The Wild West of Metaverse Trademarks

Talking about the Metaverse is like having a discussion about what “the internet” is in the 1970s or what “the cloud” is in the early 2000s. So what exactly is the Metaverse and what is all the hype about? Simply put, the Metaverse is a new iteration of the internet where you can completely immerse yourself in a three-dimensional digital world that parallels our physical world with the help of virtual reality (VR) and augmented reality (AR) technologies. Picture a world with land, houses, offices, people, animals, stores, businesses, concerts, sports games and everything else imaginable – but virtual. Essentially, it will be a full replication of our physical world where people can create, work and interact with each other using their respective avatars all from the comfort of their homes.

While the Metaverse is still in the early stages, it is clear that the Metaverse will have serious implications on e-commerce. For example, your avatar can go to a virtual mall, try on clothes from real designers with the help of virtual try-on software and purchase both digital and real-world clothing. If you get hungry during your Metaverse shopping trip, you can go to a virtual McDonald’s and order a real life Big Mac to be delivered to your front door (yes, your real front door) without putting down your headset.

With that in mind, companies are preparing for life in the Metaverse and, in particular, they are updating their trademark registrations by filing intent-to-use applications for use of their marks in the digital world.

Recently, Hermes sued a digital artist, Mason Rothschild, for creating a MetaBirkin non-fungible token (NFT), which is a knock-off of the famous Hermes Birkin bag[1]. The MetaBirkin is a fuzzy image of the Hermes Birkin bag and the artist was attempting to sell his images on various internet sites using MetaBirkin as a brand name. Hermes is claiming this is trademark infringement, trademark dilution and cybersquatting to name a few, which raises a host of intellectual property questions with respect to the Metaverse. For one, Hermes’ trademarks are for leather goods and the NFTs that are being sold are objectively not leather goods. Generally speaking, trademarks only apply to the goods and services listed on the registrations and those that are reasonably related to the listed goods or services. To succeed on a trademark infringement claim, Hermes will need to prove that the artist’s conduct leads to a likelihood of consumer confusion. It will be interesting to see how the court resolves these issues. However, in the meantime, this case teaches us that companies should preemptively protect their intellectual property rights in the digital world before someone effortlessly encroaches upon them.

It seems many brands have already caught on as the U.S. Patent and Trademark Office (“USPTO”) has seen a large uptick in virtual goods trademark applications.

Nike has filed seven different intent-to-use trademark applications[2] for “Nike,” “Just Do It,” “Jordan,” “Air Jordan,” the Nike swoosh logo, the Jordan silhouette logo and a combination of the Nike name and swoosh logo. Nike intends to use its marks on “downloadable virtual goods” (class 9), “retail store services featuring virtual goods” (class 35) and “entertainment services, namely, providing on-line, non-downloadable virtual footwear, clothing, headwear, eyewear, bags…for use in virtual environments” (class 41).

Rapper Shawn Corey Carter, also known as Jay-Z, filed an application[3] for his name “Jay-Z” covering non-fungible token-based goods, namely music, clothing, jewelry, eyewear, bags, toys, fragrances and sports equipment for use online and in virtual worlds.

Similarly, Kobe Bryant’s estate has filed three trademark applications[4] for the terms “Kobe Bryant,” “Mamba Forever,” and “Mambacita” to be used for virtual and digital goods such as art, avatars and collectible coins for use online and in virtual worlds.

There have also been instances of trademark applications filed by parties other than the brands themselves as any third-party digital creator could easily register a trademark and create a virtual version of a brand. For example, applications for Prada and Gucci work marks and logos have been filed with the USPTO for use in the digital world (classes 9, 35 and 41) by parties other than the brands themselves. It is worth noting that in the U.S., trademarks are awarded based on actual use of the mark and Gucci has already partnered with Roblox, an online game platform, to put its logo on a virtual experience and corresponding goods. By already using their trademark in these three classes, Gucci’s rights would trump any rights claimed by unaffiliated third parties.

All that being said, these rogue applications shed light on the issues that brands will inevitably face in the new digital world. I would advise companies to be proactive in their approach to intellectual property protection if they plan to participate in this ever-expanding virtual marketplace.

This article is intended as a general discussion of these issues only and is not to be considered legal advice or relied upon. For more information, please contact RPJ Associate Ylana Stumer Hersh who counsels clients in areas of corporate, corporate finance, entertainment and intellectual property law. Ms. Hersh is admitted to practice law in New York.

 

 

 

[1] Hermes International v. Rothschild, Case No. 22-cv-00384

[2] serial nos. 97095855, 97095944, 97096945, 97096236, 97096950, 97096952, 97096366

[3] serial no. 97118679

[4] serial nos. 97244916, 97244877, 97244917