Brand Protection in the metaverse

Friday 29 July 2022

What is the Metaverse?

The metaverse is a concept of a persistent, online, 3D universe that combines multiple different virtual spaces. You can think of it as a future iteration of the internet. The metaverse will allow users to work, meet, game, and socialize together in these 3D spaces. The metaverse is driven by augmented reality, with each user controlling a character or avatar. For example, you might take a mixed reality meeting with an Oculus VR headset in your virtual office, finish work and relax in a blockchain-based game, and then manage your crypto portfolio and finances all inside the metaverse.

Metaverse Projects

Metaverse projects run on a blockchain, so multiple metaverse’s can be on the same blockchain.  For example, Decentraland, Sandbox and Starlink run on the Ethereum blockchain.  In the future we could see Avatars freely move between metaverse projects.  This is called metaverse interoperability where people (or their Avatars) can freely move from one Metaverse project to another and explore different infrastructures just like humans do in the real world.   But the token, technical and economic alignment will unlikely see this happen for several years. Some of the more popular Metaverse projects include: Decentraland Decentraland is an online, digital world that combines social elements with cryptocurrencies, NFTs, and virtual real estate. On top of this, players also take an active role in the governance of the platform. Like other blockchain games, NFTs are used to represent cosmetic collectibles. They’re also used for LAND, 16×16 meter land parcels that users can purchase in the game with the cryptocurrency MANA. The combination of all of these creates a complex crypto-economy. Blockchain domains can also be used in Decentraland. Meta Horizons (Facebook) When Facebook founder Mark Zuckerberg renamed his company to Meta, it was a sign of how important he felt the metaverse concept would be to the future of digital communications, socializing, and living. So far, the result has been several projects, including Horizon Worlds (a virtual worlds platform), Horizon Venues (events platform), and Horizon Workrooms (virtual office). All of these platforms are interconnected and allow users to create avatars that represent them as they explore and interact with other users. One interesting aspect that arises from the existence of Horizon is that it forces us to confront questions about whether we want a metaverse where ownership is centralized under a corporate owner or a more distributed, decentralized model of ownership and governance. Fortnite Fortnite is, of course, primarily known as one of the most successful online games ever created. But creators Epic Games quickly came to understand that once they had brought millions of switched-on, tech-savvy gamers together on their platform, it potentially became something more game-changing. Two main strands that are being followed in order to turn the world of Fortnite into a proper metaverse are live music concerts from global superstars such as Travis Scott, Ariana Grande, and Billie Eilish. Brands including Telco 02, broadcaster ITV and supermarket Carrefour have all used the creative mode to take their first steps into the metaverse. Roblox Roblox is a gaming platform used daily by more than 50 million users. It lets anyone create and even monetize their own game worlds, which all exist within an interconnected metaverse and share aspects like avatars and currency. Skewed at a younger audience than some of the other platforms mentioned here, companies including Nike, Forever 21, Gucci, Nascar, Ralph Lauren, and Vans have all used the platform to set up virtual worlds where users can interact with their brands. While anyone can create their own game within Roblox, it’s designed, so they will all have a similar look and feel, meaning that once a player has logged in and experienced one of them, they will feel comfortable in any of them. The Sandbox This started out as a mobile game, which in 2018 was ported by its creators to the Ethereum blockchain, becoming one of the first truly decentralized metaverse platforms. It includes its own object creation tools that allow anyone to build 3D items, characters, vehicles, or anything else they can think of, which are then minted as NFTs, and can be imported into other Sandbox worlds. These NFTs can also be traded and sold via the platform’s built-in marketplace. Assets and land are created as NFTs, and like Decentraland, transactions are carried out in the platform’s own currency, known as SAND. Sandbox is another platform that has proven popular with brands wanting to establish their metaverse presence – landowners include HSBC, Warner Music, PwC, and Paris Hilton.

Corsearch: Metaverse Brand Protection Challenges

The metaverse is moving at an accelerated pace While the metaverse and some of its technologies have been around for decades, the recent socioeconomic changes (e.g., tech-savvy Gen-Z workforce and COVID-19) and the advances in new technologies (e.g. investment in and transition to Web3 by tech giants) led to the accelerated pace of metaverse adoption. While we’ve seen an explosion in metaverse businesses in recent years, its full potential has yet to be observed. Brands have little time to adjust to the new technologies and the range of potentially emerging IP issues could be hard to predict. The metaverse is a Wild West behind the walls of different businesses While a “true” metaverse is based on the decentralization principle, the reality of today is that the platforms through which we experience the metaverse (e.g. Roblox, Opensea, etc.) exercise control over the use of their platform. Brands need to navigate different technological landscapes and may have very limited visibility over the brand’s IP misuse in many very different businesses. Case law is yet to be produced that would give clarity over IP use in the metaverse IP use in the metaverse is complex and brands have little recourse but to turn to the courts. Brands and IP owners are closely watching the development of StockX and MetaBirkins lawsuits that may lay the foundation of IP law in the metaverse. The StockX lawsuit may set a legal precedent regarding what kinds of NFTs can be created, while MetaBirkins may clarify how trademark law will be applied to NFTs. Metaverse platforms have yet to establish effective prevention and enforcement practices Metaverse platforms acknowledge that they observe issues of impersonation, scams, IP, and other types of brand abuse. Most platforms remove the bad content from their platform upon the request of the brand and IP owners. However, the majority of metaverse platforms have yet to establish IP enforcement protocols or implement effective preventative measures. There are some exceptions. Roblox, for example, is reportedly working on its own in-platform anti-counterfeiting detection system to help tackle counterfeit items on the platform.[4] And while OpenSea’s IP enforcement protocols aren’t always clear, Corsearch has a good relationship with the platform meaning infringement notices are actioned within just hours[5]. The volume of issues Alex Atallah, the co-founder of Opensea, recently tweeted that “There are now more NFTs on OpenSea than there were websites on the internet in 2010”[6]. The pure volume of issues makes manual efforts to address the risks nearly impossible.

Corsearch: what can brands do to protect themselves?

What Can Brands Do Today? The burden of protecting their IP and leveraging the power of the metaverse for their business falls on brand leaders and their legal and brand protection teams today. Corsearch is working with our customer community to develop metaverse brand protection strategies and solutions that could be effective today: Consider putting together an internal metaverse-focused task force responsible for keeping up with the fast-moving Metaverse technologies and involve your legal and brand protection teams. Consider your brand’s metaverse strategy. Establishing an early presence in the metaverse allows for the establishment of genuine brand recognition among metaverse users. For example, creating an official NFT collection allows users to trace NFTs to their original owners. An IP audit may highlight vulnerable IP areas that may benefit from the additionally registered classes that protect your brand in the digital space (e.g. classes 9, 35, and 41). Secure strategic partnerships and relationships with metaverse platforms. Metaverse platforms don’t always prioritize 3rd party IP issues while developing their businesses. The brands must educate the platforms about the issues they are facing and collaborate on possible solutions. Work with a forward-thinking brand protection provider with the solution that allows you to identify, prioritize and enforce issues in the metaverse. Sources: https://corsearch.com/knowledge-base/articles/brand-protection-the-metaverse/ https://www.forbes.com/sites/bernardmarr/2022/05/16/the-10-best-examples-of-the-metaverse-everyone-should-know-about/?sh=1414bc453f5f https://twitter.com/hc_capital/status/1432723309498667017/photo/1

About brandsec

brandsec is an Australian partner of Corsearch and is a corporate domain name management and brand protection company that looks after many of Australia, New Zealand and Asia’s top publicly listed brands.  We provide monitoring and enforcement services, DNS, SSL Management, domain name brokerage and dispute management and brand security consultation services.