Abstract
Metaverse is the new oil. Intellectual property rights (IPR) are a product of human curiosity and intelligence, so protecting them in the recent “virtual world” is of greatest need.
This paper addresses the issue of trademark, patent, & copyright infringement, while also talking about various legal precedents relating to intellectual property rights in virtual reality. In Metaverse, the laws that govern rights and duties are suboptimal but their implementation is highly commendable.
An attempt to suggest that pre-existing rules and duties could be amended with little legislative changes and new state-of-the-art oversight mechanisms to establish a “living” IP regime that moves efficiently with the pace of technological and scientific progress which is taking currently.
According to this paper the author also analyzes various issues arising from the enlargement of retail products and fashion in the virtual space by the author.
Keywords: Metaverse, NFTs, Virtual Fashion, Intellectual Property (IP), Copyright, Trademark, Patent.
INTRODUCTION
The concept of Metaverse is evolving slowly that is already well established in many fields such as medicine, sports, law, business. Moreover, no doubt that it helped in creating a large number of opportunities for fashion, retail brands and fashion designers, and “trendsetters.” Clothing digitally has become the latest or new fashion trend that isn’t just exclusive, but affordable as well. The alluring environment of Metaverse also provides goods and even materials in a virtual way. Intellectual property (that includes avatars which are created by different companies and their users) (IP) and due to this there is an increase in the issues enforced in IP rights in event infringement.[1]
Simply put, the Metaverse is an online, virtual world consisting of a series of interconnected 3D spaces called “World of Metaverse”. List of uses of Metaverse is as follows, people are able to interact with one another, share and if in need can create content, host events, participate in concerts, self-owned real estate, and even do business. This is an extensive connection maintained by augmented and virtual reality. Thus, Metaverse opens a new third dimension that users can explore in a realistic way. Metaverse is one of the top five trends that are news and projects to a worth of $810 billion before 2024.
The Metaverse enables people to use virtual reality (VR) headsets, goggles, and wristbands to socialize, to Collab with each other, adopting of different avatars, playing more realistic games, exploring of jungles virtually, meeting other people virtually, and much more like virtual conference rooms, dancing virtually in nightclubs, and can also attend concerts with friends virtually.
Like any virtual world, the Metaverse have some rules and regulations to ensure that the creativity, novelty and uniqueness of each participant is effectively protected.[2] This is where IP comes into play. IP protects the creations and ideas of the people of the Metaverse and is vital to the smooth running of the Metaverse world by preventing piracy, trademark abuse, and counterfeiting of the existing owners of IP.
With the context of this paper the author provides a broad understanding and explanation of the expansion of the fashion businesses in meta-verse by (NFTs) Non-fungible tokens and technology such as increase in the VR. There are discussions related to the benefits of virtual fashion from economic, social as well as ecological perspectives.
RESEARCH METHODOLOGY
The study is based on secondary data. This doctrinal study revolves around the Metaverse and its upcoming pros & cons. The collection of Data and information is from published papers, relevant articles, internet websites, etc. Also, includes various texts from legal and non-legal sections; the period of the proposed study will be limited to understanding the concept of Metaverse and its impact on intellectual property.
REVIEW OF LITERATURE
The author referred to several articles and newsletters during the process of writing this paper. Metaverse will have a major impact on the future of media companies and content production in general. But this is also an opportunity for intellectual property law to evolve with the introduction of new technologies.
FOUNDATION OF DIGITAL FASHION
The art of creating, accumulating and trying or wearing clothes in the digital space refers to, “digital fashion”. There is a great possibility of virtual fashion which has also been embraced by independent designers and big-name brands in response to technological advances. Digital clothing relies on different components and pixels.[3]
The ideology of virtual fashion originated from different kinds of video games, but various technology has evolved virtual fashion from solely basic to fashion. Gamers were noticed to purchase clothing, accessories, and skins for their characters without hesitation, but this did not affect gameplay.[4] This revealed that individuals are passionate about investing in virtual clothing. Formation of NFTs to allow designers to register their digital fashion in proprietary formats such as blockchain. This was the first step towards creating a true metaverse for the fashion industry.[5]
ADVANTAGES OF DIGITAL MODE
- Digital Fashion is Green:
All the Fashion companies accounts for about 15.5% of total greenhouse gas emissions. The fashion industry is the third largest polluter of water, as its approximately around 0.700 of gallons for making of a cotton shirt and about 2100 gallons (about 7570.82 L) to make jeans.[6] There’s good news with the advent of virtual fashion in the virtual world, carbon footprint from digital clothing production has been reduced by about 95% compared to physical clothing, thus significantly reducing air pollution and water waste. In addition, it’s a sustainable way because neither fibers nor other raw-materials are wasted with the production of garments physically.
- Reduction in Manufacturing Cost and Time:
Retail brands and Fashion can save money as they expand their business into the digital space with no manufacturing and logistics.
Moreover, the virtual innovation method takes less time in comparison of physical process of manufacturing and designing. Like for example, by entering the digital fashion space, PUMA reduced water waste by 17% and cut costs by 30%.
- Virtual Fashion is truly universal:
Virtual fashion promotes ideology, that everyone can wear whatever they want, regardless of height, body type, or gender. However, digital clothing can help eliminate such kinds of issues.[7]
Also, it’s easy for fashionable companies to make clothes which look good on each and every one.
METAVERSE ON INTELLECTUAL PROPERTY
Recently, there are numerous fashion businesses which are entering the NFT and metaverse space. In most of the situations, NFTs are bargained along with some authentic culture products at different prices higher than normally paid for actual pieces. Non-Fungible Tokens (NFTs) help owners reduce counterfeit security.[8] NFTs fight counterfeiting by expanding the ability to embed NFTs into physical products so they can be scanned to verify authenticity. This is an extensive connection maintained by augmented and virtual reality. Thus, Metaverse opens a new third dimension that users can explore in a realistic way.
However, if the information originally entered is false, NFT cannot fully guarantee its authenticity, as NFT will verify and maintain that falsehood in all recent sale of products.
- Metaverse on Copyright:
Legalized definitions of IP Rights such as copyright for assets like NFTs are neither managed nor recognized. This gives access to a dangerous cycle of ambiguity, controversy among the authors and different brands, the inability to get money back via the blockchain. Also, since this is a single transaction, I cannot make any complaints.
“Ownership” in this process is merely form of provision and licensing of different services.[9] The meaning of owner-ship is very complicated in this world. There was a case of Nike last year, where seven trademarks applications by Nike were registered before entering the Meta world. That application of trademark covered items that can be installed, goods that can be bought in stores, and clothes and shoes that can be worn like Snapchat, in virtual worlds. Ownership of property can be track down in the actual world. Even if one person owns equivalent physical property in the Metaverse, another person may have a corresponding digital object or property.
- Metaverse on Trademarks:
Trademark is basically a type of IP Right that is helpful distinguishing one company’s goods and services from those of another. Brands help establish brand credibility and ensure that the origin of a product is imprinted in the consumer’s mind. Once a trademark has obtained Protection of Trademark, it generally restricts others from the use of similar trademark. This creates confusion and deception in people’s minds related to the authenticity as well as reliability of the products and services.[10]
Top reputed companies such as Nike, Burberry, Gucci, Skechers, even an unidentified independent applicant is rushing to trademark their own meta goods. There are some companies which are considering use of NFT’s (Non-Fungible Tokens) to safeguard their IP Rights. Hermès, one of the most exclusive luxury brands, recently announced the creation of “MetaBirkins,” which is a 110 NFTs collection by some featured shaggy Biking bags, with its extensive use of the BIRKIN trademark. A trademark infringement case was filed & a dilution lawsuit against artist Mason Rothschild. Hermes claims the line famously goes against his BIRKIN trademark and trade dress. In response, Rothschild (a family which is one of the famous European Banking Dynasties) calls himself artist who use exempts him from obligations. Hermès, argued that this illegal use by third parties not only increases the potential for customer confusion but could also damage the company’s virtual goods marketplace.
Intellectual Property is a term that comprehends a broad range of creations, from copyrights and trademark to patents and its trade secrets. In the framework of the Metaverse, protectable intellectual property assets range from copyrighted literary works to all trademarks including trademarks, slogans and design protection in various configurations. Knowledgeable property in the metaverse can be a valuable asset to your business, so it’s important to protect it. Anyone copying or misusing your personal IP can be sued. There is also the opportunity to license intellectual property and earn revenue from it. Companies with strong intellectual property can earn substantial revenues from licenses and royalty while protecting their competitive benefit.
LEGAL ISSUES REGARDING THE METAVERSE
The determining owners of Intellectual Property protects content which was created in Metaverse, this presents an outstanding challenge. This has to consider the different specification of administration around the globe. License and some assignment agreement play an important part in management of Metaverse. Rights of user must be determined, as rights to exploit works in the Metaverse do not typically fall entirely within the realm of digital use covered by contract. It’s important for fashion designers and brands to know about the terms and their conditions of the agreements, especially the Metaverse intellectual property ownership and management provisions, before expanding their business.[11]
While the Metaverse offers new and exciting opportunities for fashion designers, fashion brands and independent artists, the question of how to protect intangibles in the Metaverse remains. Although all of this concept is based on decentralization, IP protection mechanisms rely on centralized method.[12] For example: Tribunals and Courts. It’s therefore needed to take this reason into account as well and review existing legislation accordingly.
NEED FOR PROTECTION OF IP IN METAVERSE
To protect IP in Metaverse, a strategy is needed. Multiple researchers and scholars who got engaged in this field have also absolute establishment. But because of the novelty in this field, still there aren’t any methods that can be assured for granting full protection to IP in Metaverse.[13]
The Metaverse is a swiftly growing virtual world that put forwards limitless opportunities for both businesses and individuals. As this new field frequently evolve, protecting intellectual property is critical to maximizing the potential return on investment. IP compromise can occur at any stage in the metaverse. For example, the sale of copyrighted NFT artwork in the metaverse could include both counterfeit and authentic artwork. As in the real world, trademark infringement can occur when buying or selling virtual goods. Needless to say, the really important trade secrets in the metaverse are very likely to be leaked. For these reasons, it is very compelling to consider intellectual property protection before entering the metaverse. Anyone copying or misusing your personal IP can be sued. There is also the opportunity to license intellectual property and earn revenue from it. Companies with strong intellectual property can earn substantial revenues from licenses and royalty while protecting their competitive benefit and Metaverse will bring technology to a new level.
Moreover, Metaverse is a universal platform with users from all over the world. This grants a unique opportunity to expand your business into new markets, provided you have adequate intellectual property protection. Without protection, we may be bare to lawsuits and other legal action from foreign competitors. Additionally, investors are increasingly looking at the IP portfolios and valuations of companies of all sizes when deciding whether to invest in a company. Who wouldn’t want to miss this? A strong IP portfolio can help you demonstrate your business’ potential value and increase your funding opportunities
If you consider a case of copyright infringement of a software which is used to create Metaverse and the content which is available on platform. To accomplish this, many investigations can be conducted virtually by using human resources, artificial intelligence (AI) systems, and auto-mated programs which are coded for identifying as well as for reporting different instances of compromise from the metaverse. Artificial Intelligence technology, has come a long way and now it is being used in everything, from network to cybersecurity and then to customers for services. Same kind of a technology can be used to attack single-instance IP compromise. You can configure AI algorithms to look for images, videos, and other assets which are unauthorized. Legal notices can then be sent to the respected parties requesting asset deactivation. [14]
The problem of trade secret infringement, such as with a patented technology and with a coded software, can be further resolved by entering into digital contracts with non-disclosure clauses and license restriction clauses supported by blockchain technology.
PROTECTION OF OWN IP INMETAVERSE
Some precautions have to be taken in the physical world when we are talking about intellectual property in metaverse. There are few advices on how to protect your intellectual property in the metaverse.
1. Register patents, trademarks and copyrights.
Firstly, the best way to protect inventive technology is to register trademark, patent and copyright with the appropriate authorities in the authority of interest. This gives you legal rights to your intellectual property, gives you an edge over your competitors, and prevents others from violating your rights. Patents can protect different methods, processes and unique systems. The protection of unique appealing creations and compositional designs is also being strengthened every day. Trademarks help protect company and brand names, logos, slogans, tag lines and even different sounds and gestures. Copyright, on the other hand, helps protect things like layouts, different user interfaces, and websites.
2. Run IP analysis.
Organizations should perform a thorough and detailed analysis of the virtual landscape from an intellectual property outlook to identify green spaces and activity areas. Such thorough analysis not only identifies patented domains and technologies, but also helps prevent breach of the intellectual property of others.
3. Take important security measures.
Always use strong passwords and proper measures for better security to protect your intellectual property from unauthorized access and theft. Impose privacy policies and non-disclosure agreements to ensure complete privacy and protection.
4. Monitor your IP portfolio.
Track all your intellectual property and where they are registered. This helps you tracking of assets more easily and ensure that all intellectual property is on track.
5. Train your employees:
Training and educating employees in such a way so that they know the significance of safeguarding intellectual property and ways to identify and report violations.
6. Seek for legal advice:
If you don’t know how to protect your intellectual property, or if someone infringes your rights, contact the responsible authorities for help.
LEADERS OF IP RACE IN METAVERSE
In spite of the fact that the term “metaverse” has been there since 1992, there has been a surge in patent filings related to this area in recent years. When it comes to the metaverse, there are several major players in the intellectual property world, including HTC, IBM Corp, and Microsoft Corp. Technically, these patents relate to the latest advances in virtual reality, increased reality technology, metaverse gestures, metaverse communications, and more.
CONCLUSION
With Facebook’s renaming to META, the adoption of the Metaverse has been faster and more widespread than any other technological development. This leaves metaverse content creators and intellectual property owners to prepare in advance for the many challenges that can arise when protecting their work. These challenges will have a major impact on the future of media companies and content production in general. But this is also an opportunity for intellectual property law to evolve with the introduction of new technologies.
By Vibhu Verma
BBA LLB | 4th Year
New Law College, BVDU, Pune.
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[9] IP and the metaverse: ownership and infringement of rights (2023). Available at: https://www.osborneclarke.com/insights/ip-and-metaverse-ownership-and-infringement-rights
[10] What does the Metaverse mean for intellectual property rights? (2023). Available at: https://www.techuk.org/resource/what-does-the-metaverse-mean-for-intellectual-property-rights.html
[11] Bailey, T. (2022) Legal Issues Facing the Metaverse – Lawrence Stephens, Lawrence Stephens. Available at: https://www.lawrencestephens.com/legal-issues-facing-the-metaverse/
[12] Estate, R. et al. (2022) Protecting intellectual property in Metaverse, Thehindubusinessline.com. Available at: https://www.thehindubusinessline.com/opinion/protecting-intellectual-property-in-metaverse/article65408301.ece#039;%20s%20Pick,%20Macro%20Economy,%20Agri%20Business,%20Budget%202023,%20and%20Computers%20Laptops%20et%20al.%202022.%20%22Protecting%20Intellectual%20Property%20in%20Metaverse%22.%20Thehindubusinessline.Com.
[13] IP Protection In The Metaverse – Trademark – India (2023). Available at: https://www.mondaq.com/india/trademark/1173882/ip-protection-in-the-metaverse
[14] Branding in the metaverse – protecting and enforcing IP rights (2022). Available at: https://www.lexology.com/commentary/intellectual-property/international/smart-biggar/branding-in-the-metaverse-protecting-and-enforcing-ip-rights