To the metaverse and beyond – the importance of brand protection in the virtual world

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The past year has seen a dramatic increase in the number of trademark applications for virtual goods and services, fueled by the development of the metaverse and other complex online environments. Brand owners should now consider the merits of protecting their key brands in the virtual world.

Although not here yet, the metaverse – one or more proposed 3D online virtual worlds – is expected to reach a population of one billion people by the end of the 2020s. It is likely to bring markets virtual online 3D, with customizable avatars consuming nearly every good and service we make in the “real world” – virtual handbags, shoes, home decor, education, meeting spaces, social events – and more. It is likely to provide a host of new opportunities for brand owners to monetize and promote their brands. “Proto-metaverses” are already operational, with some video games offering a mix of “real-world” gameplay and interactions.

Brand owners should now consider the merits of protecting their key brands in the virtual world. Although trademark registrations for “real world” goods and services may offer some protection against the use of the same or similar marks in the virtual world, the position (and the law) is not straightforward. For example, can there be trademark infringement if there is no real “product”? In addition, obtaining registered protection for virtual goods or services should allow the registrant to launch a so-called double-identity attack (use of an identical mark on identical goods or services), strengthening its position.

Obtaining registered protection for virtual goods and services should not only aid future enforcement, but also help ward off third-party applications and use and facilitate future licensing opportunities. (Non-rights-holding third parties are already filing and using existing marks in the virtual space.) The key class to cover will generally be 9, but classes 35, 41, 42 and others could also be important (although the problems of use should be taken into account). It will also be necessary to think carefully about the jurisdictions in which to file (given the potentially borderless nature of the Internet).

In the future, rightsholders will also have to think about how to control a more complex online environment, where not only will it be more difficult to detect infringements, but where there will be public relations and reputational problems to take into account.

To discuss this topic in more detail, please contact our Brands and Advertising team. For more on the Metaverse, check out our recent article on the legal challenges and opportunities it presents or dive into our vision for the video game industry in 2022.

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