How Do Trademarks Protect Brands In The Metaverse?

Over the last few years, mostly after the COVID pandemic, both startups and large companies around the world have shifted more online while work has become more gamified, tech-infused and more digital. To make your business sustain and grow, you need not to have a physical office. If your company is contemplating selling branded virtual goods and services in the metaverse, trademark applications should be filed as soon as possible. But how do you apply to protect your brand for a digital sneaker? What description of goods and services is appropriate, and what classifications are apt? We have heard of Augmented and Virtual Reality; these terms are commonly used about digital worlds imitating real ones. If your company is contemplating selling the branded virtual goods or services in metaverse, trademarks should be filed; sooner the better. These technologies offer us a platform wherein we get to experience new space, a virtual world. This virtual world is composed of online, shared, and persistent digital spaces. A common term that is in use to address the virtual world is ‘Metaverse.’

What Is Metaverse?

Metaverse in the simplest of terms, is a virtual space in which users are and can interact and connect with each other in myriad ways – shopping, gaming, collaborating, and exploring – in the comfort of their couch. Here, people can do almost all things that are possible within the physical world. However, it is subject to the limitations of digital technology. You can socialize as well as work or play games just by entering into the virtual world. You can own goods or sell your goods just like in the real world. The use of the term is not new; it was first used in a science fiction novel named ‘Snow Crash’ by Neal Stephenson in 1992. Today, in this age of technology, metaverse and its enabling technologies are amplifying new ways to help companies achieve their goals—from learning and development to the operational efficiency of assets. It is creating new digital behaviors, too. Companies are now able to hold virtual training sessions using VR and AR headsets to train, visualize and collaborate with their remote teams more effectively. This helps bringing workers from around the world together experientially. Metaverse will be an immersive, next-generation version of the Internet; unlike the Internet, which is two-dimensional, it is three-dimensional. You can experience it through connected AR & VR headsets or glasses. There is no unanimity on a single version of Metaverse. Video games like Fortnite, Roblox, and Minecraft have millions of people interacting in shared spaces- playing games and building things. An early example of the virtual world is Second Life; it provides the user of the platform to live a second life by making an ‘Avtar’ (a virtual representation) of themself. These Avatars can interact with other residents (i.e., other avatars), sell and buy the property, or engage in individual or group activities. Cryptocurrencies are also likely to be heavily used in transactions across the Metaverse platforms. Non-Fungible Tokens would be used to own goods within the Metaverse.

How do Trademarks protect brands in the Metaverse?

Trademarks safeguard the identity of a company and the reputation of its brand, including in the Metaverse, by keeping imitators at bay. By registering trademark, the owner’s ownership in protected and it also legally recognizes the company, thereby saving the company’s interests. Trademark registration helps the owner to have exclusive rights to use the trademark and access basic legal tools to prevent it from infringed. The advantages of using a trademark in the Metaverse are:
    • Makes it easy and cost-effective for customers to find their products
    • Deducts marketing expenses
    • Helps building brand identity

How is Metaverse going to impact Businesses?

The Metaverse will provide information about user behavior in an entirely different dimension. Companies could use that customer information to increase their sales or brand awareness in the real world. The advertising opportunities would also increase. There would be virtual retail stores, digital products, training classes/schools, or events like virtual concerts, etc. This would mean that companies must protect their intellectual property in the virtual world too. Brands have started to trademark their goods in the virtual world. Facebook has changed its name to ‘Meta,’ focusing on creating a ‘Metaverse’ of its kind wherein people would interact and engage just like the real world. Companies are now speculating a successful future of the ‘metaverse.’ For example, Walmart has been using virtual reality to train associates in low-risk, experiential learning environments for years now. This not only boosts confidence, but also helping the company to standardize operations and service. Additionally, for the engineering, procurement and construction (EPC) companies like my company, Black & Veatch (BV), metaverse serves as a door of opportunity, by helping to build top priority on developing and maintaining a strong safety culture.

Protection of Trademarks in Metaverse

Brands can protect their goods/services by trademarking their name(words), logo, phrase, or design. This would prevent any passing off or infringement of goods/services by another company. So far, companies have applied to the United States Patent and Trademark Office (USPTO) and European Union for the registration of their trademarks. With the development of the Metaverse, brands would need to safeguard their trademarks. A trademark that is actually in use in the physical world by a company may be trademarked in the name of another company in the Metaverse. This has happened with very well-known brands Gucci and Prada, wherein trademark applications were filed by third parties for the use of logos of these brands. The brands have taken legal action against the parties who have applied for trademark applications. It is to be noted that though popular brands can still have their trademarks protected by preventing others from use in virtual space, it will be difficult for small brands to convince courts to reject trademark applications of the opportunist who apply earlier than them. Therefore, brands must apply in Metaverse for trademark registration as early as possible to safeguard their reputation and goodwill.

The Way Forward

Though some experts believe that current legislation would suffice, protecting brands in Metaverse. Others think that present legislation won’t meet the requirements in all situations. However, they advise registering trademarks and availing services of a trademark watchdog. Before taking any legal action against any possible infringer, they must evaluate the nature and use of the mark, as not all users in the Metaverse are actionable. It is also advisable that brands look further ahead to licensing and distribution agreements so that they retain rights to the Metaverse. As the law evolves with the development of AR &VR technology, a separate and coherent law would be required considering all possible scenarios considering cross-border protection. As e-commerce is an ever-growing space, protecting trademarks essentially depends on the enforcement of the existing laws as well as prompt actions on the part of the government and trademark owners in the virtual world against opportunist registrants.
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