The Legal Challenges of the Metaverse: Business Trademarks

Mónica Lastiri Santiago – Charles III University of Madrid, Spain

Abstract

The Metaverse is emerging as a hotbed for brand promotion as well as a platform for creating and using intellectual property rights includ­ing trademarks. The avatars (users) can create digital objects to sell to other users. Lenders and investors are seeking opportunities to capitalize on new Metaverse markets and digital assets as is the named NFT (not-fungible to­ken) that is the unique data coding that can be visually represented by a dig­ital asset, for example, a virtual handbag.

Currently one of the real-world lawsuits involving trademarks and NFTs is the dispute between fashion house Hèrmes vs NFT creator Mason Rothschild. Hermès makes the exclusive line of Birkin handbags and Rothschild started selling NFTs in the form of digital images he named MetaBirkins which are the virtual reproduction of the Hèrmes product. Therefore, the fashion house filed a trademark claim for unauthorized use of their trademark and design.

From the above-mentioned lawsuit raises a set of fascinating issues at the intersec­tion of intellectual property law and digital technology. For instance, the unautho­rized trademark use in Metaverse, but what, in our view, is the most important chal­lenge is: Can you have a trademark right on an NFT? Trademark owners should be aware of the opportunities and challenges to their brand in virtual worlds.

The possibilities for a Metaverse are currently limitless and the investments being made in new Metaverse-related technologies and platforms have grown enormously. Investors and companies are spending purchasing dig­ital land in popular Metaverses to create virtual business spaces where con­sumers are sold goods, services, or entertainment.

LIMEN Conference

8th International Scientific-Business Conference – LIMEN 2022 – Leadership, Innovation, Management and Economics: Integrated Politics of Research – CONFERENCE PROCEEDINGS, Hybrid (EXE Budapest Center, Budapest, Hungary), December 1, 2022,

LIMEN Conference proceedings published by the Association of Economists and Managers of the Balkans, Belgrade, Serbia

LIMEN Conference 2022 Conference proceedings: ISBN 978-86-80194-66-0, ISSN 2683-6149, DOI:  https://doi.org/10.31410/LIMEN.2022

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission. 

Suggested citation

Lastiri Santiago, M. (2022). The Legal Challenges of the Metaverse: Business Trademarks. In V. Bevanda (Ed.), International Scientific-Business Conference – LIMEN 2022: Vol 8. Conference proceedings (pp. 357-370). Association of Economists and Managers of the Balkans.  https://doi.org/10.31410/LIMEN.2022.357

References

Block, F. (2021). “PAK’s NFT Artwork ‘The Merge’ Sells for $91.8 Million”, PENTA,. https://www.barrons.com/articles/paks-nft-artwork-the-merge-sells-for-91-8-million-01638918205  

Caleb & Brown. (2021). The Cyber ‘Big Bang’ What is the Metaverse?, https://www.caleband­brown.com/blog/the-cyber-big-bang-what-is-the-metaverse 

Canavesi, B. (2022a). The Foundation of the Metaverse. Centralization versus Decentralization. Allen interactions. https://blog.alleninteractions.com/the-foundation-of-the-metaverse-centralization-versus-decentralization 

Canavesi, B. (2022b). NFTs: Providing Utility Beyond Digital Collectibles, alleninterations, https://blog.alleninteractions.com/nfts-providing-utility-beyond-digital-collectibles 

Chakrabarti, P., Tivette, S., & Rahman, R. (2022). In the bag (for now): Hermès survives mo­tion to dismiss in MetaBirking NFT lawsuit, Crowell, https://www.retailconsumerprod­uctslaw.com/2022/05/in-the-bag-for-now-hermes-survives-motion-to-dismiss-in-metabir­kin-nft-lawsuit/#_ftn3 

Chambers, L., Longster, J., Reavill, D., & Reddish, H. (2022a). “Protecting Brands in the Metaverse: Issues for Companies to Consider” Part I TFL, https://www.thefashionlaw.com/protecting-your-brands-in-the-metaverse-issues-for-companies-to-consider-parti/?utm_source=Evolok+PROD&utm_campaign=455d9f219c-subscriber-weekly-digest-july-22&utm_medium=email&utm_term=0_9b49635b30-455d9f219c-514340059&ct=t(subscriber-weekly-digest-july-22     

Chambers, L., Longster, J., Reavill, D., & Reddish, H. (2022b). “Protecting Brands in the Metaverse: Issues for Companies to Consider” Part II. https://www.thefashionlaw.com/protecting-brands-in-the-metaverse-issues-for-companies-to-consider-part-ii/  

Clark, B. (2018). Blockchain and IP Law: A match made in Crypto Heaven?, WIPO Magazine, 1/2018, https://www.wipo.int/wipo_magazine/en/2018/01/article_0005.html 

Dolmestsch, C. (2022). Nike Escalates Stock X Feud, Says Site Is Selling Fake Shoes, https://www.bloomberg.com/news/articles/2022-05-10/nike-escalates-feud-with-stockx-says-site-is-selling-fake-shoes 

European Innovation Council and SMEs Executive Agency. (2022). Intellectual Property in the Metaverse. Episode II: Trade Marks”, https://intellectualpropertyhelpdesk.ec.europa.eu/newsevents/news/intellectual-property-metaverse-episode-ii-trade-marks-2022-03-29_en  

Fält, L., Yong, L., & Wen, Y. (2022). Questions Brands Should Be Asking About Trademarks in the Metaverse”, TFL, https://www.thefashionlaw.com/questions-brands-should-be-asking-about-trademark-protection-in-the-metaverse/ 

Hermès International v. Mason Rothschild, (2022a). https://www.ledgerinsights.com/wp-con­tent/uploads/2022/01/MetaBirkins-Hermes-v-Rothschild.pdf 

Hermès International v. Mason Rothschild, 22-cv-00384-JSR, at *1 (S.D.N.Y. May 18; 2022b). https://www.sdnyblog.com/files/2022/05/22-Civ.-00384-Hermes-v.-Rothchild.pdf 

Johnson, S. (2022). NFT, Metaverse-focused trademark applications continue to climb in the US”, BusinessNews, https://biz.crast.net/nft-metaverse-focused-trademark-applications-continue-to-climb-in-the-us 

Lastiri Santiago, M. (2008). Los desafíos del derecho de marcas en los mundos virtuales como el Second Life”, Revista de contratación electrónica, núm. 99, 123-169.

Mahmood, G. (2021). “NFTs: What are you Buying and What Do you Actually Own?, TFL, https:// www.thefashionlaw.com/nfts-what-are-you-buying-and-what-do-you-actually-own/

Miramax LLC. v. Tarantino. C.D. Cal., Noª 2:21-cv-08979, 6/21/22. (2022). https://www.bloomberglaw.com/public/desktop/document/MiramaxLLCvQuentinTarantinoetalDock­etNo221cv08979CDCalNov162021Co?1660309477  

Nike, Inc v. StockX LLC, 22-cv-00983 JSR, AT *1 (S.D.N.Y. February 3; 2022a) https://heitner­legal.com/wp-content/uploads/Nike-v-StockX.pdf 

Nike, Inc v. StockX LLC, Nª22-cv-00983-VEC, at *1 (S.D.N.Y. March 31; 2022b) https://fingfx.thomsonreuters.com/gfx/legaldocs/znpneqjxnvl/IP%20NIKE%20STOCKX%20answer.pdf  

Park, K. (2022). Trademarks in the metaverse WIPO Magazine, 1/2022, https://www.wipo.int/wipo_magazine/en/2022/01/article_0006.html  

Polaroid Corp. v. Polarad Electronics Corp., 287 F. 2d 492 (2d Cir. 1961)

Poritz, I. (2022). Hérmes’Trademark Battle Over MetaBirkin NFTs Moves to Trial, https://news.bloomberglaw.com/ip-law/hermes-trademark-battle-over-metabirkin-nfts-moves-to-trial  

Robertson, A. (2022). Quentin Tarantino settles NFT lawsuit with Miramax, https://www.theverge.com/2022/9/9/23344441/quentin-tarantino-pulp-fiction-nft-miramax-lawsuit-settled  

Rogers v. Grimaldi, 695 F. Supp. 112 (S.D.N.Y. 1988). https://law.justia.com/cases/federal/district-courts/FSupp/695/112/2345732/  

Sheldon, D., & Vandsburger, L. (2021). The ABCs of NFTs, Bar News. Washington State. The Official Publication of the Washington Bar Association, Vol.75, Nº5.

Shubham, A. (2022). Centralized Vs Decentralized Metaverse. Which Omen is Safe. Deasilex. https://deasilex.com/centralized-vs-decentralized-metaverse/ 

TFL. (2022a). USPTO Sheds Light on Issues With Metaverse Trademarks Moves” The Fash­ion Law, https://www.thefashionlaw.com/uspto-sheds-light-on-issues-with-companies-metaverse-trademark-moves/ 

TFL. (2022b). Early- Movers Are Facing Challenges Over Metaverse Trademarks in China, https:// www.thefashionlaw.com/early-movers-face-challenges-in-registering-metaverse-trade­marks-in-china/ 

WIPO. (2007). IP and Business: Second Life – Brand Promotion and Unauthorized Trademark Use in Virtual Worlds, https://www.wipo.int/wipo_magazine/en/2007/06/article_0004.html 

WIPO. (2022). https://www.wipo.int/publications/en/details.jsp?id=345 

Zerbo, J. (2022). Yuga Labs Flies Trademark Lawsuit Against Ryder Ripps Over “Fake” Bored Ape NFTs”, TFL, https://www.thefashionlaw.com/yuga-labs-files-trademark-lawuit-againstryder-ripps-over-fake-bored-ape-nfts/