‘Welcome to the virtual reality.’ That exactly is what Metaverse is.

The mind boggling core of technology is gradually coming into existence wherein a virtual parallel has been created for humans to interact with each other through augmented reality. In fact, world famous brands are slowly marking their presence in the Metaverse through gaming, shopping, virtual concerts and virtual fashion shows. 

Renowed rapper Travis Scott was the first person to have his virtual concert and Snopp Dog recently released his music video which was completely shot in the Metaverse. 

With human/ entities establishing their presence in the Metaverse, the first and foremost concern in this new world – issues of privacy and data being misused along with antitrust and anti-competition issues. 

While such issues might be difficult to identify, the most flashing issues are related to right of publicity, right to privacy and defamation. The increasing presence are not limited to humans but also extends to many brands and businesses as they see a huge potential in the new reality for building their brand identity. For instance, Microsoft and Roblox are capturing real estate in this metaverse universe and the first Metaverse fashion week took place in March, 2022 at Decentraland, a decentralized virtual social platform.

Brands and Trademarks in the Metaverse

Metaverse is tomorrow’s marketplace wherein various products can be sold, showcased, advertised virtually and it can only be assumed that virtual demo of products would take place. This virtual space is able to provide massive reach for the brands in a cost effective manner and is made available across the globe. However, on the other side of the coin, it can be foreseen that the easy access might lead to easier unauthorized use of brand names and their trademarks. 

The sale of goods or any experience in the Metaverse is the allure of being an NFT (Non Fungible Token) which can be purchased through digital currencies. Sales that solely rely on the reputation of the brand can be tapped by unauthorized users in the Metaverse, for instance, the case of MetaBirkin Bags. In this dispute between Hermes, owner of trademark of the word Birkin and the structure of the Birkin bags and Mason Rothschild, the facts boils down to whether Mason Rothschild can sell fuzzy Birkin bags as NFTs and whether his works are artisticall relevant and are protected under First Amendment defence in the US. The analysis of these stipulating legal questions are yet to be decided by the Courts, however it is not until very recently that the U.S Courts are discussing about the artistic relevance and how different NFT is from the actual product.

As businesses are trying to capture the marketplace in the Metaverse, it is pertinent to register the intellectual property rights exclusively for this augmented reality without which either false advertising or free riding on the goodwill might entail decreasing the reputation of the brand. It is the Hermes, who is claiming for trademark infringement, dilution and trademark theft for the NFTs that looks like Birkin bags with fuzz over it. Additionally, the Hermes are claiming that Mason Rothschild has mala fide intention to free ride on the brand name Birkin by creating a website ‘metabirkin.com’.

Generally, brands willing to establish their presence in the Metaverse will have to register their trademarks in Class 9 for virtual goods, Class 35 for retail store of virtual goods, Class 36 for financial services which includes digital tokens and Class 42 for online non- downloadable virtual goods. It is further pertinent to note that the word ‘virtual goods’  or ‘digital collectibles’ are no where defined in Indian law, but their presence can be witnessd in the FDI Rules, E-Commerce Rules and even the Financial Act, 2022. 

It can be concluded that the Metaverse is booming and the laws of the real land are also synchronizing with the virtual world to make this social experience and boundless opportunity as a feasible and brand-friendly marketplace. “It is urged that the brands must be prepared to construct their virtual marketplace with appropriate trademark registrations, a robust policing strategy and appropriate licenses and terms of use.”