Current legal rules are sometimes ineffective in this new digital world we call the metaverse

On May 16th, the International Trademark Association (INTA) issued a resolution on intellectual property rights in New Digital Ecosystems (NDEs). Catherine Mateu, Chair of INTA’s Emerging Issues Committee, decodes for us the ins-and-outs of this new environment.

Posted mercredi, juin 14 2023
Current legal rules are sometimes ineffective in this new digital world we call the metaverse

On May 16th, the INTA issued a resolution on intellectual property rights in New Digital Ecosystems (NDEs). Catherine Mateu, Chair of INTA’s Emerging Issues Committee, decodes for us the ins-and-outs of this new environment.

LEADERS LEAGUE: Which section of the public is concerned by new revolution?

Catherine Mateu: The younger ge­nerations, our bankers, our gallery owners, everybody can be immerged in the metaverse, the digital world ima­gined by author Neal Stephenson in 1992 in his science-fiction work Snow Crash, which has come to life. NFTs (Non-Fungible Tokens), Blockchain and crypto-currency are terms the ge­neral public are already used to hea­ring. These new developments, which attract a wide audience of users, consu­mers and businesses, revolve around major brands nowadays.

What is the basis of the New Digital Ecosystems resolution?

The resolution on intellectual proper­ty rights in New Digital Ecosystems is based on INTA’s work on NFTs and me­taverse, including its white papers en­titled: NFTs - Non-Fungible Tokens and Trademarks in the Metaverse, produced by its Emerging Issues Committee in collaboration with many other INTA Committees, and widely distributed to public authorities around the world and to people interested in trademark law and new technologies.

What does the new resolution, adopted by INTA’s Board of Directors on May 16th, stipulate?

The resolution adopted unanimously by the INTA Board of Directors on May 16th, 2023, sets out five cardinal points, namely:

1 . Recognition of the possibility of the existence, exercise and infringe­ment of intellectual property rights in NDEs,

2 . Application of international laws and treaties, regional laws, national laws and self-regulation regarding the recognition and enforcement of intellectual property rights in NDEs, as well as their revision and development,

3 . Enforcement of some or all of the ap­plicable intellectual property rights in NDEs to the extent that the exis­ting or exercised intellectual proper­ty is protected by more than one type of intellectual property right, and this at the discretion of the intellec­tual property rights holder,

4 . Developing a harmonized approach between jurisdictions as far as pos­sible for the recognition and enfor­cement of each type of intellectual property, recognizing the territo­rial limits of intellectual property rights, but also taking into account the global accessibility of these eco­systems,

5 . And finally, encouraging stakehol­ders to develop and implement tools and options for the protection and enforcement of intellectual pro­perty rights in NDEs.

In its two aforementioned reports, you said that INTA raised a number of legal questions. What are they?

Yes, such as: What are the specific is­sues raised by trademark law and NFTs in the metaverse? What challenges does the metaverse pose in this respect? Are the legal rules established in the physi­cal world applicable in the virtual wor­ld? Do we need a lex specialist for NFTs and trademark law in the metaverse?

Although the metaverse still lacks a universal definition, it is generally perceived as a 3D, immersive and per­sistent virtual reality universe, which also raises questions of interoperability and contract law, and which may be based on a decentralized web. NFTs are non-interchangeable digital assets that can represent the ownership of unique digital assets (such as photographs or videos), tangible assets (tickets, contracts) or representative assets (lin­ked to collectibles, unique products).

It is undeniable that the metaverse has initially gained momentum with the in­troduction of new elements, including NFTs, which are trying to integrate themselves into the current legal lands­cape.

In its reports, INTA points out how the sudden and massive growth of these virtual reality universes, as well as of NFTs, has prompted the legal and intellectual property communities to seek answers to questions specific to the NDEs environment. As the constant evolution of NFTs and decentralized communities is difficult to control, current legal rules are sometimes inef­fective in this new digital world. Intel­lectual property law also needs to be protected and strengthened in these new environments, sometimes by har­monizing laws and jurisdictional ap­proaches in this emerging digital space.

From trademark registration to in­fringement, which challenges do the metaverse and NFTs pose?

INTA has pointed out a number of una­voidable challenges in its aforemen­tioned white papers, which point out the questions regarding the advisability of new trademark registrations invol­ving the metaverse and NFTs, as well as the use of existing classes including classes 9, 35, 41 and 42 to protect di­gital services, and the value of having a 46th class in the Nice classification for virtual products and services.

There are also questions about the na­tural diversification of tangible pro­ducts and services into virtual media such as metaverses and NFTs. Similar­ly, the legal qualification of the use of trademarks linked to the metaverse and NFTs may be subject to questioning, both as rights-generating use, to de­feat claims for lapse for lack of exploi­tation, or to acquire trademark rights as a result of its use, and as use that may constitute acts of infringement. Such questions are amplified by the diversity of the platforms on which such use takes place, and by their territorial attachments, given that the medium on which such use takes place may be that of a decentralized web. As a result, the usual concepts of attachment, such as habitual residence or domicile, are li­kely to prove inoperative.

Such digital environments call for an adaptation of the contractual practices of the intellectual property rights invol­ved in these NDEs, and an assessment of the distribution networks due to the ac­tions of the owners themselves, partners, consumers or even third parties.

These white papers conclude by highligh­ting the need to pursue awareness-raising efforts to help build a legal framework for these NDEs. The resolution INTA has just adopted is a first step in this direction.

Interview with CATHERINE MATEU Chair of the Emerging Issues Committee, INTA & Partner (France) ARMENGAUD GUERLAIN