The Metaverse: Artistic Uses Of Trademarks In Virtual Spaces

• Published date: 18 October 2022
• Subject Matter: Consumer Protection, Intellectual Property, Consumer Law, Trademark
• Law Firm: Holland & Knight
• Author: Mr Jacob W Schneider

The metaverse provides new opportunities to engross consumers in branded environments. A brand can, for example, produce an entire curated, virtual world for the consumer to explore. As a real-world analogy, such virtual spaces are like immersive displays at industry trade shows: consumers step into a space that is defined in all respects by the brand owner. The metaverse can be a powerful tool to push brand messaging, but it can also be a space where your brand is used against a company's wishes. This post explores an "artistic expression" defense to trademark infringement that could be prevalent as the metaverse evolves, and could also provide a lawful defense to using others' trademarks online.

I. Trademark Law Basics

As background, trademarks are source-identifying marks (e.g., logos, product names and even colors) that indicate to consumers from where a product or service originated. Trademark law's goal is to avoid consumer confusion and promote fair competition. In a marketplace, it is critical that consumers know from where goods and services originate so they know what they are getting when they make a purchase and brands are incentivized to establish good reputations for providing quality goods.

As an example, Holland & Knight's name and logo are trademarks, and they indicate that legal services are originating from our firm. If another law firm started using the Holland & Knight logo to provide legal services, clients would be misled as to whether they were receiving legal counsel from Holland & Knight or someone else. In that case, the real Holland & Knight would have a claim for trademark infringement at least under the Lanham Act.

II. Fair Uses of Trademarks

While the owner of a trademark has a right to use it in commerce and exclude others from doing so, there are "fair use" defenses to infringement that prioritize fair competition and other rights above the trademark holder's interests. Below are a few fair use defenses, but there are numerous others:

• It is a fair nominative use to discuss a trademark while describing a branded product or comparing it to another brand. In New Kids on the Block v. News America Publishing Inc., 971 F.2d 302 (9th Cir. 1992), the defendant newspaper was allowed to use the trademark "New Kids on the Block" to conduct a survey about the boy band (from Boston).
• It is a fair expressive use to parody trademarks in creative works. In Mattel v. MCA Records, 296 F.3d 894 (9th Cir. 2002), a band was permitted to...