Open Access Research Article
Marketing in Metaverse and the accompanying IP issues (By-Krishnadev K)
Published Paper
Article Details
Marketing
in Metaverse and the accompanying IP issues
Authored By-Krishnadev K
What Is Metaverse ?
Metaverse in the broadest sense can
be described as a Virtual 3D Space in which a person can move freely, interact
with others and express themselves. There are many definitions to what is
metaverse. The concept of what is metaverse is not a restrictive one but rather
of encompassing nature. Therefore, Metaverse would include virtual spaces where
people work alongside each other, where people play adventure games in an
interactive 3D world with their friends or other real people through the games
and more. It could be defined simply as a 3D virtual world in which people
could socialize, play and work.
Some of the companies developing
metaverse are Microsoft, Meta previously known as Facebook, Nvidia and more.
Microsoft is currently developing a
metaverse platform called Mesh which is primarily designed for work will let
you replace your video presence with an avatar, create virtual rooms, and
implement 3D spaces in Teams. Meta’s metaverse is aimed at social interactions
and social media.
There are Several arguments for and
against a future based of metaverse but as the metaverse is still in its early
stages of development we cannot conclusively rule that these arguments are true
or false apart from a few proven ones. A Proven benefit of metaverse is in the
Education and training sector. Metaverse has benefitted US army that the
training period for repairing their helicopters has reduced from 18 weeks to 10
weeks. Infosys had collaborated with a pharmaceutical company to create a
digital twin of their vaccine lab enabling them to assess critical data to make
predictions and decisions. There are opportunities across industries for
Metaverse implementation. Evidently, Higher education, medical, military and
other types of trades will deliver a more immersive learning experience. They
would be able to take advantage of the framework provided within the Metaverse.
Retail can expand their market by providing an Immersive Shopping Experience
through Metaverse. Enterprises can achieve better engagement, collaboration and
connection with their employees through virtually augmented workspaces. Social
media could move to the Metaverse, where users may interact through
three-dimensional
avatars which may become a highly
valued component.[1]
Marketing has also evolved in the
Metaverse. Coca Cola had hosted concerts in the metaverse starring Ava Maxx as
part of its marketing for a metaverse drink. Warner Bros had offered a virtual
rendition of the Washington Heights Neighborhood in promotion of their movie
“In the Heights”.[2] Most
Recently, Yashoda Hospitals Group from Hyderabad acquired a parcel of land on
the Metaverse platform “Decentraland” to commemorate its 30+ years of
healthcare services.[3]
Union Bank has also entered into a partnership with Tech Mahindra to Launch a
“Metaverse Lounge”.[4]
Videogame Fortnite had hosted a
concert by Travis Scott which saw the attendance of millions of avatars and the
concert was described by Forbes as “A Stunning Spectacle and A Glimpse at The
Metaverse”.
Therefore, it is no stretch of Imagination
to say that Metaverse will play a major role in the future as it evolves. Citi
has estimated in its report titled “Metaverse and Money, Decrypting the Future”
that the Metaverse economy could be worth up to $13 Trillion by 2030 from the
Current value of $8 Trillion. [5]
A
Decentralised Metaverse
Currently, it seems that the
metaverse can be built on two different foundations:
One that is centralized and
controlled by giant corporations such as Meta or one that is decentralized and
controlled by the people who will inhabit the metaverse. A Centralised
Metaverse will involve a single entity governing the entire network. The
Community can interact together and share experiences, but they don’t have the
freedom to control or own pieces of the digital environment. The Virtual
community in centralised environments, such as Fortnite and Roblox, lives
within the confines of a centrally controlled space, and users are restricted
within those parameters. An example of Centralised
metaverse would be Meta owned Metaverse which is still under development.[6]
A Decentralised metaverse would mean
that the users would have the freedom to control their
own experience almost entirely. The
control of the platform lies within the community (rather than one central
authority) i.e. it will be governed by
users; meaning they have a lot more individual control over not just their own
individual assets, but over the way the Metaverse itself is built and operates.
The decentralized Metaverse is emerging hand-in-hand with blockchain projects.
An Example of decentralized Metaverse would be Decentraland.
A Big criticism of a Centralized
metaverse is that it would be a Data harvesting center especially more than the
current Internet as metaverse is also aimed to read and learn about our rooms,
facial expressions, movements and more. Skeptics believe that the data is most
likely to be abused by corporations with the current news of
Cambridge-Analytica Scandal.
Decentralised metaverse would address
the privacy and data protection problems with Blockchain technology unlike the
centralized metaverse. Several Metaverses have taken advantage of blockchain
technology to deliver user-owned experiences that are resistant to censorship
and interoperable with one another. For Example, Decentraland is a fully
decentralized world on the Ethereum blockchain, managed by a Decentralized
Autonomous Organization (DAO) made up of individual players who may vote to
change the policies that govern how the world operates. Decentraland has its
own cryptocurrency, MANA which can be freely traded on cryptocurrency exchanges
for other currencies. These Virtual reality universes tokenise in-game assets
and land parcels to give players the ultimate control over the world they
inhabit and help create—the same control they enjoy over their real-world
possessions.[7]
These metaverses are already seeing a
land grab by the individuals and corporations.
Renting plots of land and virtual Infrastructure where events can be
hosted and renting of digital billboards in the metaverse are already underway.
Practical
Applications Of Metaverse
There are Several Applications of
Metaverse some of which include Improved Business operations, Enhanced customer
experience among more. Implementation of Metaverse by companies could improve several
aspects of their Business. Moreover, there are benefits of metaverse which
cannot be listed as the evolution of metaverse is still at a nascent stage and
those can only be discovered with time. Some of the Relevant Applications of
metaverse include
Improved Business Operations: The
Metaverse should deliver a much more immersive experience to operations workers
who should be able to use the technology to guide even the most complex field
and service work, and be able to coordinate more fully with others.
Improved Education and Training: As
Mentioned Before, US Army has adopted metaverse in imparting training to their
new recruits and has been able to shorten the training duration from 18 weeks
to 10 weeks.
Advertising, branding and marketing
opportunities: Several Companies have taken to metaverse to establish their
presence in the metaverse and to establish themselves as “Digital and
Tech-savvy”. As Mentioned, Companies have begun grabbing land to hosting
concerts in the Metaverse whereas Disney have begun projects to branding their
own Metaverse Projects and envisions that physical and digital world shall
converge.
Work Meetings: Tech Companies are
looking to develop metaverse as the place for Virtual work meetings. This would
mean that Virtual meetings will move from 2D to 3D Space with Digital Avatars.
Bill Gates states that the idea is to replicate the feeling of being in an
actual room with them. Critics say that the VR meetings would be less enticing
than Zoom Meetings where people can still do real world things such as drinking
coffee.[8]
Legal
Issues Surrounding Metaverse
The Introduction of Metaverse would
cause several legal challenges which cannot be resolved at the moment simply
because our laws and regulation have not evolved yet to include the vast scope
of metaverse and the crimes and violations that could occur inside it. As of
now, the GDPR nor IT act addresses the entirety of the scope of Metaverse. The
Concerns regarding Metaverse are Multifold and only Ever-growing. There have
been incidents which vary from IP infringement suits to reports of Rape in the
metaverse owned by Meta.
IP Infringement Issues
As there is an increasing presence of
metaverse and more companies joining metaverse for their marketing and sale of
their virtual products, it becomes necessary to develop remedies for the owner
incase their IP rights have been infringed. Intellectual property issues are
particularly relevant since the Metaverse encapsulates a range of technologies,
literary and artistic works, designs, logos, symbols and imagery, most of which
have historically been protected under intellectual property law regimes.
In Another Incident in Second Life
the gist of the copyright dispute between the parties is whether Plaintiff’s
virtual horses infringe on copyrights associated with Defendant’s virtual
bunnies. The Ozimals Incorporated produces “breedable” animals within Second
Life, and contend that a competing company, Amaretto Ranch Breedables, was
infringing on their copyrights. Ozimals insists that it’s not claiming
copyright on all breedable animals, but that Amaretto directly copied its
expression. Amaretto filed for a restraining order with the prayer to prevent
Second Life from taking down their animals via a DMCA notice from Ozimals. The
court agreed, and has barred Second Life from taking down the content.[9]
In January 2022, French fashion house
Hermès sued a Non-Fungible Token (NFT) creator Mason Rothschild, who marketed a
line of digital assets called "Metabirkins," digital duplications of
the Birkin bag created by Hermès . Hermès alleged trademark infringement and
dilutive use of the Birkin name.
The Practice of IP in Metaverse would
involve questions of jurisdiction, territoriality, and conflicts of laws, none
of which have been neatly resolved for even the current iteration of the
internet let alone fully realized virtual worlds with an even greater degree of
interaction and user immersion.
There is a lot of dispute and
confusion regarding how IP law should be applied to the Metaverse. The Administrators
of the estate of Indian artist MF Husain disputed TamarindArt LLC's ability to
proceed with a project involving the sale of NFTs based on Husain's painting
titled "Lightning." TamarindArt has an exclusive, worldwide,
royalty-free license to reproduce the artwork in any format, including digital
formats, but the estate administrators issued a cease-and-desist notice to
TamarindArt, claiming that the latter was not the "copyright owner"
and thus had no right to reproduce, distribute copies, create derivative works
based on it, or publicly display it. [10]
In another incident, Film Director
Quentin Tarantino had been minting and selling NFTs of the screenplay of Pulp
Fiction. Soon Enough, the Production company of the Movie MIRAMAX sued him
stating that he does not own the rights to the screenplay. Miramax claimed they
owned the “broad rights” to offer NFTs based on the script meanwhile Tarantino
argued that the original deal he signed gave him the right to “publish” his
screenplay and therefore he has a right to
publish NFTs on the blockchain.[11]
A Common question arises in these
cases i.e Does the Rights to a physical property entitle them to produce
virtual goods based on that Physical property.
In late 2019, Nike obtained a patent
called “Cryptokicks” which consists of blockchain mechanism. This effectively
ensures that when one buys a pair of physical sneakers, they will also get a
cryptographic token representing the ownership of the physical pair of sneakers
and such tokens can be stored in a cryptocurrency wallet and transferred to
other parties. Several other companies have also moved trademark applications
for the marks such as NYSE, DKNY, PUMA, WALMAR. In these filings, goods such as
“downloadable virtual reality, augmented reality, and mixed reality
software”; "downloadable computer software and application programming
interface (API) to allow users to access, maintain, store, display, buy, sell,
and trade virtual and digital assets, artwork, collectibles, and non-fungible
tokens"; "downloadable virtual goods, namely, non-fungible
tokens"; "blockchain-based non-fungible tokens (NFTs) and NFT
collectible series"; "digital media, namely, digital collectibles,
digital tokens, non-fungible tokens (NFTs), cryptocurrencies, and digital
art"; "downloadable virtual goods, namely, computer programs
featuring clothing, colors, badges and tools for use in online virtual
environments"; "downloadable virtual goods, namely, computer programs
featuring clothing, colors, badges and tools for use in online virtual
environments"; "entertainment services, namely, providing on-line,
non-downloadable virtual footwear, clothing, headwear, eyewear, bags, sports
bags, backpacks, sports equipment, art, toys, accessories, digital animated and
non-animated designs and characters, avatars, digital overlays, and skins for
use in virtual environments"; etc., are being used for Metaverse
related trademark filings globally. The Primary classes for filing these
trademark applications are Class 9 – Electric and Scientific Devices and Class
42 – Computer, Scientific and Legal. [12]
Even if the existing NICE
classification and IT act is updated to keep up to the metaverse, there is
still a question of how IP rights can be enforced as the existing framework and
regulations will be incapable of regulating the Metaverse.
Enforcement of IP Rights
The Hurdles to the Enforcement of IP
Rights are Twofold. These are the Issues of Identification of Infringing Party
and in deciding the jurisdiction of the court in hearing the issue.
The Case of Infringement against
Hermès were unfazed with these issues as the alleged Infringing party had
identified himself. But Soon, As the Metaverse will be based on Blockchain
technology even if the virtual identity is discovered their real-world identity
would not be discovered. Therefore, there arises the risk of large no. of
offenders as people would commit crimes without a care when under a
pseudonymity.
In the Current iteration of Internet,
the platforms have developed a mechanism where the affected parties could
report their claims to the platform in order to remove the infringing material.
Amazon and Flipkart are an example for this as they have removed several
infringing materials from their platform upon the information received by them.
This could also be the model in the Metaverse where platforms would enforce
protocols/policies to remove Infringing material. Evidently a need for
regulation will arise whether it be a govt regulation or regulation by the
platform itself.
Until then, the best practice for
companies would be to file trademark applications under the relevant classes to
protect their trademarks but the question still remains on whether they can be
raised against digital avatars which can only be solved with the Development of
Jurisprudence.
Article Information
Marketing in Metaverse and the accompanying IP issues (By-Krishnadev K)
Authors: Krishnadev K
- Journal IJLRA
- ISSN 2582-6433
- Published 2022/08/05
- Volume 2
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
- Access Open Access
- License CC 4.0
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