Navigating trade mark protection in the Metaverse

The metaverse is the latest hot topic of conversation in the business world. Catapulted to the front of the tech industry’s thinking in the past few years by the cryptocurrency and NFT boom and more recently gaining widespread attention following Facebook’s rebrand to Meta, many predict that it will be bigger than the internet is today. With the impact of COVID-19 pushing more people online and virtual interactions increasing, from video conferencing to immersive digital experiences created by museums and art galleries, the metaverse appears to be more than just the latest fad.

But what exactly is it? Coined by writer, Neal Stephenson, in his 1992 novel “Snow Crash” as “an all-encompassing digital world that exists parallel to the real world”, there is no single agreed definition of the metaverse. It generally refers to an immersive virtual space, where people can interact with virtual objects in real life. For tech companies, the potential exists for a new digital economy, where users can create, buy and sell goods.

Aside from its obvious benefits to the gaming industry, there is huge potential in all sectors – Ikea’s ‘Place’ app allows customers to view furniture in their own houses or offices, Nike recently partnered with Roblox to launch its Nikeland metaverse and Johnson & Johnson has opened its first training room for doctors, offering learning simulators for surgical procedures.

Various virtual world platforms exist within the metaverse, of which Roblox, Decentraland and The Sandbox are most popular. The opportunities for brand owners to reach a wider audience and increase brand engagement for consumers are vast; last year, Roblox collaborated with Gucci to create a two week art installation, where users could view digital Gucci clothes, and earlier this year, HSBC invested in a plot of land in The Sandbox, in order to engage with global financial services and sports communities. But entering the metaverse is not risk-free. Unauthorised third party use of confusingly similar trade marks risks consumer confusion and trade mark owners will need to think about new monitoring strategies, so that prompt action can be taken to prevent dilution of a brand when infringements are detected.

With more and more companies entering the metaverse, trade mark offices have seen a surge in trade mark applications covering virtual classes of goods and services and predictably, bad faith applications are flourishing. In November last year, two trade mark applications were filed by unconnected third parties in respect of the Gucci and Prada logos covering a range of metaverse-related goods and services. Both companies are challenging the applications based on unregistered rights but whilst Gucci and Prada might well be able to argue that unauthorised use in the metaverse tarnishes their unique brands and reputation, other less well-known brands will have a harder time. As is nearly always the case, registered trade marks are easier to enforce than unregistered rights.

In conclusion, the emergence of the metaverse and increase in intellectual property filings indicates that conducting business in the virtual world is an increasingly high priority for brands and necessary in order to stay relevant and competitive. Until we know the extent to which real world goods and services offer protection against those same goods and services in the virtual world, businesses intending to actively target the metaverse would be wise to consider submitting applications for key brands in relation to virtual goods and services. In any event, all rights holders will need to consider how to monitor this emerging, unregulated space for unauthorised use and subscription to a trade mark watch service will likely be key.