Non-fungible token and intellectual property matters in the Metaverse

Non-fungible token and intellectual property matters in the Metaverse

In the last few years, virtual asset transfers like non-fungible tokens (NFTs) have become common in the tech sector, and the focus of virtual interactions has changed to the “Metaverse.” Some major firms, including Meta (previously Facebook) and Microsoft, have declared plans to create new Metaverse platforms for both entertainment and employment. However, public debate of Metaverse’s legal difficulties is now limited to an emerging concept and the lack of a comprehensive legal framework governing Metaverse and associated technology. From the perspective of intellectual property (“IP”) law, this article will address the potential legal difficulties raised by the Metaverse and Web 3.0 technologies.

Metaverse has brought up a number of concerns about intellectual property

Because Metaverse is developed with computer software, including various types of programs or computer technologies that may be run and/or generated using artificial intelligence, it creates novel and difficult legal challenges. Patents, photographs, copyrights, trademarks, designs, and drawings may all be involved in Metaverse’s operation, which necessitates the use of particular internet expertise.

It should come as no surprise that activity on the Metaverse may infringe on intellectual property rights. Patents, registered trademarks, drawings, and copyrighted items may be minted without the permission of the real content creator, in violation of existing license agreements, or may mimic patents, registered trademarks, drawings, or copyrighted materials in the physical world.

However, the Metaverse’s very existence raises new issues that existing laws would not have foreseen. Determining the identity of the creators of work in the Metaverse may be more challenging when the work is the outcome of a decentralized collaborative process including people who are anonymous behind avatars. Apart from that, since NFT is a type of computer calculation product, whether digital assets may qualify as “goods” for the purposes of trademark laws under the current IP framework is still uncertain. Furthermore, because Metaverse users are hidden behind a screen, determining the identity of the infringer may be difficult, making the individual who should be held accountable ambiguous.

Taking a step back, IP owners are perhaps the most concerned about how to enforce IP rights in the Metaverse against infringers before the problem of liability can be resolved. Specifically:

  • Determination of the infringement: In contrast to typical physical counterfeiting, Metaverse resides in an infinite space on the internet. Because a number of servers managing the Metaverse may be engaged, it is difficult to determine the identities of the infringers and the actual “place” of the infringement.
  • Governing law and jurisdiction: Different courts throughout the world have different perspectives on the Metaverse and the IP concerns that arise from it. It’s arguable which court would have jurisdiction to hear an IP infringement lawsuit on the blockchain, while certain NFT platforms may have their own dispute resolution process, while others may not.

The list of international IP Firms can be found here.

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