The metaverse has been a hot topic recently. On October 28, 2021, Mark Zuckerberg announced that Facebook changed its name to Meta, in order to “reflect its growing focus on the metaverse.” The rebranding signals the company’s ambition for future social interaction. Other companies, such as Apple and Google, also have their own plans for the metaverse.
What is metaverse?
The term "metaverse" itself means “beyond the universe.” It was coined 30 years ago by Neal Stephenson in his novel “Snow Crash.” Somehow resembling to Meta’s vision, the writer envisioned a world where people live in virtual homes, streets, shops and parks as digital avatars.
But what is metaverse? Though there is no single comprehensive definition, the metaverse is often understood as an advanced successor to the mobile internet, in which people are constantly within a “virtual” or “3D” version of internet. Like mobile internet, the metaverse is a technology platform that hatches secondary innovations, allowing people to socialize, entertain, shop and work.
Unlike in “Snow Crash” where people only use the virtual world to evade the reality, the metaverse could be closely connected to the physical world. For example, think about navigation applications like Google Maps. Now, we use mobile phone to access the internet and rely on a 2D roadmap for navigation. However, the directions may become fuzzy when we get lost in a complex infrastructure, such as a city overpass or an airport. In the future, augmented reality (AR) technology may overlay directions, street signs and landmarks over the real world, making navigation much clearer and more convenient.
Because of the metaverse’s two distinct features - virtual in nature, but closely connected to the physical world, the metaverse creates many new questions on intellectual property law.
Copyright & Trademark
In order to provide the real-world experience to users, developers of the metaverse often incorporate real world elements into their designed scenes, including: buildings, roads, shops, and natural landscapes, as well as products and works which may lead to into copyright and/or trademark disputes. For example, introducing a real-world sculpture into the virtual world could risk infringing copyright, and displaying the name of a restaurant or shop may risk infringing trademark.
Infringing trademark in the virtual world has already been litigated in cases involving videogames. In AM General LLC v. Activision Blizzard, Inc., AM accused Activision of trademark infringement for repeatedly using its “Humvee” trademark in Activision’s videogame franchise “Call of Duty.” The court granted a summary judgement in favor of the videogame producer, reasoning that “enhancing the games’ realism was enough to determine the use of Humvees as a part of the games artistic expression and thus protected by the first amendment.
Growing the number of transactions concerning virtual assets could lead to more litigation on trademark/copyright infringement in the virtual world. Another technology that has made virtual asset transaction easier is NFT, or non-fungible tokens. NFT is a blockchain based technology. Each NFT is unique and irreplaceable unit of data, allowing people to own and transact a decentralized digital asset, such as a work of art. Luxury brands like Givenchy and Louis Vuitton have launched their own NFTs. As brands continue to establish their presence and enforce their IP rights in the virtual world, courts may reconsider their position and more willing to protect IP rights in the metaverse.
The metaverse is based on various underlying technical infrastructures, including 5G, VR, AR, artificial intelligence, block chain and cloud computing, etc. The development and application of the metaverse will likely give rise to patent challenges, including standard essential patent disputes in 5G technology, patent licensing related to artificial intelligence and cloud computing, or patent technology infringement of VR and AR infrastructure.
The metaverse may also create new standard essential patents in addition to 5G patents. The metaverse aims to connect people in a digital world and allows them to socialize, entertain, and shop. Therefore, there is an inevitable requirement of interoperability, which means technology companies may need to agree to specific technical standards for the metaverse so that they can interoperate among different companies. Like in the field of communications, the metaverse may become the next standard essential patent battle ground for technology companies.
Also, similar to questions related to copyright and trademark, whether patent protection extends to the realm of the metaverse is unclear. For example, developers may rely on real-life automobiles to design car models in the metaverse to enhance its realism, which could turn out falling into the automobile manufacturer’s design patents. Whether this hypothetical scenario constitutes patent infringement requires further clarity.
Territoriality is a principle of intellectual property law, which means IP rights are limited to the specific territories where they are granted. This principle allows countries to tailor IP laws to fit their development status and policy goals. The advance of internet has blurred the boundary of the countries. The metaverse will inevitably further break down the regional boundaries of IP. Imaging a user from country A produces and sells digital assets in virtual world X operated in country B, which infringes the trademark of a company in country C. The metaverse will bring serious challenges to the territoriality principle of the IP law.
 AM Gen. LLC v. Activision Blizzard, Inc., 450 F. Supp. 3d 467 (S.D.N.Y. 2020)