Event in Review: IP and Brand Protection in the Metaverse

4 min

In a recent event hosted by Lexology, Venable partners Justin Pierce, Calvin Nelson, and Marci Ballard discussed how various entities are seeking to prepare for a future of immersive, interactive, and engaging metaverse experiences. The panelists also explored the steps companies and organizations should be taking to protect their brands and trademarks in the metaverse, how interoperability in the metaverse is likely to lead to copyright challenges, and the role of design and utility patents in developing and leveraging intellectual property in this space.

Trademark Enforcement and Prosecution in the Metaverse

The metaverse has already created uncertainty around trademark enforcement and prosecution. In terms of enforcement, the decentralized nature of blockchain technology makes tackling infringements a lot more challenging – not least because of issues related to identifying infringers and whether they may be subject to personal jurisdiction. Furthermore, there is uncertainty as to whether courts will apply preexisting trademark rights to virtual goods. For example, it's unclear whether a legacy trademark registration for a two-dimensional mark will protect a trademark against an infringement in the 3D or virtual world. In terms of prosecution, questions are arising as to how different geographic jurisdictions will accept or grant registrations for metaverse and digital assets, and how virtual goods will be classified under the Nice Classification constraints of International Class 9. Stakeholders looking to establish a presence in the metaverse should evaluate how they can use existing brands and should seek registrations for existing or new source identifiers related to specific metaverse assets. Stakeholders who are not yet interested in establishing a metaverse presence should still be evaluating what defensive strategies they can implement to protect their brands, such as ensuring that new and existing trademark registrations cover the mark when used in the digital space.

Patents in the Metaverse

In the past five years, metaverse-related patent applications covering hardware and software in a variety of technologies have exploded, indicating that the colonization of the metaverse is well under way. Many of the hardware patents are related to devices used to enter the metaverse, such as virtual reality (VR) headsets or augmented reality (AR) glasses, while most of the software patents are also related to the user experience. Some companies have also filed patent applications for blockchain technology that could be applied to the metaverse as well as in the real world. Patents come in two forms: utility patents covering novel and useful inventions and design patents covering ornamental design. The biggest concern facing companies now is whether their legacy IP translates to the virtual world. Method claims, which relate to steps in a process, can easily be applied to the metaverse. But for apparatus claims, which deal with actual physical devices, courts will have to determine whether they are willing to credit virtual spaces as equivalent forms of infringement. Given all the uncertainty surrounding utility patents in the metaverse, companies should explore alternative strategies, such as layering design patents to get the protection they need.

Copyright in the Metaverse

Everything in the digital world is created by code, a lot of which (though not all) is protected by copyright. While this means that rights owners will have a degree of protection in the metaverse, it has given rise to a lot of software-related legal cases dealing with the defense of fair use. In certain jurisdictions, for instance, developers can be granted an exception under copyright law to use code from a prior program to make it interoperable with new software, and many countries and regions have legislation that provides exceptions for limited reverse engineering for the purpose of interoperability. This can limit software code owners' ability to assert and enforce copyrights in certain situations where code is considered indispensable to different computer programs trying to connect with each other. As the metaverse expands, we are likely to see increased tension between rights holders and entities looking to avail themselves of the exceptions that exist under copyright law for the purpose of interoperability.

Key Takeaways

When it comes to protecting digital assets, it's important to have knowledge of existing legal frameworks, which can be used to enforce IP in the virtual world, as it may be possible for a company to obtain relief based on their legacy IP. Companies should protect their digital assets the same way they protect their physical assets. Companies that have 2D logos or brands should consider transitioning them, where appropriate, to 3D. Patent applications are on the rise but may be more difficult to enforce in the virtual world. And, finally, rights owners should be aware of copyright challenges, as protection may be limited by need for interoperability.

Our IP attorneys are closely monitoring developments in the metaverse space and will continue to provide updates. We encourage you to reach out to our Intellectual Property Group with any questions.