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News blog29 July 2022European Innovation Council and SMEs Executive Agency

Intellectual Property in the Metaverse. Episode 5: Enforcement measures and conclusions.

metaverse

As seen in previous episodes, a new parallel world is arising in the Metaverse, where users have created avatars, original content in the form of NFTs, or even marketplaces to sell and purchase virtual products.  

As a consequence, many Intellectual Property Rights (IPRs) are involved, from trade marks to patents or copyright, and disputes involving those rights are starting to take place. Therefore, the need of having efficient protection and enforcement mechanisms in the Metaverse as the ones foreseen in the current legal system is more important than ever, as IP rights owners are facing new challenges.  

Moreover, as the Metaverse does not belong to a concrete jurisdiction and as it is difficult to identify the real identity of the infringer, as the blockchain grants privacy, the enforcement of rights presents a higher complexity. 

 

ENFORCEMENT

As mentioned above, right holders are more and more aware of the importance of adopting preventive measures to protect their IP rights in the Metaverse. Notwithstanding, in case of infringement it is possible to resort to enforcement measures.

The recent infringement cases amongst Metaverse users have shown that these are (for the time being) mainly related to NFTs infringing registered trade marks or copyright. For instance, the MetaBirkins case, in which the artist Rothschild was sued by Hermès for creating and commercialising in the Metaverse around 100 NFTs extremely similar to the notorious “Birkin” bag. The lawsuit was filed before the U.S. District Court for the Southern District of New York, which upheld the claim, and rejected Rothschild’s claims to dismiss the action. The decision has not been issued yet, but the outcome will probably be considered as a landmark decision in the field of trade mark infringement in the Metaverse. 

On this occasion, the lawsuit was filed before a national Court as a normal claim. Since the alleged infringer was a natural person who had identified himself, it did not pose problems of anonymity.

In this sense, it seems that as far as the person is identifiable and there is an IPR infringement situation, right holders can resort to national courts to enforce their rights. 

However, the issue becomes more blurred with regard to disputes against Metaverse platforms. In this sense, there are still unresolved questions as regards the enforcement of IP rights. 

First, the responsibility of platform owners to deal with the enforcement measures is not yet clarified. Will they have to implement enforcement mechanisms, to resolve IP disputes at a non-judicial level? 

Then, which territory or jurisdiction is competent to examine those infringement claims that could take place in the metaverse? 

In the event that an avatar will be liable of infringing another user’s IP rights, will the platform owners have some responsibility to identify the avatars, if required? 

Currently there are no obvious answers to these questions, which will have to be answered as the metaverse evolves.

 

CONCLUSIONS 

As we have seen in the course of the 4 previous publications on this topic, trade marks, copyright and patents have experienced an exponential growth in the past months within the Metaverse. On the one hand the growth of the latter has been an opportunity for companies to expand their commercial interests to these virtual platforms like Roblox or StockX, thus an opportunity to engage new customers. 

On the other hand, others are demanding to adapt the existing regulations to this new reality and to create new legal provisions for the Metaverse, in order to grant users a better protection. 

For the time being, it would be advisable that IP right holders keep their portfolios updated to match their activities in the digital world. 

In terms of trade marks, a good strategy can be to file new applications, designating classes for virtual goods and services for products that are going to be commercialised in the Metaverse. Indeed, monitoring closely third parties’ activities in this digital world is an efficient method to detect possible infringements. 

As regards copyright, it is important to protect both the software that runs the Metaverse, but also the new works created within the Metaverse. As in the case of trade marks, it is always advisable to monitor efficiently in order to stop possible infringers from introducing works generated outside the Metaverse – i.e. from the real world, like a painting or pictures-, and sharing them in the Metaverse without the authorisation from the copyright holder (or without benefiting from a copyright exception). 

In the patent field, apart from securing new inventions created for the Metaverse, the question of whether an invention created in the Metaverse by an avatar could be protected in the real world, meaning that if it possible to recognise an avatar as the author of the work, is still unresolved. 

At the moment, institutions like the EUIPO are already updating their practice to this new phenomenon, as they have experienced an increasing trend of requests involving new features. 

The EUIPO is updating the Trade Marks and Design Guidelines, in order to clarify the approach of the Office as regards the classification of terms like “virtual goods” or “non-fungible tokens”. 

As regards “virtual goods”, they belong to Class 9 of the Nice Classification, even though the applicant has to be specific on the concrete virtual good (for example virtual clothing). 

From its side, the new edition of the Nice Classification will include in Class 9 NFTs, as downloadable digital files authenticated by non-fungible tokens. 

 

This has been the last article of the Metaverse series, which hopefully has been interesting and have shed some light on this new and exciting topic. 

We will be back in September with more IP news!

 

Picture by Efe Kurnaz on Unsplash

 

Details

Publication date
29 July 2022
Author
European Innovation Council and SMEs Executive Agency