Intellectual Property RightsLegal Impediments of Intellectual Property Rights in Metaverse

INTRODUCTION

The metaverse is an effort to combine Virtual Reality (hereinafter referred to as “VR”) and Augmented Reality (hereinafter referred to as “AR”) in online communities to expand the overlap between our social and digital lives in varied areas.

Although, previously divisive issues like data privacy, anti-trust, and Intellectual Property Rights (hereinafter referred to as “IPR”) are raised by pursuing this futuristic technological frontier, all of these must be addressed in order to utilize the technology’s capability efficiently.

New laws might be needed to prevent the abuse of cutting-edge technologies at the dawn of a new era. The metaverse is a parallel digital universe that requires the utilisation of exceedingly sensitive data for efficient service delivery, in addition to various sensors and software, all of which make managing these platforms more difficult.

Legal experts are concerned about new-age crimes that are not covered by existing laws as a small, but growing number of Indian users are indulging in the world of metaverse.

LEGAL ISSUES IN METAVERSE

IPR Infringement

The advent of the metaverse has witnessed an increase in trademark infringement as it is becoming increasingly easy to duplicate virtual goods. Businesses are worried about their trademarks being used online in addition to being used on physical products. There is now a gap in Government regulations that can offer remedies for violations of IPR over the virtual space.

Global and borderless nature of the metaverse

Due to the global and borderless nature of the metaverse, it is difficult to understand the jurisdiction of the disputes arising therein. In the light of the same, a new and comprehensive legal framework is the need of the hour. Such legal regulations should be uniform, and not any jurisdiction specific. Furthermore, an IPR-specific regulation should be introduced, in order to govern the potential IPR issues in the virtual ecosystem.

Security and Privacy Concerns

The metaverse platform is likely to collect enormous amounts of personal and sensitive personal data given the anticipated number of users. Subsequently, any AR-VR device’s privacy statement will often state that it will collect data on a user’s biological characteristics, physical environment, and other private information. As personal data and sensitive personal data is largely ungoverned in several parts of the world and in India, such collection and processing of personal data would bring several data privacy issues at the forefront.

Jurisdictional Concerns

Given the borderless nature of the metaverse, it is pivotal to determine that which set of laws would govern the virtual world and the metaverse ecosystem. In such a virtual environment, jurisdiction will be extremely ambiguous, which is a major source of worry for many government organisations.

The only viable solution is to work together to create legislation. The regulations must evolve in response to evolving dynamics, incorporating a variety of measures to handle new issues and provide solutions to the globe.

USE OF ARTIFICIAL INTELLIGENCE TO IDENTIFY IP INFRINGEMENTS

Media and tech giants, including Google, Netflix, Microsoft, Amazon, IBM, etc.,  have been using artificial intelligence (hereinafter referred to as “AI”) since a substantial period of time. By targeting potential infractions, AI can aid in the identification of IP infringements in the virtual ecosystem. Incorporating AI-based system for narrowing down on IP infringements won’t be a particularly difficult task as in the current digital era, several AI-based systems are developed and readily available for usage.

Businesses have embraced AI for a variety of purposes, including cybersecurity, sophisticated cloud and network orchestration, and customer services. Subsequently, AI can be used to identify IP infringements in the metaverse.

An AI-based machine learning system, for instance, could be programmed to narrow down and identify any kind of misuse, duplication or infringement of IP in the digital arena.  The usage of AI would lead to swift identification of IP infringements in the metaverse, as a result of which the IP owners can address the issues at the earliest.

MANAGING IP IN THE METAVERSE  

While the metaverse may evolve into an interoperable decentralised digital world in which individuals can freely migrate, the concept of a metaverse is currently being developed on multiple platforms with centralised ownership. As a result, brands seeking to operate in the metaverse must negotiate IP licensing with the respective platform provider.

In the event a brand makes a digital work for a metaverse platform, it should ensure that it has all the IP rights pertaining to such digital work for future use, if the brand wishes to transfer the ownership of such digital work to another entity.

Another issue that brands should work on is ensuring authenticity and protecting IP from digital infringements. While non-fungible tokens (hereinafter referred to as “NFT”) can serve as digital certificates that verify ownership, numerous producers have reported NFT infringements on digital platforms.

Even though brands and IP rights holders in traditional ecommerce can rely on a well-developed legal framework to protect their marks, the legal conditions for IP in the metaverse are constantly evolving. Nonetheless, brand owners should concentrate on robust methods of safeguarding and enforcing their IP, because an inefficient IP strategy in the real world is likely to be just as inefficient in the metaverse.

AMLEGALS REMARKS

Several disputes pertaining to IP in the metaverse are already coming to the forefront. Such disputes throws light on the issue of enforcement of trademarks in the virtual world, where digital products bearing trademarks are tied to digital tokens hosted on blockchain and then traded as NFTs. If such trademark usage leads to consumer confusion as to the source, and is hence infringing, an injunction could be sought.

The fair-use defences available to alleged infringers within the metaverse also need to be looked into to create a better regulated balance. Mostly, the laws of trademark infringement, passing-off and fair use would be applicable herein, subject to implementation of metaverse-specific legal framework.

It will be also interesting to understand the potential legal and ownership ambiguities pertaining to IP in the metaverse. For example, whether a mark registered and used only in the metaverse can acquire distinctiveness and be protected in the real world, whether AI generated work would be entitled for registration- if yes, then how shall be the ownership determined, etc. Therefore, on a concluding note, moving forward, the entire legal ecosystem of the metaverse is expected to undergo modifications depending on the legal issues prevalent in the metaverse.

– Team AMLEGALS assisted by Mr. Saksham Trivedi (Intern)