Protecting Your Brand in the Metaverse

With all the talk about NFTs selling for millions, you may be thinking about expanding your business into the Metaverse. Even if Metaverse expansion isn't on your mind, you should at least be thinking about protecting your brand in the Metaverse.

What is the Metaverse?

The Metaverse is a persistent virtual world, a “place” parallel to the physical world, which incorporates augmented reality, virtual reality, 3D holographic avatars, video, and other means of communication, where people can "live" and interact in real-time with others within a digital universe. In the Metaverse, individuals can gather online for work, play, and stay connected with friends, family, and colleagues through everything from concerts and conferences to virtual trips around the world.

Intellectual Property: Metaverse Risk and Opportunity

Risk

The Metaverse presents both risk and opportunity for your intellectual property. Even there's no plan to expand your business to the Metaverse (at least not yet), you should be aware of the intellectual property risk that exists in the Metaverse.

The risk is the misuse of your intellectual property in the Metaverse. The use of your trademark(s) without consent. The use of your content (copyright) without your consent. Companies like Hermès are learning this lesson the hard way.

Hermès filed a lawsuit against Mason Rothschild, the creator, and seller of a collection of digital Non-Fungible Tokens (NFTs) that resemble Birkin bags called MetaBirkin. The collection includes 100 NFT MetaBirkins and has already accumulated nearly $450,000 in sales. Hermès is suing Rothschild for trademark infringement, trademark dilution, and cybersquatting. Hermes based its allegations of trademark infringement and dilution on Rothschild’s use of MetaBirkin as a trademark to promote his NFTs and at his metabirkin.com website.

Opportunity

The Metaverse presents endless opportunities to monetize your intellectual property. From minting NFTs to the ability to place orders in the Metaverse for real-world delivery. NFTs can be used to monetize your copyright and virtual stores can be used to monetize your trademark(s).

Take Mcdonald's for example. McDonald's has filed 10 trademark applications for protecting its brand in the Metaverse. One of the McDonald’s filings, includes a request to trademark, among other things, “Operating a virtual restaurant featuring actual and virtual goods,” and “operating a virtual restaurant online featuring home delivery.”

How to Protect Your Brand in the Metaverse

Basic brand protection principles remain the same for the Metaverse. Register your trademark(s) to protect your business identity and register your copyright(s) to protect your creative works.

Trademark Registration

If you've already registered your trademark(s), then it's time to expand your registration to the Metaverse by filing in additional classes (see below) even if you have no interest in entering the Metaverse.

Generally, trademarks only apply to the goods or services listed on the registrations and those that are reasonably related to the listed goods or services. Your current trademark registration(s) may be insufficient to protect your interest in the Metaverse.

In the Hermès lawsuit referenced above, Hermès may have a difficult time establishing its trademark infringement claim. Hermès’ trademarks are for leather goods, specifically handbags. The NFTs being sold are decidedly not leather goods. Hermès will need to prove its trademark for leather goods extends to expressive images based on the leather goods, which is what the MetaBirkin trademark is selling to consumers.