NEWS SPONSORED BY DELL E-SERIES 24" MONITORS FROM DCC:

By Merlene Engelbrecht, associate and Thembokuhle Danca, candidate attorney, Spoor & Fisher

When Mark Zuckerberg, CEO of Facebook, Inc. announced on 28 October 2021, that the company’s corporate name will be changed to Meta Platforms, Inc. (“Meta”), the world’s interest was piqued by his use of the term “metaverse”. What does this term really encompass and what are the implications, for intellectual property elements such as trade marks and NFTs?

What is the Metaverse?

The word "metaverse" – coined in 1992 by the science fiction writer Neal Stephenson – describes a 3D virtual space. Some industry experts believe the metaverse could be the next version of the internet and it can be defined as the convergence of physical, digital, and augmented reality. In essence, the metaverse is a blur between reality and the digital world and the metamorphosis of the internet into an era of virtual augmentation. Matthew Ball, venture capitalist and managing partner of Epyllion Co describes the metaverse as "the successor state of the mobile Internet" and "a platform for human leisure, work and existence in general." It, therefore, comes as no surprise that it will bring about various business prospects insofar as consumers will straddle two worlds – the physical world and the digital world.

What is an NFT?

Non-fungible tokens (NFTs) are unique digital tokens that use blockchain technology to record ownership and verify authenticity. They are a new species of digital assets that are unique and verify ownership of digital and physical assets.

There is a close relationship between the metaverse and NFTs. The metaverse can be used to showcase virtual kinds of artwork and property, and NFTs will prove to be the ideal medium in which to carry, store and monitor digital information in the virtual space.

What are the early adopters doing?

We have already seen the adoption of the metaverse by well-known companies such as Nike, Microsoft, Gucci and Sony. These companies have taken steps to establish a presence in the metaverse, indicating that they regard this as an important market where their goods and services can exist and be consumed and acquired by consumers.  Nike recently filed several new trade mark applications in the United States for some of its well-known trade marks, including its SWOOSH logo and it’s JUST DO IT slogan. It also bought a virtual shoe company, RTFKT Studios, that makes NFTs and sneakers for the metaverse. Nike’s rival Adidas, in collaboration with Bored Ape Yacht Club, Punks Comics and GMoney launched and sold (minted) almost 30 000 of its “INTO THE METAVERSE” line of NFTs, earning the company a cool $22 million. Recently Walmart filed new trade marks pointing to its intention to make and sell virtual goods in respect to electronics, home decorations, toys, sporting goods, and personal care products. Luxury brands such as Ralph Lauren have also filed new trade mark applications in respect to virtual clothing and other digital goods.

These new filings cover a range of goods and services in classes:

9 - Downloadable virtual goods, namely, computer programs featuring footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys, and accessories for use online and in online virtual worlds.

35 - Retail store services featuring virtual goods, namely, footwear, clothing, headwear, eyewear sports bags, backpacks, sports equipment, art, toys, and accessories for use online; on-line retail store services featuring virtual merchandise, namely, footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys, and accessories.

41- Entertainment services, namely, providing on-line, non-downloadable virtual footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys, and accessories for use in virtual environments.

Why should I care about the metaverse?

As we all know, with every opportunity comes challenges. The question that you need to consider is how you can protect your trade marks from being misappropriated and/or infringed in the metaverse.

Registering your trade mark creates the presumption that this mark does not infringe upon those of others and as the owner of this trade mark, you would hold the exclusive right to use the mark in the virtual world in respect of those goods and services for which it is registered. You are then entitled to enforce these trade mark rights against any unauthorised use in the virtual world.

One of the more prevalent challenges that will be brought about by the metaverse is that it provides the space and opportunity for infringers to encroach upon and profit from the brand equity of well-established brands. Ensuring, therefore, that your trade mark is adequately protected in respect of goods or services functioning in the metaverse would be crucial.

As a first step, consider whether your trade mark registrations provide adequate protection in the virtual world. In other words, if you plan to use your trade mark in respect of goods or services in the virtual world, it should be protected in much the same was as it is currently being protected in the real world. We therefore encourage our clients to evaluate their trade mark portfolios and to consider whether filing in classes 9, 35 and 41 and potentially other classes of relevance, would be worthwhile to ensure adequate protection of their intellectual property rights. 

Most firms also provide a complementary watching service to their clients where clients will be notified if any confusingly similar trade marks to those registered and/or applied for in the name of other entities are advertised for opposition purposes.

Finally, the unauthorised use of your trade marks in the virtual world can also be stopped by notifying the platform of infringing material by means of a takedown notice. A takedown notice is a mechanism provided by most platforms, which allows brand owners to report any third-party infringement that may takes place on their sites.