As the digital landscape evolves, so too does the world of IP. One of the most significant and emerging areas of interest is trade mark protection in the metaverse. Businesses and brand owners are increasingly looking to protect their trade marks and IP within these new digital spaces.
Building on our previous discussion highlighting the crucial need for metaverse trademark protection, this second blog in our series explores the numerous issues associated with trade mark protection in the metaverse that legal systems and businesses need to consider.
Jurisdictional Issues
One of the first challenges in protecting trade marks in the metaverse is the question of jurisdiction. The metaverse, by its very nature, is global, with users and digital platforms spread across multiple countries and legal systems. Whilst Section 4 of the Digital Markets, Competition and Consumers Act 2024 provides some guidance as to circumstances in which “digital activity” can be linked to the UK, traditional trade mark law is largely jurisdictional, meaning that protection is typically limited to specific geographic territories. In the metaverse, where digital assets can be accessed from anywhere in the world, it becomes unclear which country's laws apply when a trade mark is infringed.
For instance, if a brand owner’s trade mark is misused in the virtual world of a specific platform, should it be protected under the laws of the user's country of origin, the country where the platform is based, or under international agreements? The current lack of clear guidelines for enforcement in cross-border scenarios leaves brand owners with a legal grey area, making trade mark protection more difficult to navigate and thus perhaps warranting a comprehensive and cautious approach.
Virtual Products and NFTs
The rise of virtual products and NFTs in the metaverse introduces a new layer of complexity. Virtual products, such as clothing, accessories, and even real estate, often mirror physical-world products, but they're intangible and exist purely in digital form. As brand owners venture into the metaverse, they may create or sell virtual versions of their products. But what happens if someone else creates counterfeit digital versions of these items and markets them as the brand owner’s products?
Moreover, NFTs are increasingly being used to represent ownership of virtual products in the metaverse. Since NFTs are often tied to specific digital items like artwork or virtual real estate, the question arises: how do we protect against the unauthorised minting and sale of NFTs that infringe upon a trade mark?
User-Generated Content and Infringement
The metaverse thrives on user-generated content, and this presents another challenge for trade mark owners. Users can create their own avatars, buildings, virtual spaces, and even products, often incorporating logos, designs, or other protected elements without the brand owner's consent. While platforms might have mechanisms in place to flag and remove infringing material, the sheer volume of user-generated content in the metaverse makes it incredibly difficult to monitor and enforce trade mark rights consistently.
A further complication is the possibility of users intentionally creating virtual products or spaces that resemble existing trade marks. This can lead to confusion about the origin of certain digital products, which undermines the distinctiveness of a brand owner's trade mark.
Platform Liability
Another challenge lies in determining platform liability. In the physical world, if a company sells counterfeit products bearing a trade mark, it is often held accountable for those infringements. In the metaverse, however, platforms that host virtual spaces and transactions may not be as easily liable for trade mark violations. Many platforms are structured in a way that places responsibility for content creation and transactions on the individual users, rather than on the platform itself. This means that if an infringement occurs, it may be unclear who is ultimately responsible for rectifying the situation.
Metaverse platforms may be able to utilise the “hosting defence” that is available to Internet Service Providers (ISPs) under The Electronic Commerce (EC Directive) Regulations 2002, which states that the ISP will not be liable if they did not have actual knowledge of the unlawful activity, they acted expeditiously upon obtaining such knowledge and the recipient of the service was not acting under the authority or control of the ISP.
Even if a platform enforces its own trade mark policy, inconsistent enforcement across different platforms could lead to uneven levels of protection. It becomes essential for trade mark owners to understand the specific rules and regulations of each platform within the metaverse in order to best protect their IP.
Evolving Legal Frameworks
Lastly, one of the most notable challenges is the current lack of a clear and established legal framework for trade mark protection in the metaverse. Traditional IP laws were not designed to address the unique issues that arise in a virtual environment. The legal system is still playing catch-up as it seeks to develop rules that apply specifically to virtual spaces, digital assets, and the ever-evolving nature of the metaverse.
As highlighted in the third and final blog in this series, the body of case law surrounding the subject of the metaverse is increasing. However, there is still much ambiguity in how those trade marks will be enforced, especially when virtual environments are rapidly changing and often exist in decentralised ecosystems.
Conclusion
Trade mark protection in the metaverse is a complex and evolving issue. As the virtual world continues to expand and businesses increasingly establish a digital presence, the need for clear and comprehensive guidelines on IP protection becomes more critical. Businesses must remain proactive by staying informed about developments in the space, utilising new technologies to monitor their trade marks, and working with legal experts who specialise in the intersection of virtual environments and IP.
In the future, it is likely that new regulations, international agreements, and innovations in digital rights management will provide clearer paths for protecting trade marks in the metaverse. Until then, brand owners must be prepared to navigate the challenges of this new digital frontier, while keeping a close eye on legal and technological developments that may shape the future of trade mark law in virtual spaces.
Please get in touch with our Trade Mark team if you would like our assistance with protecting, enforcing or commercialising your trade mark for the metaverse.
