What does the Metaverse mean for intellectual property rights?
This insight was initially posted on OUT-LAW by Pinsent Masons. You can read the original full article here
The metaverse can deliver interactive and immersive experiences to users and will change how people socialise, shop and work. It will complement an already booming gaming market globally and allow brands to reach huge audiences with minimal environmental impact.
This seismic change will generate new creative works to be protected and a new environment in which to enforce IP rights.
Patents
When creating innovative technologies, businesses should consider whether to seek patent protection. Patents can protect novel software that solves a technical problem.
The challenge for businesses is that many courts have been quick to invalidate software patents, holding the software as an implementation of an abstract idea, and incapable of patent protection.
Policing patent infringement in the metaverse also has practical difficulties. Unlike other IP rights, software patents work behind the scenes. Establishing infringement hinges upon a source code comparison, likely requiring legal proceedings to be lodged to obtain disclosure and facilitate expert review. This is expensive and time consuming and runs the risk of the infringer rewriting the source code to avoid liability.
Trade secrets
In light of the challenges regarding registration and enforcement of software patents, businesses may be better leveraging their trade secrets to protect their metaverse technology.
Trade secrets protect commercially valuable confidential information, gives the owner a competitive advantage and is treated as a secret. Trade secrets can last indefinitely if kept out of the public domain. However, the speed with which technology changes can quickly render the trade secrets irrelevant.
The success of the metaverse hinges upon its understanding of both the physical world and its user. The metaverse can apply real world features to a virtual environment, and data will play a significant part in this. Additionally, AR/VR technology will generate data of unparalleled granularity, not just measuring where you click but how you move. Though trade secret protection is relatively narrow, if the requirements are met, trade secrets may assist in protecting this data.
Copyright
In the UK, copyright is an unregistered right protecting literary, dramatic, musical and artistic works which are original, are fixed in some way and qualify for protection. Consequently, copyright is a flexible right that can be practically difficult to enforce.
Unlike the UK, some relevant jurisdictions, like the US, brand owners may wish to ensure relevant copyright is registered in metaverse assets and software.
If a business finds its copyright material is being used in the metaverse without consent it should notify the platform immediately. However, depending upon the location of a host server, takedown and website blocking procedures will be based on local laws.
When assessing copyright infringement, a court will determine whether a substantial part of a copyright work has been copied. It is uncertain how courts will interpret the ‘fair dealing’ defences to copyright infringement in a metaverse context.
Fundamentally, copyright protection is dependent upon whether a work is made by a qualifying person or whether it is published in a qualifying country. This begs the question as to how the courts will interpret the validity of copyright works beyond the universe which, by definition, has no boundaries.
Trade marks
Registered trade marks provide the owner with the exclusive right to prevent others from using the mark for the goods and services covered by the registration. They are valuable assets, can last indefinitely and avoid the need for trade mark owners to prove the elements of a passing off action.
A number of brands are filing trade mark registrations to ready themselves for launch in the metaverse. For example, McDonald’s has filed trade marks for virtual restaurants offering home delivery and Walmart applied for trade marks for financial services “for use by members on an online community via a global computer network”.
In the absence of a body of decisions, it is difficult to know the value of metaverse registrations and it is unclear how valuable existing marks covering digital goods and services will be in protecting brands in the metaverse. However, it is fair to assume that expanding registered trade mark protection to cover digital assets will prove beneficial for enforcement.
Design rights
Registered design rights are not limited to specific goods and services. This flexibility is likely to be useful in the metaverse. For example, where a brand has a design registration for a popular handbag, if this is adopted by a digital avatar, then the registration could be enforced against a copycat digital embodiment.
The UK Intellectual Property Office (UKIPO) is in the process of considering how the UK design rights framework might be amended to future-proof it against new and emerging technologies. In January 2022 it canvassed views on the use of designs in a digital environment, “including avatar content in online gaming”, looking to ensure a balance between human created and computer generated designs. Whilst the consultation does not reference the metaverse specifically, clearly improved protection for digital assets such as avatars would impact upon the availability of design rights to better protect brands in the metaverse.
Licensing and advertising
Where licensing IP rights, businesses should review any existing licences to assess whether these cover the use of that IP in the metaverse, and whether any first rights of refusal are offered which may result in infringement if IP rights are offered to a third party. Any future licences should be crafted to deal with the metaverse and any use in digital assets such as NFTs.
The metaverse is likely to be a strong marketing tool, but so far the UK’s advertising watchdog, the Advertising Standards Authority (ASA), has yet to issue guidance to help businesses comply with advertising rules. As brands look to promote themselves in the metaverse they will need to navigate the advertising codes and ASA rulings.
Laura Foster
Laura is techUK’s Head of Programme for Technology and Innovation.
Rory Daniels
Rory joined techUK in June 2023 after three years in the Civil Service on its Fast Stream leadership development programme.
Elis Thomas
Elis joined techUK in December 2023 as a Programme Manager for Tech and Innovation, focusing on AI, Semiconductors and Digital ID.
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