Metaverse: Starting points to consider for brand protection

28. March 2022

By Laura Lemos. Anti-counterfeiting Lawyer.

With the growth of interconnectivity plus the digital experience creating virtual reality and augmented reality, experts refer to the new space of human interaction as the Metaverse. The goal of this new space is that anyone can join it to work, shop and socialize. It offers, and is likely to expand, new ways for various industries to increase scalability, including new business opportunities and new ways to promote products and services at an even faster pace.

The scale and applications are almost limitless. The Metaverse allows users to showcase digital forms of art and ownership, and non-fungible tokens (NFTs), digital property records stored on the blockchain, allow users to price that content with proof of ownership.

Recently, it has become an important topic for companies, and it is estimated that revenue from virtual worlds could grow from approximately $180 billion in 2020 to $400 billion in 2025. The industries most likely to experience an immediate impact from the metaverse are entertainment, gaming, education, and finance.

While there is a lot of excitement and doubts surrounding existing digital assets, many individuals and companies are stepping up their efforts to market and provide virtual goods and services in the Metaverse. Thus, companies need to start thinking about the possibilities of entering the digital world and the series of new opportunities and risks that are to come.

As brands are preparing to find their place in this space, protecting and enforcing trademarks and other intellectual property rights is a key issue. Due to the complex nature of operations in Metaverse, trademark infringement and counterfeits are likely to occur regularly and will inevitably follow.

At this point, it is too early to determine how trademark protection and enforcement will play out in the Metaverse, so it will be important for brand owners to ensure trademark protection that extends to the Metaverse. In addition, as the complexity of interactions makes it difficult to identify infringers, new and advanced mechanisms are required to address the infringement.

Therefore, intellectual property rights owners should now be considering anticipating these potential risks and the merits of protecting their key brands in the virtual world.

Although trademark registrations for ‘real world’ goods and services might offer some protection against the use of the same or similar brands in the virtual world, the position and law are not straightforward.

Depending on the business model and future product/strategy, companies should consider a proactive approach and update their trademark protection and IP contingency prevention strategy. A business that fails to secure its trademark rights to virtual goods and services may find it difficult to combat infringement and effectively enforce its rights in the Metaverse.

Some forward-thinking brand owners have already taken action as last year has seen a huge increase in the number of trademark applications for virtual goods and services, driven by the development of the metaverse and other complex online environments.

Moreover, brand owners can stay in control of their trademarks by engaging in more advanced investigation methods, adapted to identifying risks of infringement in the Metaverse. Regular monitoring and searching to collect evidence and identify patterns of online infringement can help strengthen the development of new IP enforcement strategies.

Therefore, online monitoring, manually by humans as well as automated by artificial intelligence, would be of utmost importance to be deployed to help IP owners keep track of how their intellectual assets are used in this space.

While the metaverse is a very new and constantly evolving concept, it raises significant new questions. It already poses challenges for IP rights holders but presents also important opportunities for it to evolve and become compatible with the metaverse ecosystem.

Most importantly, companies must actively police their intellectual property rights to ensure they are not infringed on in the Metaverse. Taking advantage of these new opportunities for adaptation to the metaverse will be valuable and necessary to sustain the continued adaptation of intellectual property to new technological advances.

This should be considered whether companies are looking to invest in this space or not, as a breach can be quicker, easier and harder to catch in this new world. Overall, it will be important for companies to continually watch developments in this space, for both opportunities and risks.

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