March 7, 2022

Policing the metaverse – the legal landscape of a truly digital realm.

Boy with VR headset looks into the metaverse

Just as the creation of the internet baffled and intrigued people upon its launch, so too now with the metaverse.  The scope of the internet’s capabilities took time to be realised and utilised and the same can be expected of the exploitation of this new platform.  So, what is it, and what are the legal challenges that could surface?

The metaverse is a virtual reality world accessed through computers. Users can “live” in this virtual world, interact, and by using avatars style their appearance, and that leads to commercial opportunities for top brands.  The potential for commercialisation already exists.  In November 2021 it was reported that tokens.com (the crypto investment company) through its subsidiary The Metaverse Group paid USD $2.4 million – in crypto – for land exclusively in the metaverse.  Many fashion and retail brands are also known to be invested in this alternative universe. With examples like Nike and Adidas making recent headlines.

Purchases create rights, and that means liabilities

So, if land can be purchased in the metaverse it follows that rights will be enjoyed by the owners, and that means liabilities for others whether that be in access/trespass, rights to charge/receive tolls and rents. The intention of the creators of these virtual reality platforms is that users can enter the metaverse to work, shop, socialise, play games and so on endlessly.

What then of these brands that I mentioned, can they police the use of their trademarks in the metaverse?  Nike, for example, is it seems already alive to the possibilities and risks (of infringement) in the metaverse because it has applied for a series of trademarks in the US covering various goods and services including downloadable or virtual goods and retail store services featuring virtual goods. The virtual settings that the metaverse creates imitate the real world, enabling the user’s avatar to wear and touch branded products.  The scope for virtual counterfeit products is obvious.

Policing the metaverse

Whilst the intellectual property risks are the most immediate and obvious, what about other legal considerations?  In a virtual world that mimics the real world, like for like problems can arise.  What if a metaverse universe user steals or damages belongings of another, or the user’s avatar assaults another avatar?  Can a claim be brought in the real world for something that occurred in the virtual world?  That has not been tested yet, but in time it probably will.  Law firms are known to already have opened offices in the metaverse!

To access the 3D interactive metaverse a user must wear a headset; once adorned the user can no longer see his/her real surroundings thus there is a risk of injury when walking/falling.  Can a user get addicted and suffer from economic loss as well as mental damage?  Are all these potential claims that the hardware and software suppliers might face?

Some predict that the use of the metaverse will extend to the everyday business life, as well as social, for example hybrid meetings being 3D events at which delegates virtually meet as avatars, with mixed reality headsets to permit combinations between the real and virtual worlds. One thing that we can all be certain of however is that in the immediate future the metaverse will be a place of rapid change and countless applications - many of which have not even occurred to us yet. Some will create positive change, and others will force us to confront difficult decisions.

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