Looking ahead – intellectual property assets and the metaverse

The fast-paced progress of technology in our modern era brings up crucial concerns in intellectual property law that need urgent consideration. With the advent of the Metaverse, businesses are now exploring business opportunities in a virtual space that mimics our physical world.

In the Metaverse, the options are boundless – you can engage in activities such as purchasing virtual and real items from virtual malls, playing games, working, buying real estate, traveling, and even attending concerts, all within this expansive virtual environment.

While the Metaverse opens doors to captivating realms beyond the constraints of the physical world, it is essential to recognize that the Metaverse is a human-made construct existing within the bounds of legal reality. Even as users immerse themselves in alternate realities, legal considerations from the real world continue to play a significant role.

Therefore, the purpose of this article is to explore how intellectual property assets can be protected and rights enforced for products and services traded in the Metaverse within the frameworks of intellectual property law.

Understanding the metaverse and its features

As technology continues to advance at a rapid pace, terms like “metaverse,” “virtual reality,” and “augmented reality” are becoming increasingly prevalent. However, these concepts are often used interchangeably, leading to confusion.

The “metaverse” refers to a virtual environment facilitated by cutting-edge technology, transcending the physical world’s limitations. Within this realm, users can interact with one another as avatars, irrespective of geographical boundaries, while also engaging with software applications in a three-dimensional space.

The metaverse is not just one virtual world – it is a connected network of virtual worlds. Each world can be independently designed, offering users a variety of experiences. In this vast array of universes, users can create, share, and collaborate, making it a highly customizable and interactive environment where both the metaverse and avatars can be modified and enhanced.

Metaverse can be used for a variety of purposes, including social interaction, entertainment, education, and business, and has the potential to revolutionize many industries, including education, healthcare, retail, and more. For example, Metaverse can be used to create virtual reality environments for training or education purposes. It can also be used to create virtual storefronts for businesses or to create virtual spaces for social interaction.

The metaverse is carefully developed to provide experiences similar to those found in the real world, utilizing a set of technologies known as extended reality (XR). Notably, XR includes various essential technologies such as virtual reality (VR), augmented reality (AR), and mixed reality.

Virtual reality (VR) transforms the digital realm into a lifelike environment, providing users with immersive experiences. Using specialized devices like VR headsets and immersion helmets, virtual reality enhances visual, tactile, auditory, and kinesthetic sensations, fostering a deep interaction between users and the virtual world. In essence, virtual reality acts as a gateway to an artificial domain accessed through specific devices.

Augmented reality (AR) however takes a different approach, allowing the overlay of three-dimensional virtual elements onto the real-world environment. This fusion of the digital and physical worlds occurs effortlessly through AR devices like smartphones, smart glasses, and contact lenses. It is important to note that unlike virtual reality (VR), AR allows users to merge virtual objects with their immediate physical environment.

The main difference between AR, VR, and the Metaverse is that the Metaverse is a user-created online space, virtual reality is a simulated environment, and Augmented Reality overlays digital content in the real world.

Intellectual property in the metaverse

The Metaverse, a product of human ingenuity and innovation, has ushered in a new era. As its usage surges, safeguarding intellectual property rights within this digital domain becomes paramount. Within the Metaverse, intellectual property rights will play a pivotal role in preserving ownership and control over virtual assets, encompassing designs, characters, music, and more.

The absence of intellectual property rights protection will expose creators to the risk of unauthorized replication or theft, leading to financial setbacks and reputational harm. Thus, intellectual property protection in the Metaverse must be the cornerstone for fostering innovation, nurturing creativity, and encouraging investments in the digital realm, ultimately ensuring a just and inclusive virtual environment for all participants.

Within the vast expanse of the metaverse, every element of the said virtual universe possesses some form of intellectual property associated with it, including:

1. Copyright

Copyrightable works in the Metaverse include those that are original and fixed in a tangible medium of expression, such as text, images, audio, and video. Copyright laws safeguard original works, granting creators exclusive rights, including reproduction, distribution, performance, and display.

In general, copyright protection is attained automatically the moment the work is created. Since protection does not depend on registration – a creator does not need to register his/her work. However, in certain jurisdictions including Ghana, individuals may register their works for additional copyright protection, such as providing evidence of validity and putting the public on notice that such work is protected by copyright and that you are the copyright owner.

The Metaverse, though still in its early phases, is poised for rapid development. The integration of technologies like virtual reality (VR), augmented reality (AR), artificial intelligence (AI), non-fungible tokens (NFTs), cryptocurrencies, and blockchain may have copyright implications.

Further, given the potential for infringements in the metaverse, registering works for copyright protection is advisable as it simplifies proving ownership, originality, and other crucial aspects in case of infringement.

2. Trademarks

In the Metaverse, trademarks will continue to function as crucial brand identifiers, extending their role from the physical to the virtual space. This evolution will offer companies with trademarks the opportunity to enhance their brand visibility in the digital space. As a result, brands must actively pursue trademark protection for their virtual assets including submitting applications to officially register their marks in the metaverse.

Many prominent footwear brands, such as Nike and Converse, have recently applied for trademarks with the United States Patent and Trademark Office. It is noteworthy that companies in the fashion, cosmetics, sports, and entertainment sectors are following suit by filing applications for their trademarks in connection with virtual products. While these applications are still awaiting examination, they provide insights into potential strategies for securing trademark registrations for virtual goods.

3. Image Rights

The term ‘image rights’ is used to refer to an individual’s proprietary rights in their personality and the ability to exploit, and prevent unauthorized third parties from making use of, an individual’s persona, including their name, nickname, image, likeness, signature, and other indicia that are inextricably connected with that individual.

Modern technology enables users to create lifelike avatars with precise details mirroring real-world physical characteristics. Beyond facial features, hairstyles, colors, eye shapes, and accessories, future advancements may bring variations in voice tone, mannerisms, and behavior, enhancing the realism of these digital representations.

Accordingly, the use of an individual’s image in the process of developing and exploiting avatars in the Metaverse is a sensitive issue that requires proper attention.

Interacting through avatars in virtual worlds is not a new concept, but recent technological advancements have led to the creation of remarkably realistic avatars. This advancement raises challenges in safeguarding image rights, especially when these avatars depict individuals other than their creators. Within the expansive virtual landscape, there is a growing concern about potential infringements on image rights and the ensuing legal ramifications.

A significant concern arises when users generate avatars resembling third parties, as this opens the door to activities that could tarnish the honor and reputation of the individuals portrayed. The repercussions of such harm may transcend the virtual space, impacting the real world in tangible ways.

Also, when users interact via avatars, they may commit acts that would violate the law had they occurred in the real world.

Finally, another possible discussion relates to the right of individuals to economically exploit their image – also known as the right of publicity – which is consolidated in common law jurisdictions including Ghana under the Copyright Act, 2005 (Act 690).

Anticipated challenges for the enforcement of intellectual property rights in the metaverse

Identifying copyright ownership, evaluating the extent of infringement, and identifying infringers present significant hurdles in the metaverse, largely due to the anonymous nature of user identities and transactions.

This anonymity, intended to address privacy concerns, complicates efforts to hold individuals accountable for trademark or copyright violations, as right holders struggle to uncover the identities of infringers. People are present in the form of avatars and blockchain technology protects the identity of these people. Therefore, the presence of Artificial Intelligence (AI) will be needed for the identification of these people.

Further, the virtual landscape of the metaverse has sparked debates among legal experts regarding jurisdiction and the applicability of domestic laws. Moreover, the legal status of the Metaverse itself is still a grey area, making it likely that infringers will exploit loopholes to gain illicit benefits by violating someone else’s IP.

Further, within the Metaverse, intellectual property rights laws need to address various factors such as user-generated content, the creation and sharing of virtual assets, utilization of representations from the physical or virtual world, and more.

This challenge is exacerbated by the existence of interconnected or segregated parallel virtual worlds. Enforcing copyright becomes a daunting task for holders, as proper identification and monitoring of infringing content may be hindered, leading to a potential breeding ground for copyright infringement within the Metaverse.

Finally, the biggest obstacle would be the enforceability of the infringement laws due to the cross-border nature of the Metaverse, which includes people from various countries.

Copyright owners pursuing infringement lawsuits in their jurisdictions may face limitations in geographic scope, potentially undermining the effectiveness of their legal actions. It would become difficult to understand the applicability of law, the appropriate authorities, and their jurisdiction.

And even if the infringers are eventually identified, it can be a complex and costly venture to prosecute all those involved in the infringement.

Recommended protection and enforcement strategies

Protecting and enforcing copyright and trademarks in the metaverse must follow procedures similar to those in the physical world. Metaverse platforms, governed by intellectual property terms and conditions, explicitly must forbid content that violates trademarks and copyrights, image rights, and other IP rights, requiring them to be removed upon request.

For instance, visible copyright notices on virtual content will act as an initial warning to potential infringers in the Metaverse, explicitly stating that unauthorized use is prohibited. Platform operators must also reinforce this by establishing comprehensive Terms of Service (ToS) outlining acceptable copyright usage. These terms must specify penalties for infringement, creating a contractual obligation for users to adhere to copyright rules.

Using Digital Rights Management (DRM) technologies to safeguard copyrighted content in the Metaverse is another effective strategy. Using DRM technologies in the Metaverse, such as encryption and watermarks, effectively prevents unauthorized copying, modification, and distribution of virtual content. Platforms can also enhance protection through content moderation measures like automated algorithms or human moderators to swiftly identify and remove infringing content. These proactive approaches will ensure early detection and mitigation of copyright infringement in virtual environments.

In the Metaverse, it will be crucial to secure proper licenses and permissions for using copyrighted content. Content creators may therefore provide licenses for their works, enabling users to use copyrighted material in their virtual creations by obtaining the necessary permissions, ensuring adherence to copyright laws.

Dispute resolution (litigation) remains another viable avenue for enforcing copyright and trademark rights. When individuals discover their intellectual property rights have been violated, they may initiate legal proceedings to seek appropriate remedies. Domestic laws must provide remedies for infringement, empowering affected parties to take legal action and seek redress from the courts.

Finally, promoting awareness and educating users, content creators, and platform operators in the Metaverse regarding copyright laws and best practices will contribute to fostering a culture of compliance and respect for intellectual property rights.

Conclusion

As the Metaverse evolves, predicting its growth and potential legal challenges remains a seemingly daunting task. Lawmakers need to ensure the conformity of its development with legislation and policy guidelines for seamless integration into human reality. Despite being in the development stage, substantial investments from various companies indicate its imminent significance to modern society, just like the internet.

The Metaverse presents both opportunities and challenges for intellectual property (IP) rights. While current copyright laws address expected issues, the global accessibility of the Metaverse raises concerns about the universal applicability of laws and the need for appropriate regulatory bodies in case of disputes or IP rights infringements.

>>>is an Associate at Sustineri Attorneys PRUC with its Corporate, Governance, and Transactions Practice Group, specializing in legal service provision for Startups/SMEs, Fintechs, and Innovations. He welcomes views on this article via [email protected]

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