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Commercial Question

The metaverse and trademarks

updated on 22 March 2022


How can brands exploit their trademarks in the metaverse?


What is the metaverse?

The metaverse is the world on a digital landscape that combines virtual reality with augmented reality. In a nutshell, it's the real-world version of The Sims game. This time the Sims are human avatars and the shops, galleries, and restaurants are connected to the real world. Imagine sitting at home with your virtual headgear on attending a Beyoncé concert in a virtual park, working in a virtual office or socialising with friends in a virtual café.

The use of intellectual property in the metaverse

The recognition of the metaverse as another way for brands to exploit their intellectual property rights (IPRs) is becoming more apparent. In November 2021, Nike launched onto Roblox, an online gaming platform, with Nikeland. In Nikeland each avatar can customise their outfit with Nike branded clothes and apparel while playing a myriad of interactive games. This year, Nike has taken a step further and has announced that this virtual experience will be available to in-store customers at their flagship store on Fifth Avenue in New York. In May 2021, Gucci also collaborated with Robolox where they sold rare Gucci items within a virtual garden exhibition. Robolox users had two weeks to buy virtual Gucci goods as well as view previous Gucci Campaigns.

Outside of the fashion world, McDonalds has announced that they will be opening virtual restaurants. These restaurants will give metaverse users the opportunity to order food and drink to their homes. It's like Deliveroo but you are ordering through your own avatar in the metaverse.

What are the issues for brands with trademarks?

As with every new technology or invention in the digital space, there is a risk for brands against cybercriminals who want to exploit that brands' goodwill. In the non-fungible token (NFT) marketplace, fashion brands are already facing issues with users selling unauthorised products for sale.

Most recently, Hermès has filed a trademark lawsuit against Metabirkins which has been selling for several thousands of pounds. Mason Rothschild, the creator of Metabirkins, has claimed that his Metabirkins are a re-interpretation of "the form, materiality and name of a known cultural touchpoint". However, Hermès has argued that the sale of the Metabirkins infringes its trademark and dilutes its brand. This legal action raises the question as to how will brands be able to protect their trademark in the metaverse against those that try to ride on the back of their reputation.

What is the future of the trademarks in the metaverse?

Brands are already taking steps to protect themselves. In the US, brands such as Nike and McDonalds have registered trademarks in the virtual classifications in the US Patent and Trademark Office such as "downloadable virtual goods" and "virtual food and beverage products".

On the whole, however, it is unclear whether the trademark classifications for real-world products will apply in the virtual world should a dispute arise. Therefore, it is important that brands monitor the metaverse for infringing products as all brands, whether they are engaged in the metaverse or not, will be affected.

Nikhita Chauhan is a current trainee in DWF Group Plc’s real estate team based in Manchester.