A look at the Metaverse trend from an Intellectual Property perspective

By: Fabiola Sáenz and María Cristina González

The metaverse is a concept that has taken force in an undeniable digital reality that impacts the world. Both authors have defined the metaverse as that virtual universe to which we will connect through the Internet, interacting through various devices, which will allow us to have an experience directed to the senses, immersion, as if we existed within this universe. It is the translation of the physical world to the virtual world, where there will be people designed through avatars, places, and even the sale of goods and services.

The rise of the metaverse has prompted large companies to set their sights on this innovative digital concept, and move their chess pieces to adapt their businesses to this latent line. Companies such as Mac Donald’s, Nike, Zara, H&M, Hermès and others are leading the way and are already designing their marketing strategies to operate in this new virtual life, which shows that this reality is closer than we think.

Consequently, a number of questions arise around the subject, primarily aimed at understanding and sizing the impact of this universe on Intellectual Property, given the disruptive characteristics of the environment. Will the laws in force in the different jurisdictions worldwide be able to adapt to this new scenario, will a regulatory transformation be required for this new reality, how will the holders of Intellectual Property rights protect their intangible assets, and how will they protect their intangible assets? The truth of the matter is that, among so many doubts and, at the same time, the abrupt acceptance of the society of this digital world, it is necessary for the operators of the law to start by understanding the concept, analyze the scope of Intellectual and Industrial Property and initiate, in a timely manner, the necessary processes of regulatory transformation that may be required.

Trademarks and the metaverse

Delimiting the scope of the metaverse to the field of industrial property, and particularly to trademarks, there is a trend of registration of trademarks outside the traditional framework of classes that historically or usually have been used. This translates into an interest on the part of companies to expand trademark protection in order to be used safely in the digital environment. An example of this is the well-known fast food company Mc Donald’s, which, despite the fact that its line of business and sector of interest is very specific, has begun to register its trademarks under a classification, which is out of the usual, embodied in applications to protect, for example: products such as virtual food and beverages (class 09), virtual restaurant operations (class 43) or virtual entertainment services (class 41).

Likewise, class 25 (within the same Nice Classification), which includes all products related to clothing, footwear and headgear, has taken on a relevance worth mentioning, since the trend is that many of the “wearables” or clothing items now also allow some kind of interaction with the virtual world.

It follows then, the need to go beyond the traditional concept of trademark protection and the proactivity of companies to achieve protection for a digitized environment, regardless of how they have been operating in the physical environment. This aspect is of transcendence, being that, for the protection of intangibles, an extension of their protection should be contemplated as far as industrial registration is concerned.

NFTs, the favorite ones

Perhaps the most striking trend at present are the non-fungible tokens or NFTs.

They are conceived as unique, unalterable assets, created with blockchain technology, which are understood as the digital version of a physical asset, but which only exist digitally. They are traded through different platforms where consumers can buy and sell all kinds of NFT’s, ranging from collectible cards, “moments” starring celebrities, crypto-art, music, twitts, among others.

Now, the “boom” of these tokens has been particularly in the “crypto-art” sector and hence its relevance for Intellectual Property, since most of them are digital artworks and as any artistic work, it inherently has a copyright that must be protected.

Despite the apparent fascination of the world with the NFTs, there are already cases of violations of intellectual property rights, embodied in these digital figures, such is the case of the renowned French fashion house Hermès. It is known that recently the American designer Mason Rothschild created a hundred NFTs inspired by the famous “Birkins” bags owned by Hermès, under the name “MetaBirkins”. This prompted the company to sue the designer in federal court in Manhattan (New York). The arguments of the lawsuit allude to an enrichment of the designer for using in his NFTs, the said trademark without the authorization of the fashion house. Rothschild defended himself by stating that his product is art and that he does not create or sell fake handbags.

This case evidences the emergence of controversies around Intellectual Property rights and reveals a reality that denotes great ignorance of certain actors in relation to property rights (which also happens in the physical or tangible environment) but that certainly seems to have its origin in the novelty of the digital ecosystem that sees the birth of phenomena such as NFTs.

Will this virtual world take root?

Regardless of the doubts that have arisen around the possible establishment of the metaverse, welcomed by some sectors (independent artists, influencers, collectors) but not so well received by others (the financial sector, for example, which weighs the risk and volatility of the industry), the truth is that today it is a trend that could become a reality, and society has shown a real interest. We must adapt to change and the path to follow must be traced with a view to evolution but with parallel growth in the protection of intellectual property.