Intellectual Property in the Metaverse. Episode 1.

You might have noticed that everybody is talking about the Metaverse, hence we couldn’t miss the chance to include our contribution to this topic. 

This article is the first of a series of monthly publications that are going to highlight the interactions between the Metaverse and the Intellectual Property rights involved. 

As an introduction, in this first post we will start by defining some concepts as regards the Metaverse, in order to have a clear framework that will make it easier to understand how it works and, at a later stage, the IP concerns in play.  

 

What is the Metaverse?

 

The first reference to the term “Metaverse” can be found in the 1992 novel by Neal Stephenson, Snow Crash. 

Notwithstanding, there is no legal definition of the term metaverse, but in short, it can be understood as the mirror of the real world into a digital one. This parallel digital world clashes, and in a way interacts, with the real world. In this virtual reality world, users can socialise, interact, play and purchase products. Namely, a recreation of real life but in a digital parallel world. 

From this initial idea, back in the late 90s - early 2000s, some companies started developing parallel universes such as Second Life. Afterwards, they were followed by videogames platforms, such as GTA or FIFA which started to incorporate the possibility for users to interact between them.  Then, more videogames like Minecraft or Fortnite incorporated more functionalities, like payment methods based on their own in-game cryptocurrencies (like V-Bucks) which can be used to purchase outfits, or the so-called “wraps”, making possible to customise our character. 

More recently, Facebook’s creator Mark Zuckerberg changed the name of the social media platform to “Meta”, with the aim of developing a new social platform, in which users will be able to interact and socialise, represented through their avatars. 

At this stage, before going further, it is important to differentiate the types of existing metaverses. They can be separated in two types, depending on their structure:

- On the one hand, as for the above-mentioned platforms Minecraft or Fortnite, are examples of only one company in charge of managing all the aspects related to this metaverse, namely handling the economic activity among users or the data generated by them. These are called “centralised”. 

- On the other hand, there are the “open” metaverses, where rather than centralising the activity in a single company, the functions are decentralised, by using the blockchain technology. They are run by a Decentralised autonomous organisation (DAO), which is a useful tool to collaborate with unknown people, deciding your own rules and taking decisions in autonomy. As defined by Wikipedia, a DAO is an “organisation represented by rules encoded as a transparent computer program, controlled by the organisation members, and not influenced by a central government”. 

Therefore, there is no need to establish a centralised authority, since the decisions will be voted directly by the users and the rules are included in the code. 

Open metaverses, like Decentraland, are blossoming, as they result attractive to users since they are able to create their own digital world, by purchasing land plots, and visiting or interacting with other avatars. 

Avatars are a custom-tailored projection of ourselves in the metaverse, a representation of the user’s virtual identity. Current technologies in place allow users to have tailor-made avatars, which do not only have a physical appearance but also recreate the gestures and movements of an individual person. This is possible, simply by scanning a photo and transforming it into a three-dimensional avatar. Once the avatar is ready, users can access the metaverse by using virtual reality devices, such as glasses. Those AI devices incorporate a technology capable of reproducing in real time the movements and gestures of the user to its avatar, making the whole experience as realistic as possible.

As we will see, in order to protect these new technologies, patent applications are being filed by big companies.  

The idea behind is to really make users believe that their projection in the metaverse is as similar as it can be in the real world. To achieve this, the more accessories, clothing and properties you purchase, the merrier. As it happens in the real world, these “extras” are going to be essential for attributing our social status. 

For this reason, a whole economic system is boosting in the metaverse, with marketplaces, like The Sandbox, becoming a reference point. Big retail companies have already started commercialising their products in marketplaces placed in the metaverse, selling real clothing but also digital one, adopting the form of NFTs.

NFTs are experiencing a boom thanks to NFT marketplaces, like the above-mentioned The Sandbox. 

As a reminder, NFTs (Non-Fungible Tokens) are defined as new digital assets, powered by Blockchain technology, in which all the transactions are recorded. In other words, an NFT contains data stored in the form of artistic works, that can be traded on the blockchain. 

In this new digital environment, intellectual property rights will have a key role in different aspects. Trade mark disputes already arose, involving trade mark infringement and NFTs. As regards copyright, it will be interesting to see what will happen with artistic or musical works created or used in the metaverse. 

We can anticipate that there are many questions in the air regarding certain aspects like enforcement or liability, in case of possible infringements.  

 

We will analyse those questions more in depth in the next episodes. 

 

Stay tuned!

 

 

 

Picture by Efe Kurnaz on Unsplash