Brand Owners’ Top Five Questions About The Metaverse, Answered – New Technology

Some of the excitement has subsided in the last year, but the
metaverse is not going away any time soon.

As its evolution continues, brand owners need to stay on top of
developments, whether they class themselves as metaverse cynics,
evangelists or somewhere in between.

Wherever they fall on that spectrum, this guide will help
trademark advisers and their clients get on the same page, and stay
ahead of the competition in this constantly changing field.

1. Hasn’t the metaverse bubble already burst?

The hype may have died down, but reports of the metaverse’s
demise are greatly exaggerated.

A year ago, it was impossible to go anywhere online without
running into a metaverse think piece (or hit piece) – hailing (or
mourning) it as the future of internet communication.

The deafening metaverse buzz has dulled somewhat in the last 12
months, levelling out at more of a distant hum. For those who want
to put a figure on it, Google Trends suggests global interest in
the search term “metaverse” has fallen by close to 90 per
cent compared with its peak in early 2022.

“Progress has been slower than expected, given the
financial strength and investment of the big corporations looking
to exploit the metaverse,” acknowledges Charlie Bond, an
intellectual property lawyer based in Gowling WLG’s U.K.
offices.

But how you feel about the overall health of the metaverse
depends largely on where you live.

The crypto crisis, sparked by the collapse of the notorious FTX
exchange, also inflicted some collateral damage on the metaverse,
thanks to its close association in the minds of consumers with
Bitcoin and other blockchain-backed digital assets, such as
NFTs.

However, enthusiasm seems to be running higher in Asia, buoyed
by steady user growth of metaverse platforms and the young
tech-savvy populations of places like Singapore, Shanghai and
Hanoi.

In South Korea, the national government has leaned into the
country’s reputation as a cultural and gaming pioneer, making a
$200-million investment in metaverse technology the centrepiece of
its “Digital New Deal.” Meanwhile, at the municipal
level, the Seoul Metropolitan Government has begun offering public
services in the metaverse via its virtual City Hall.

The spotty nature of the metaverse’s development comes as no
surprise. Unresolved core issues, such as the high price and
variable quality of its required technology, as well as the siloed
nature of metaverse platforms, have all served as barriers to more
explosive growth.

The metaverse in its truest form is a seamless single platform
where you can explore anything from games, to shopping to any
number of other pastimes and experiences. Some companies have
teamed together to make their “mini” metaverses work in
harmony, but it will be a long time before all the interested
parties reach an agreement on how every “mini” metaverse
can be combined into this envisioned single platform.

2. Hold on, how many metaverses are there?

Opinion is divided on the exact number, but there is no single
metaverse – at least not yet.

In the meantime, 3D virtual worlds Decentraland and The Sandbox
remain the standard bearers for the metaversal experience, as
places where hundreds of thousands of monthly users can buy land,
develop property and interact with friends virtually.

Gaming platforms such as Roblox and Fortnite or social media
apps like Zepeto also stake a claim as major hubs. However, their
metaversal qualities are more tangential to their core offerings,
even if their user bases are of another order of magnitude
altogether – counted in the millions.

More broadly, industry observers are increasingly coalescing
around three distinct groups for the categorization of metaverse
activities:

• The Consumer Metaverse encompasses what you
  might call the “classic” view of the metaverse, with
  avatars of real people shopping, socializing and playing games
  together.




• The focus of the Enterprise Metaverse is on
  companies’ use of virtual and augmented reality tools as part
  of their business, including virtual meetings and simulations of
  real-world interactions for training purposes.




• A key feature of the Industrial Metaverse is
  the Digital Twin, a virtual copy of a physical space that serves as
  a testing ground for new technology, designs and processes. For
  example, a company may use a Digital Twin to envision how a new
  factory might function in reality, while a city could use one to
  trial changes to traffic flow or anticipate maintenance needs.

“While much attention to date has been focused on
consumers, the metaverse promises to be a game-changer for
businesses across all sectors,” says Monique Couture, a lawyer
in Gowling WLG’s Ottawa office. “From cost-effective
approaches to research and development to bold new opportunities
for cross-border collaboration, brand building and product testing
– the possibilities are endless.”

3. Are brands still coming to the metaverse?

An ever-growing collection of businesses are leaping into the
metaverse in search of fresh connections with new customers and
deeper bonds with existing ones.

“More and more, companies are exploring consumer engagement
strategies that shed the physical constraints of the real world and
harness the tremendous brand-building potential of virtual
environments,” say Harleen Khanijoun, a lawyer, patent and
trademark agent based in Gowling WLG’s Hamilton office.

Fashion and gaming brands continue to position themselves as
metaverse leaders. Early movers included Nike, which teamed up with
Roblox to create Nikeland, a mini-metaverse within the game for
fans of the brand’s products.

Higher-end designers like Louis Vuitton have produced their own
NFT wearables, typically available at more realistic prices than
their aspirational online followers could afford to pay for the
equivalent real-world outfits. Meanwhile, Hugo Boss and Gucci have
each experimented in the emerging “phygital” space,
blending physical and digital experiences via tagged real-life
products that can be reproduced and worn by owners’ avatars in
the metaverse.

In the last six months, Nike has supplemented its metaverse
presence with the launch of .SWOOSH, an NFT marketplace and digital
community designed as a home for virtual creations based on
Nike’s physical shoes and jerseys.

The company will also be cheering the increased metaverse
activity of some of its bigger commercial partners: sports leagues.
For example, the NBA has signed a deal to make certain games
available in Meta’s Horizon Worlds platform, promising
immersive shared watching experiences for users with virtual
reality headsets. The NFL also got in on the act during its
February showpiece, hosting its own celebratory Super Bowl concert
in Roblox, featuring hip-hop artist Saweetie.

Other more recent high-profile metaverse arrivals include Oreo,
who generated significant marketing buzz for its Oreoverse
experience, which offers a place for fans to play games and design
their own takes on the classic cookie.

4. What are the risks to my brand?

In case anyone had any doubts, the early metaverse experience
has proven that nowhere is off limits to infringers and bad faith
actors – not even virtual worlds.

Gucci and Prada were both targets of trademark applications
filed by unaffiliated parties for “downloadable virtual
goods,” including clothing, eyewear, headwear and other items
– although these were swiftly rejected by U.S. authorities.

But IP worries are not the only dangers lurking in the metaverse
that brand owners should be alive to. Concerns surrounding privacy
and cyber security, identity theft and child protection have
attracted the attention of regulatory organizations around the
world – notably Interpol, which established its own closed virtual
reality space as part of its move to explore policing and crime
investigation in the metaverse.

The European Commission is also in the midst of a public
consultation in its quest to develop a vision for the metaverse
“based on respect for digital rights” and European Union
laws and values. In the short term, Charlie Bond says the onus will
be on brand owners to look out for themselves.

Gowling WLG lawyers agree: legislative change is necessary but
will no doubt be very slow, lagging behind the development of the
metaverse itself – just as it did when the internet was invented.
But that makes it all the more important that brand owners take
steps now to ensure they are protecting their rights within
existing legislative frameworks applicable to the metaverse.

Plenty of businesses are subscribing to the
“you-snooze-you-lose” school of metaverse trademarking,
with brands as diverse as Playboy and Yves Saint Laurent all taking
advantage of updates in the most recent edition of the Nice
Classification, which added an explicit reference in Class 9 to
“downloadable digital files authenticated” by NFTs.

Recent developments in U.S. courts also delivered some good news
to brand owners, suggesting that old-school enforcement methods
will still have some teeth in the new-fangled world of the
metaverse.

In early 2023, a New York jury ordered an American artist to pay
$130,000 in damages after finding his range of unauthorized “MetaBirkin” NFTs infringed on
trademarks held by Hermès, the maker of the real-world
Birkin bags. In the process, the jury dismissed the artist’s
claim for First Amendment protection, while the damages included a
$23,000 award for cybersquatting related to his registration of the
MetaBrikins.com web domain.

5. What will happen next?

In its young life, the metaverse has already made fools of the
numerous self-appointed oracles heralding either its impending
domination of the online world – or its imminent doom.

So far, the most consistent quality of the metaverse has been
its ability to develop in unexpected and unpredictable ways. Some
of the uncertainty that this creates for brand owners will subside
naturally over time, as trademark applications continue to work
their way through the system in various jurisdictions and courts
build a more solid foundation of metaverse-related
jurisprudence.

Overall, metaverse development may remain slow and steady in the
near future, but all could change very quickly if major players are
able to make progress on the big issues of technological
affordability and interoperability across platforms.

Imagine, if a company can create a platform that is taken up by
consumers as being “the” platform for the metaverse. This
could very likely speed up development as it will force other
organisations to work together and incorporate themselves into that
platform.

You may even test the water and get started, with a guest
account. But before you dive in, get expert commentary or
advice.

“Whatever the future of the metaverse holds, the one thing
you can be sure of it will be overarching across industries and
legal areas,” comments Vincent Tan, a corporate lawyer working in the
offices of JurisAsia LLC, with whom Gowling WLG has an exclusive
association.

Explore our thought leadership designed to help you stay
up to date, like the cross-practice view on the developments in the
last 12 months.

Read the original article on GowlingWLG.com

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guide to the subject matter. Specialist advice should be sought
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