Top Rated Web Hosting Providers

Intellectual property rights in metaverse Goods and services

Many brands have taken steps to proactively protect their intellectual property rights for use in connection with metaverse-related goods and services. This may include filing for new trademark registrations or purchasing blockchain domains. But enforcing those rights poses a significant challenge. In this alert, we discuss ways to identify and combat copyright and trademark infringement in the metaverse.

What is The Metaverse?

The metaverse is a persistent digital environment that will allow people to seamlessly transition between their physical and virtual worlds. While much of it remains aspirational, some key trends are already emerging:

  • It will feature immersive virtual worlds built on blockchain technology that will host vibrant digital economies;

  • Governance will be decentralized and autonomous;

  • It will be based on next generation consumer electronics with augmented and mixed reality capabilities that will serve as a gateway or bridge between physical and virtual experiences;

  • It will have advanced avatars; Y

  • Its full potential is likely to require interoperability between virtual environments.

Challenges to IP Enforcement

The decentralized nature of the metaverse poses perhaps the biggest challenge for brands and IP owners. To understand why it is useful to consider the legal framework and protocols that have emerged to prevent and remedy breaches on the “traditional” Internet. Today, most websites are hosted on servers maintained by specialized web service providers. Under the Digital Millennium Copyright Act and Section 230 of the Communications Decency Act, these hosting providers are generally not responsible for infringing content on their servers, provided they act promptly to remove it upon notice. adequate. Therefore, when a brand discovers infringing content on a site, they can contact the hosting provider, demand that the content be disabled or removed, and the hosting provider can simply remove the infringing content.

Similarly, social networks have developed robust policies and processes to monitor intellectual property infringement. Assuming a brand can convince a network to take action, it’s relatively easy for the network to suspend or disable infringing content.

By contrast, blockchain-based platforms, or “Web3,” do not reside on a single server. Rather, content is distributed and replicated across an essentially infinite number of servers over a peer-to-peer network. As such, there is no single point of authority, such as a hosting provider or ICANN, that can “turn off” infringing content. Also, once content is on the blockchain, it cannot be deleted; it is there forever.

So what is a brand to do?

  1. Be present: Unfortunately, there is no easy way to monitor virtual worlds, such as Decentraland and The Sandbox, for infringing content. Trademark search and monitoring services generally do not have the ability to view or scrape content on Web3 platforms, and major search engines are unlikely to capture blockchain code in their common law web searches. Until specialized tools are developed, one of the best ways to monitor the metaverse for breaches is to be there: establish a routine presence on popular metaverse worlds like Decentraland or The Sandbox; monitor the main discussion forums; and monitor transactions on major public blockchains.

  2. Go to the secondary market: While Web3 platforms are decentralized and autonomous, many metaverse service providers are traditional entities. NFT marketplaces like OpenSea, for example, have control over the content that appears on their marketplaces for resale and have adopted policies and procedures to remove infringing content. While removing infringing content from secondary markets can help remove or reduce the incentive for violators to traffic infringing content, it is important to note that these markets have no control over the underlying assets. Therefore, even if it is removed from a marketplace, the offending content will remain on the blockchain.

  3. Play nice: One of the few surefire ways to control infringing content is to purchase it. Most things on Web3 are available for purchase at the right price, but such a strategy can quickly become costly and incentivize more violations.

  4. Be Proactive – As noted above, many brands have already taken steps to file metaverse-related trademark applications and purchase blockchain domains. While not a panacea, these are important steps for brands to take.

© 2022 ArentFox Schiff LLPNational Law Review, Volume XII, Number 112