Brand licensing and The Metaverse

Liam Peters, Chartered Trademark Attorney at Wynne -Jones, delves deep into the world of Brand Licensing and the Metaverse.

Brand Licensing & the Metaverse: The Opportunity and Risk

The metaverse has opened up a world, full of both opportunity and risk. It is not, however, a new world, but one that’s already being explored by curious brand owners. Just last year, super brand Nike teamed up with gaming platform Roblox to create Nikeland - a virtual world in which they could increase brand awareness and access new channels to sell their wares. Avatars could kit themselves out in Nike apparel and compete in virtual games. According to Nike, Nikeland was accessed by more than 6.7 million people worldwide. While brand giant Nike may have transitioned into the metaverse without any ill-effect, there is a word of warning for brand owners, licensors and licensees wishing to follow them… Developments in technology often create risks for brand owners, and the metaverse will be no exception. In a similar way to the development of online marketplaces, the metaverse will provide a new means though which rights can be infringed. Unscrupulous people and businesses could set up shop in this new world selling counterfeit virtual goods for their own gain. Avatars could be walking the streets in worlds such as Second Life, wearing goods that have been sold to them without permission from the IP owner. We know that this type of thing can be a difficult battle in the real-world and the virtual world of the metaverse creates more questions, some of which are yet to be tested and it may take some time before we see the full extent. It is even more important now though, to make sure your IP provides protection in both worlds. Trademarks provide the ability to stop unauthorised use, but a mark protected across Europe may not prevent it being used by a business in China for virtual goods, and sold to an avatar operating in the metaverse from the United States. Under the current law, the European marks could only be used to stop unauthorised use targeted at consumers in Europe. These are things IP owners should now be thinking about. Existing trademark protection may be robust enough for goods and services in the real world, but it’s possible that it won’t prove as tough in the metaverse which is why brand owners are looking to future proof their IP. Nike were savvy enough to obtain new trademarks for the Nike name, the swoosh logo and the name Nikeland that specifically covered virtual goods and services. Likewise in licensing, thought should be given to the terms of any license agreement: does the licensee have rights to operate in the metaverse or only the real world? When Nike teamed up with Roblox, Nike’s trademark protection ensured that Roblox required a license to use the brand within the platform and the agreement resulted in a significant win for both companies. As the metaverse continues to grow and develop, it’s important that brand owners be proactive in ensuring their portfolio is adequately protected and that they monitor the metaverse for unauthorised use. This approach will allow for early identification of infringement and help to minimise long term damage. Businesses can develop this capability internally, or it can be outsourced. The metaverse is exciting, but it’s also risky… so expert advice on whether your IP is geared up for this brave new world is essential!

“Developments in technology often create risks for brand owners, and the metaverse will be no exception...”