metaverse: the next commercial frontier | Smith Gambrell Russell



It looks like the next trade frontier is the so-called “metaverse”. The term “metaverse” was first used in science fiction novels. It combines the word “universe” with the prefix “meta”, which comes from a Greek word meaning “beyond”.[1] In the technical sphere, the “metaverse” is a form of virtual universe whose style is defined. Several tech and gaming companies have entered the fray to define what this metaverse will be. An American writer, Neal Stephenson, referred to his idea of ​​the metaverse in his 1992 sci-fi novel, Snow Crash. Stephenson envisioned an immersive virtual world where people can meet, work and play using connected devices such as virtual reality (VR) headsets, video game consoles and augmented reality technology.

Roblox and Fortnite provide users with interactive virtual worlds where countless avatars of human users can play games, relax, or even attend “live” music concerts. Roblox and Epic Games (the developer of Fortnite) are investing in the user experience of their version of the Metaverse by offering a virtual version of real events and updated avatar customization. While we were locked in our closet-shaped offices, these platforms provided an outlet for millions of people to connect with each other when connection and closeness were a concern. But that doesn’t stop with games and virtual concerts. What about the conferences? Many teleworkers have referred to “zoom fatigue” or the like, noting that video conferencing fills a need, but it cannot replace in-person collaboration. Enter the metaverse.

At the same time, we are seeing another seismic shift from the tangible to the virtual – in the non-fungible token (NFT). An NFT can be thought of in simpler terms as a digital self-authenticator. Whatever digital asset is attached to that token, it will be immutably married to a unique address. With the use of encryption keys, these tokens and digital assets can be signed and transferred. A private encryption key is proof of ownership of the original digital asset. The public encryption key of the creator of the digital asset acts as the certificate of authenticity for that digital asset. In other words, with these keys, one can easily prove that they own the original digital asset. Some claim this is the end of digital counterfeiting.

As technologists scramble to define and develop exactly what the metaverse (s) will be and what digital assets will be traded in this metaverse, several IRL companies (in real life) are taking steps to ensure their brands are protected across the board. this virtual world.

  • Facebook has announced its corporate name change to Meta.
  • Baidu has applied for registration of the trademark METAAPP for research on scientific instruments and design.
  • Gaming giant NetEase has also filed dozens of trademark applications related to the metaverse, including “NetEase metaverse”, “Fuxi metaverse” and “Leihuo metaverse”.
  • Alibaba has filed for trademark registration, including “Ali Metaverse”.

So far, more than 400 companies in China have registered trademarks for terms related to the metaverse.[2] And it’s not just about META brands. Companies file trademark registration applications for virtual products and services that may exist in the NFT or metaverse space.

Nike, Inc., for example, recently filed for registration of its trademark NIKE and its trademark JUST DO IT in classes 9, 35, and 41, including for computer game programs containing virtual goods, as well as the protection of virtual services for use in online virtual worlds. An important point we emphasize is the protection of a wide range of entertainment services protecting non-downloadable online virtual material.

Other brands are entering the virtual space, with Dolce and Gabbana announcing that they have auctioned off a collection of nine digital NFT coins, or non-fungible tokens, as well as actual tailoring for a total of 1,885.719 Ether (crypto Ethereum currency), or the equivalent of nearly $ 5.7 million.[3] Burberry and Louis Vuitton have adopted this virtual environment by offering users in-game resources.[4]

It is undeniable that the virtual environments embodied in NFTs and the metaverse are attracting the attention of consumers and brands. But, from a purely business perspective, what are the best practices?

Fortunately, the United States Patent and Trademark Office (USPTO) has been at the forefront of identifying how to protect these types of intellectual property. As early as 2007, the Nice Classification System, and later the USPTO, identified areas of protection for virtual worlds with the descriptions of “entertainment services, namely providing virtual environments in which users can interact with each other. recreational, leisure or entertainment purposes ”. This specification is of interest only for classification purposes.

The virtual environment has been designated as a place of entertainment and, as such, was designated as a Class 41 service. Moreover, around the same time, classification bodies identified that the “creation” of the virtual environment / world and the ” programming ‘of these environments are protectable as computer services in class 42. Class 41, as an education and entertainment service, and class 42 as computer programming and computer services, remain areas of protection vital to this day and likely will do so for many years to come. These areas represent two of the most vital areas of protection for creators and virtual consumers.

This raises an interesting question for protection. Can virtual goods be protected as goods? By definition, it would seem not. Goods and products are tangible elements. Virtual goods are intangible. Fortunately, the governing bodies of the International Classification have identified a path towards the protection of virtual objects. In accordance with the decisions of the beginning of 2007, these “virtual goods” are protectable, not as tangible elements but as forms of virtual entertainment. To protect these areas, the following specification has been developed, “entertainment services, namely, providing non-downloadable online virtual goods, for example, clothing, pets, furniture, etc., for use in businesses. virtual environments created for entertainment purposes’ in class 41.

Obviously, the protection of entertainment services in Class 41 is paramount, and the protection of the creation of non-downloadable computer services is important in Class 42. Class 9, for the protection of computer programs, could also be important. , but with the important distinction that virtual goods are not directly protected but downloadable computer programs are protected, and these programs characteristic virtual objects.

So where are the non-fungible tokens (NFTs)? These elements are used as sources of authentication. They are not a product and, in themselves, not a service. The United States Trademark Identification Manual describes that “Non-fungible tokens (NFTs) are held on a blockchain and typically represent digital items and authenticate their ownership.” The Trademark Manual identifies NFTs as examples of authentication of other items, not as an individual product or service. Examples are “downloadable music files authenticated by non-fungible tokens (TVN) ”, In class 9; ‘Providing an online marketplace for buyers and sellers of downloadable digital art images authenticated by non-fungible tokens (TVN) ”In class 35; and ‘providing an online marketplace for buyers and sellers of downloadable digital goods, for example, art images, music, video clips, etc. authenticated by non-fungible tokens (TVN) ”, In class 35. (emphasis added). Here we see that NFTs are not individually protected as a product or service.[5]





[5] While the creation of NFTs are reasonably protectable as computer programming services, if those services are performed by others.



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