The Metaverse, NFTs; IP in the Virtual World

Back to All Thought Leadership

Rumour has it that the hot topic for 2022 will be the metaverse and NFTs (Non-fungible tokens), and it seems it would be the right thing to say. The recent premieres of Spider-Man: No Way Home and The Matrix Resurrections are just two examples that it is a hot topic within millennials, centennials, and other generations.

However, it is also a very important issue for companies such as Facebook (who recently changed its name to Meta) and other technology developers in which the debate about the metaverse, digital environments with presence and activities in the physical world is becoming the trend within technologies and investors who believe in this assumption. Also, companies such as Nike, who recently bought a virtual shoe company that makes NFTs, a trend that other luxury companies have shown starting on the metaverse.

What is a metaverse?

“A “metaverse” is a network of 3D virtual worlds focused on a social connection in futurism and science fiction; the term is often described as a hypothetical iteration of the internet as a single, universal virtual world that is facilitated using virtual and augmented reality headsets. The term “metaverse” has its origins in the 1992 science fiction novel Snow Crash as a portmanteau of “meta” and “universe”. Various metaverses have been developed for widespread use, such as virtual world platforms like Second Life. Some metaverse iterations involve integration between
virtual and physical spaces and virtual economies, often including a significant interest in advancing virtual reality technology.”1

As mentioned before, the metaverse is a recent trend; however, the concept has been around for some years. There have been quite a good number of series and movies that portrayed the idea of the metaverse in the past years: Black Mirror, Minority Report, Westworld, The Matrix, 2001: A Space Odyssey, to mention a few.

“Blockchain is one of the core technological interventions in recent times which have become popular in a short duration. It played a significant role in resolving the problem of double-spend by serving as the foundation for Bitcoin blockchain. Subsequently, blockchain also served as the basis for creating NFTs or non-fungible tokens, which introduced the traits of interoperability and scarcity.”2

NFTs are a new class of digital assets, whichare unique, indivisible, and immutable; they represent the ownership of digital and physical assets on the blockchain. It offers the prospects for unlimited business opportunities and social interaction. Metaverse and NFTs are different things, but many people blend them and assume that NFTs are just another component. What is
really happening due to the wide range of opportunities is that many new projects are capitalising on the intersections between NFTs and the metaverse.

IP & the Metaverse

What is happening is that today there is an economy in the metaverse. So, what about intellectual property, specifically trademarks, in the metaverse and NFTs? While researching the classification, for example, for virtual goods, I found unexpected results. I tried to look for virtual goods in the Mexican classification and couldn’t find anything at all. I then used the platform called TM class, and in Spanish, there is not a single national office that accepts the term; finally, I used English as the searching language and found the following:

The USPTO accepts terms including this wording since April 9, 2009, for:

Class 42: Programming virtual (indicate type, e.g., articles of clothing, food) for use in online virtual worlds; (services);

Class 35: Retail stores services featuring virtual goods, namely) specify type, e.g., clothing) for use in online virtual worlds;

Class 9: Downloadable virtual goods, namely, computer programs featuring (specify nature, type, e.g., articles of clothing) for use in online virtual worlds;

Class 41, Entertainment services, namely, providing online, non-downloadable virtual (indicate goods, e.g., clothing, pets, furniture. Etc.) for use in virtual environments created for entertainment
purposes. (this does not include providing online virtual software as a fill-in);

At the very least, it is surprising that the USPTO has accepted the terms in its classification since 2009. Using English and Spanish, I couldn’t find another office that accepts the terms of these goods and services in their classifications. With time, more national offices will accept these terms and will include more and will probably harmonise them. In Mexico, it is fair to say that a filing for any of these goods and services would take some time for our office to agree with and accept the USPTO classification.

As I said before, an economy is building up in and around the metaverse, and luxury players in the physical world want a part of it. It is not only Nike acquiring RTFKT, a leading brand that delivers next-generation collectables, but luxury brands are using trademarks in a range of metaverse-related arenas, including “downloadable virtual goods”, virtual worlds and environments
and virtual clothing used in virtual spaces. And on metaverse platforms with usergenerated content, such as Roblox, creators are currently selling clothes that feature logos from the likes of Louis Vuitton, Prada and Chanel, as mentioned in a recent article on Vogue Business (https://www. As more players enter the metaverse with NFTs and other types of valuables, it is fair to say that opportunistic exploitation of trademarks, similar to counterfeiting, will occur in these virtual worlds.

On the other hand, it is wise to recommend our clients file their trademarks for the metaverse. The best enforcement practice is to plan for the future and secure our clients’ rights in these new virtual worlds. In the US and Europe, the numbers of this type of filings are increasing. Still, regardless of any classification issues mentioned before, we must secure rights in as many countries as
the client is interested. Metaverse and NFTs will be a boom worldwide and quick.

Also, we will have to think about licensing and distribution rights in the metaverse and be imaginative towards protecting our clients in these new digital worlds and digital assets.

In Mexico…

In Mexico, so far, we do not have any IP legislation in connection with this topic, as it may happen in other countries. Classification is dynamic, and goods and services may be included as needed. Current classifications will help with classes that cover these new realities; however, it is not the same goods or services. Imagine any type of clothing or accessories; a physical bag and an NFT
collectable bag are not the same. This will be very challenging, and I hope that legislation around the world will catch up with virtual environments as soon as possible. It is not the first time that the law will have to stretch to enforce rights in all these new situations; it happened at the beginning of the Internet and domain names in which, unfortunately, many unscrupulous people took advantage of the loopholes in the law.

On the other hand, I think that the metaverse will not necessarily replicate the physical world. Today you can find trademarks that are used in both worlds or trademarks that are used for NFTs (CryptoPunks) or trademarks that are only used in the metaverse, so lawyers interested and/ or specialised in this field will have to be creative on how to register, how to licence and how to enforce. It will indeed be similar, but we have to accept that it is the beginning of a new era in law. Ownership in the metaverse is not the same as ownership in the physical world.

To conclude

The metaverse is the new significant step in technology and innovation, I think it will expand immensely in the following years. I also believe that lockdown, home-office and the pandemic fueled this situation, as did the many recent motion pictures and series describing different types of the metaverse. If I can not go shopping in the new world, I will do it virtually. That is the reason for
so many new games, virtual worlds and NFTs together with new generations who want to have experiences of different sorts in such worlds. If this assumption is correct, IP lawyers will receive loads of work connected with GUIs, software, copyright and trademarks in the metaverse and the like. We will need, as lawyers, to understand the technology, blockchain and all issues surrounding these new projects to provide legal strategies that can protect our clients, secure their rights and make it possible to enforce them, instead of defending our clients because someone else took advantage of the loopholes that exist today.

As a lawyer, I am amazed by so many things that are new and innovative, the “old” 3D, which today can save lives, the haptics that will revolutionise fashion since they will stimulate the senses of touch and motion, cryptocurrencies, metaverse, multiverse, NFTs and whatever else someone will invent tomorrow. We are entering a challenging era as lawyers in which reality and legislation
will have to deal with the gap. We will have to be creative and innovative to advise and defend our clients.

Finally, I would like to find more legal articles about these topics in connection with IP. While researching to write this article, I found many pieces describing and analysing blockchain, NFTs, and other related issues from different legal fields and scientific fields, but not many, at least in my jurisdiction, about intellectual property in the metaverse. Let’s start creating a legal culture on this topic!

Recently published in ‘Women’s IP World, Annual 2022.

Written by Laura Collada, Managing Partner at Dumont, Mexico

Sign In

[login_form] Lost Password