Imagine, jumping off from the peak of Mt. Everest with a paraglider and landing on Miami’s beach or just sipping a coffee while walking in a park with your friend from across the globe. This is what Metaverse means. Metaverse is the virtual reality space that allows the users to play, socialize and work in online shared digital spaces. It is everywhere at the moment and is still an evolving concept. The recent rebranding of Facebook to “Meta” has given a lot of buzz to the brands in the metaverse. This shows brands are edging closer to the metaverse vision the brand has been moving towards. But what should brands do to protect their marks in this evolving space of metaverse?

This new environment is continuously posing new challenges and opportunities for brands as they are actively engaging in developing equipment and software like AR and VR devices, and applications related to non-fungible tokens (NFTs).

A number of recent instances of branding and trademark issues are already in discussion in the virtual space. A simple search at USPTO will show a significant rise in the number of trademark applications in the domain of virtual clothing and accessories, downloadable virtual goods, and virtual currency, as well as in relation to services to be provided in the virtual sphere. Some well-known brands such as McDonald’s, Nike, Walmart, Crocs, and Skechers, have been showing their promptness to register trademarks for their Metaverse offerings. 

Brands that are moving their business model to develop products and applications in the virtual sphere, should also consider a proactive approach for their trademark and IP protection. As more businesses move to this sphere, more and more fraudulent use of trademarks is likely to keep increasing. Companies who are already operating in this space or who are planning to operate in this sphere should anticipate the potential frauds and risks by protecting their IP rights. As mentioned previously, it is an evolving field and it is difficult to determine how and what risks will unfold in the metaverse.

The first major instance and action was taken by a brand against the unauthorized use of its trademarks in the virtual world are Hermès International, a French Fashion House. It has filed a lawsuit against Mason Rothschild for trademark infringement following the release of a collection of 100 NFT Birkin bags covered in faux fur in a range of colours and designs named- MetaBirkins. Defendant Rothschild created and sold NFTs on various platforms under the name “MetaBirkins”. He also marketed these NFTs across social media platforms under various MetaBirkins accounts’ names and hashtags. These NFTs did very well, allegedly garnering Rothschild profits in the seven figures. Hermes sued Rothschild for trademark infringement and cybersquatting. Rothschild filed a motion to dismiss the complaint stating that there is no actual legal case against him. This motion was rejected by the Judge which infers that Hermes has a legal case and a claim for which relief can be granted. This case can be a look forward and may dictate the future of NFTs. This dismissal is basically trying to balance the artist’s expression in the virtual world.

Another instance in this evolving space can be Zepeto, in March 2022, it announced that it has exceeded a user base of 300 million since the platform launched in 2018. It is a 3-D avatar app where users can sell and design digital clothing and fashion accessories for their avatar. Even luxury brands like Ralph Lauren and Gucci are taking part with their digital clothing already for sale and featured on avatars on Zepeto.

Another instance can be Nike which recently made headlines by filing trademark applications with the US Patent and Trademark Office for such goods and services for many of its iconic brands like NIKE, JUST DO IT, and its AIR JORDAN logo.