Brand Protection And Enforcement Considerations For Trademark Owners In The Metaverse

• Published date: 06 December 2022
• Subject Matter: Intellectual Property, Trademark
• Law Firm: Jones Day
• Author: Ms Bethany Biesenthal, Meredith Wilkes, Megan McKeown and William Snyder

In Short

The Situation: The metaverse provides new commercial opportunities for businesses to reach consumers and creates new challenges for protecting and enforcing brands in a virtual environment.

The Result: Brand owners should consider seeking relevant trademark protection for potential uses of trademarks in the metaverse to best position brands to be leveraged and enforced in this virtual space.

Looking Ahead: U.S. courts are still evaluating how traditional trademark law principles apply in the metaverse, but early cases suggest that courts will apply real-world rules to the virtual world.

The metaverse is an infrastructure of technology that allows users to experience online networks in a 3D or virtual reality space. Dubbed the next generation of the internet, a fully developed metaverse may eventually connect all users across online virtual environments to socialize, share information, or transact business. At present, the metaverse consists of various siloed platforms that offer users a variety of online experiences'from video games to online virtual reality social networks.

The ability to engage customers in an interactive virtual space presents brand owners with new business opportunities, to advertise, test, and sell both virtual and real-world goods. For example, Nike sells digital sneakers to online players on the Roblox platform to customize its avatar's footwear. And KFC announced plans to launch virtual restaurants, where users can enter a digital KFC online and order real food for delivery. In short, the metaverse is open for business.

At the same time, the metaverse presents legal challenges. The use of a brand owner's trademarks by third parties in a virtual world may lead to consumer confusion or brand tarnishment, violating real-world laws that prohibit trademark infringement and dilution. The metaverse represents not just a changing commercial landscape but also a new setting for the development and application of trademark law.

New Worlds, Old Laws

The metaverse includes a virtual marketplace that allows users to purchase virtual and real-world goods and services. In the virtual marketplace, as in the real world, trademarks serve as source identifiers and distinguish a trademark owner's goods and services from those of others. The way in which goods and services are offered and sold in the virtual world, replicating transactions in the real world, justifies the conclusion that real-world trademark laws should apply to virtual...