[co-author: Nikith Chavali]*
The Metaverse is a term used with increasing frequency in a broad array of industries including video game systems, social media platforms, and even healthcare. The Metaverse is a virtual environment whose digital attributes persist even if the user is not logged online. It is similar to gaming systems like Farmville and Second Life in that a user interacts with a virtual environment. What makes the Metaverse more complex is its integration with new technology. Wearable technology such as the Oculus give the Metaverse the capability to virtualize almost all facets of the real world. The similarities to the real world and high functionality can lead to legal issues, including trademark issues.
The Metaverse allows users to interact with the virtual environment in the same way they would with the real world. This means that virtual products within the Metaverse may mimic real-world products. This creates both opportunities and risks for brand owners. On the one hand, it presents the opportunity to engage with consumers in new, fresh ways and it opens potential licensing revenue streams. On the other hand, it creates the risk of infringement by Metaverse entrepreneurs. As an example, imagine you are a shoe manufacturer known worldwide for your distinctive, high-quality products. Your brand is instantly recognizable and you have diligently protected the brand. A virtual shoe store opens up in the Metaverse selling virtual shoes to users. You discover this virtual shoe store is selling your exact shoe, albeit virtually. If you are not already in the Metaverse and have not filed trademark applications covering virtual products, the infringing party may argue that your existing trademark protection does not extend to the Metaverse. Additionally, the infringing party may argue that because you don’t offer a competing virtual product in the Metaverse consumer confusion is not likely. These arguments may prevail, especially in countries that require registration for trademark protection.
To address such infringement, brand owners should consider filing trademark applications covering products in the Metaverse. These applications would have the additional benefit of supporting Metaverse licensing efforts and meeting the likely requirements for infringement takedowns on Metaverse platforms. Major companies like Ralph Lauren, Walmart, Nike, and Mcdonald's have filed trademark applications covering Metaverse products and services such as NFTs, downloadable virtual goods, products to be sold to virtual avatars, retail sales of virtual goods, virtual food items, and providing virtual restaurants. As with most things trademark, being proactive can save time, money, and headaches.
As with most things trademark, being proactive can save time, money, and headaches.
*2022 Summer Associate. Nikith is not admitted to the bar and contributed to this Client Alert under the supervision of Ms. Van Kirk.
