software and granted patents based on those findings.
The real concern, though, is at what point such technologies start to have effects that weren’t there before. Although the metaverse environment is giving users a distinctive experience, the identification of the underlying technology as original and not a combination of pre-existing technology must be done with great care.
AMLEGALS Remarks
The metaverse, which will bring forth new atypical trademark types, goods, and services embracing a variety of trademark categories, and new patentable VR and AR-related technologies, seems to hold great promise for IP. The transition to virtual reality could lead to new problems with protecting trade secrets.
The virtual environment will require new methods to maintain this secrecy beyond the conventional methods of signing non-disclosure agreements or limiting access with biometric technology. This is because the establishment of appropriate measures to maintain secrecy is one of the fundamental legal requirements for protecting trade secrets.
While IP legislation and IPR owners may face difficulties as a result of the metaverse, there will also be significant potential for IP to advance and harmonise with the metaverse ecosystem. Taking advantage of these fresh chances to adjust to the metaverse will be both beneficial and important to maintain the ongoing adaptation of IP law to cutting-edge technical developments.
– Team AMLEGALS assisted by Ms. Priyanshi Jain (Intern)
For any queries or feedback, please feel free to get in touch with chaitali.sadayet@amlegals.com or mridusha.guha@amlegals.com.
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