Bloomberg estimates that by 2024, the global metaverse will be worth over $800 billion. This is a 16-fold increase from the almost $48 billion earned in this expanding sector in 2020. The rapidly expanding metaverse presents a slew of legal issues and possibilities, including trademark enforcement and branding, marketing transactions, content partnerships and collaborations, market expansion, and consumer diversity. Companies – both established brands and start-ups – who want to operate in the virtual world at large or construct their own metaverse platform should be mindful of a number of brand-use and trademark difficulties.

Brands and Trademarks Form the Foundation of the Metaverse

Many brand owners are eager to utilize their current intellectual property in this new digital environment, therefore companies wanting a footing in the metaverse should be well-versed on trademark rights. Many businesses see the metaverse as an untapped market for advertising their goods and services, and are seeking for methods to participate in this emerging arena. Early-movers are registering their logos and trademarks for goods and services that are only available in the metaverse, such as downloadable virtual goods for virtual online worlds, retail stores that carry virtual goods, digital collections services, and others, in this vein (and potentially shedding light on future efforts in the metaverse).

Last year, Nike filed a number of trademark applications with the United States Patent and Trademark Office (“USPTO”), indicating the brand’s intention to sell virtual shoes and apparel in the metaverse, which it has since confirmed through its Nikeland venture on Roblox and its acquisition of RTFKT. Nike’s swoosh emblem, the “Just Do It” tagline, and Air Jordan designs are among the trademark applications. Furthermore, premium labels like Balenciaga and Gucci are experimenting with how they may utilize the metaverse to engage with “real-world” customers and create extra money.

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The metaverse’s many business ramifications might be difficult to manage, and prospective metaverse players could have trouble determining which rights belong to which stakeholders. The potential issues and ambiguities that arise from the proliferation of digital brands and their intersection with the metaverse highlight the need for companies in the video game, digital media, AR/VR, crypto, and other emerging tech spaces to develop comprehensive plans for protecting their assets and intellectual property while avoiding infringing on others’ rights.

Aspects of the Law

With this in mind, gaming, digital media, crypto/blockchain, and other Internet companies should focus on a few key legal issues…

Trademark Search and Registration — Technology and digital media enterprises that have mostly focused on Web 2.0 may now wish to explore renaming themselves as metaverse-first organizations, following in the footsteps of Mark Zuckerberg’s Facebook. However, renaming a corporation to reflect this new emphasis might cause a slew of problems. For example, a corporation hoping to profit from the popularity of terms like “meta” and “metaverse” by marketing sports goods in their gaming metaverse may encounter intense competition and/or infringe on already-filed trademarks and copyrights. Additional than 800 marks currently utilize the term “meta” as a prefix or word, and over 100 more applications for registration for comparable marks were submitted in 2021.

Furthermore, trademark applications such as “BRANDS IN THE METAVERSE” or “SPORTS IN THE METAVERSE” may be deemed invalid by the USPTO as being too general or descriptive.

Branding – The use and misuse of brand names in the metaverse is likely to be even more widespread than in the physical world, which is one of the main reasons why world-famous brands are filing trademark applications for virtual goods to coincide with existing registrations for their physical consumer product lines. Technology businesses interested in developing their own metaverse platforms should be aware that brand owners may defend their rights through effective means. As a consequence, metaverse providers may need to hire dedicated employees to monitor user-generated material, investigate any infringement, react to cease-and-desist requests from genuine trademark holders, and delete offers for counterfeit or infringing items. At least some platforms are adopting a proactive approach, allowing companies to post alerts and register complaints if their trademarks are being abused.

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Obtaining the assistance of an expert intellectual property attorney may assist these businesses in better understanding their obligations for policing infringements and strategies to avoid becoming parties to them. Secondary liability may be mitigated by having a thorough, sophisticated intellectual property policy in place. A metaverse service provider that fails to have a strong enforcement policy, for example, might be held accountable for trademark infringement that occurs in its metaverse corner.

Licensing – Many businesses and trademark owners are exploring with methods to profit from the metaverse via licensing. Some want to market their products and services, while others want to capitalize on the brand recognition of other companies. Commercial metaverse players and providers, regardless of their business models, must be able to negotiate and record proper trademark licensing agreements. Metaverse users, for example, may build avatars using a range of digital items (including branded ones), a feature that allows them to take on the identities of realistic fictional people in the virtual world. Metaverse platform operators may be accused of trademark infringement as a consequence of user behavior if they do not have the required trademark rights.

Providers must I comprehend the extent of rights, duration, territory, exclusivity, sub-licensing, royalty rates, and other aspects of any licensing agreement they join; and (ii) implement calendars and associated processes to guarantee that relevant requirements are followed and deadlines are fulfilled.

For suppliers, marketers, and brand owners looking to reach new audiences and improve brand loyalty via virtual products and services, the metaverse presents both possibilities and obstacles. As more companies use metaverse marketing techniques, adopting a strong trademark strategy will offer optimum protection and flexibility for all parties involved. Emerging technology firms may also benefit from a robust trademark strategy for monetizing their existing intellectual property in the metaverse.

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