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1、1 INTA|TRADEMARKS IN THE METAVERSEA REPORT FROM INTAApril 2023Copyright 2023 International Trademark Association.All rights reserved.No part of this publication may be reproduced,distributed,or transmitted in any form or by any means,including photocopying,recording,or other electronic or mechanical
2、 methods,without prior written permission of the copyright owner,except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.INTA|TRADEMARKS IN THE METAVERSEWHITE PAPER TRADEMARKS IN THE METAVERSEEMERGING ISSUES COMMITTEE Commit
3、tee Chair:Catherine MateuCommittee Vice Chair:Barbara PorcarioNEW EMERGING ISSUES SUBCOMMITTEE Subcommittee Chair:Luis Fernando Bermejo Subcommittee Members:Luis Fernando Bermejo,Megan Martin,Kate Swaine,Daniel Scales,Mara Mondolfo,John Halski,Jorge Espinosa,Antonio Turco,Miguel Souto,Mary Stottele,
4、Nikita Lakhani,Orealuwa FatimilehinApril 2023 INTA|TRADEMARKS IN THE METAVERSEAcknowledgements This white paper was produced by the New Emerging Issues Subcommittee in cross collaboration with the Anti-counterfeiting,Commercialization of Brands,Copyright,Designs,Famous and Well-Known Marks,Harmoniza
5、tion,In-House Counsel,Internet,Legislation and Regulation,Trademark Offices Practices and the Unfair Competition committees.Special thanks to all the members of these committees that provided input and aided in the drafting of this white paper,including but not limited to:Melisa Berger,Mark Biernack
6、i,Valerie Brennan,Peter Brody,Margret Caruso,Dasha Chestukhin,Jennifer Gruber,Kerstin Grndig-Schenelle,Karla Hughes,Carrie Johnson,Kasey Boucher,Anne Marie Longobucco,Fernanda Magalhaes,Mike Maoz,Madhu Rewari,Erick Osterberg,Ian Raisbeck,Sarah Robertson,Maria Luisa Santamaria,Ivan Sempere,Jamie Ster
7、nberg,and Claudette Vernot.In addition,special recognition is warranted for the staff liaisons that aided with input,drafting,and review of the white paper,including but not limited to:Kensey Cybul,Iris Gnther,Sheila Francis,Jos Luis Londoo,Bruce Macpherson(Chief Policy Officer),Christina Mitropoulo
8、s,Helena Rother,Lori Schulman,Jennifer Simmons,and Erica Vaccarello.All information in this White Paper is provided to the public by the International Trademark Association as a source of general information on the metaverse in relation to trademarks and other related intellectual property issues.In
9、 legal matters,no publication,whether in written or electronic form,can take the place of professional advice given with full knowledge of the specific circumstances of each case and proficiency in the laws of the relevant country.While efforts have been made to ensure the accuracy of the informatio
10、n in this document,it should not be treated as the basis for formulating legal or business decisions without professional advice.We emphasize that trademark rights and related intellectu-al property laws vary from country to country,and between jurisdictions within some countries.The information inc
11、luded in this document will not be relevant or accurate for all countries or states.DisclaimerEXECUTIVE SUMMARY 10INTRODUCTION 121 METAVERSE:DEFINITION AND STATE OF THE ART 121.1 DOES THE METAVERSE EXIST TODAY?141.2 THE IMPORTANCE OF THE TERMS OF SERVICE 141.3 WHAT WILL YOU LIKELY BE ABLE TO DO IN T
12、HE METAVERSE TOMORROW?141.4 BLOCKCHAIN DOMAINS 151.5 INTERACTION OF BRANDS IN THE METAVERSE 161.6 PERSONHOOD IN THE METAVERSE 162 TRADEMARKS IN THE METAVERSE:TRADEMARK APPLICATION AND REGISTRATION ISSUES 172.1 ARE VIRTUAL GOODS IN THE NATURAL ZONE OF EXPANSION OF THEIR PHYSICAL COUNTERPARTS?172.2 TR
13、ADEMARK APPLICATIONS COVERING THE METAVERSE 192.3 WHERE TO FILE APPLICATIONS 192.4 CLASS COVERAGE:DOES THE CURRENT NICE CLASSIFICATION SYSTEM WORK?203 USE OF TRADEMARKS IN THE METAVERSE 233.1 HOW DO TRADEMARK OFFICES CURRENTLY UNDERSTAND TRADEMARK USE FOR METAVERSE-RELATED GOODS AND SERVICES?243.2 H
14、OW DOES TRADEMARK USE IN THE METAVERSE DIFFER FROM TRADEMARK USE IN THE PHYSICAL WORLD?263.3 TRADEMARK PRESENTATION ACROSS PLATFORMS IN THE METAVERSE 263.4 ASSOCIATION OR FIXATION OF TRADEMARKS WITH VIRTUAL GOODS AND SERVICES 273.5 RELATIONSHIP BETWEEN VIRTUAL GOODS AND SERVICES AND PHYSICAL WORLD C
15、OUNTERPARTS 283.6 HOW WILL TRADEMARK USE IN THE METAVERSE ALIGN WITH THE GEOGRAPHIC NATURE OF TRADEMARK RIGHTS?293.7 WHAT WILL TRADEMARK ABANDONMENT LOOK LIKE IN THE METAVERSE?303.8 FURTHER CONSIDERATIONS REGARDING TRADEMARK USE IN THE METAVERSE 31Contents4 TRADEMARK LICENSES 324.1 LICENSED GOODS AN
16、D SERVICES 334.2 TERRITORIES 334.3 EXISTING LICENSEES 334.4 CHANNELS OF TRADE 344.5 THE LICENSED MARK 344.6 QUALITY CONTROL/TECHNOLOGICAL CONTROLS 344.7 GOVERNING LAW AND FORUM 344.8 ENFORCEMENT 354.9 ADDITIONAL CONSIDERATIONS 355 INFRINGEMENT IN THE METAVERSE 355.1 JURISDICTION 375.2 UNITED STATES
17、385.3 EUROPEAN UNION AND THE UNITED KINGDOM 395.4 CHINA 425.5 INDIA 425.6 BRAZIL 445.7 DIFFICULTIES ESTABLISHING JURISDICTION 445.8 CAUSES OF ACTION 455.8.1 TRADEMARK INFRINGEMENT 455.8.2 ANTICOUNTERFEITING 495.8.3 TRADE DRESS/PASSING OFF AND UNFAIR COMPETITION 505.8.4 DESIGN RIGHTS 505.9 PRACTICAL
18、ENFORCEMENT CONSIDERATIONS 516 MULTIJURISDICTIONAL ENFORCEMENT INITIATIVES RELATED TO THE INTERNET MAY BE APPLICABLE TO THE METAVERSE 516.1 ESTABLISHED INTERNET ENFORCEMENT REGULATIONS 526.2 INTERNET AND METAVERSE-RELATED ENFORCEMENT FORUM AND INITIATIVES 547 ADDITIONAL CONSIDERATIONS ON DISPUTE RES
19、OLUTION IN THE METAVERSE 567.1 FORMATION AND VALIDITY OF FORUM SELECTION CLAUSES AND ARBITRATION AGREEMENTS IN THE METAVERSE 567.2 TYPES OF DISPUTES POSSIBLE AND ISSUES THAT MIGHT ARISE 577.2.1 DISPUTES AGAINST METAVERSE PLATFORMS 577.2.2 DISPUTES AMONG METAVERSE USERS 578 WHERE DO WE GO FROM HERE?I
20、SSUES FOR FURTHER CONSIDERATION AND POSSIBLE ADVOCACY BY INTA 588.1 THE NICE CLASSIFICATION SYSTEM 588.2 ZONE OF EXPANSION 588.3 METAVERSE BORDERS 598.4 LICENSING IP IN THE METAVERSE 598.5 MODIFICATION OF COVERAGE OF EXISTING REGISTERED RIGHTS 598.6 HARMONIZATION ON WHAT CONSTITUTES TRADEMARK USE 60
21、8.7 JURISDICTION AND ENFORCEMENT ISSUES 608.8 INTA INVOLVEMENT 60Table of AbbreviationsAbbreviationMeaningCJEUCourt of Justice of the European UnionDMCADigital Millennium Copyright Act 1998DNSDomain Name SystemEUIPOEuropean Union Intellectual Property OfficeEUTMEuropean Union TrademarksGDPREuropean
22、Union General Data Protection RegulationICANNInternet Corporation for Assigned Name and NumbersIPintellectual propertyNFTnon-fungible tokenNGOnon-governmental organizationRCDRegistered Community DesignREUTRegulation(EU)2017/1001 of the European Parliament TMtrademarkUDRPUniform Domain Name Dispute R
23、esolution PolicyWIPOWorld Intellectual Property Organization10 INTA|TRADEMARKS IN THE METAVERSEExecutive Summary The introduction of the Internet in many ways upended the lifestyle of people around the world.It forever changed the way people communicated and expressed themselves,made information of
24、all sorts readily available to anyone who searched for it,and changed the way people do business.It would be impossible to fathom modern life without the use of the Internet or without the existence of social media.The Internet is now evolving into a three-dimensional(3D)experience in which people w
25、ill be im-mersed into a whole different reality,where there will be no“borders”because platforms will be interoperable.This will certainly bring positive developments,but it will also bring about challenges to the legal landscape including new avenues for nefarious activity of all kinds.As occurred
26、in the 1990s and early 2000s,lawmakers,policy makers and the IP community must consider how this burgeoning new reality could impinge on trademark owners rights and how to address the challeng-es it will bring about.In this white paper,we provide an introduction to the metaverse and address the dive
27、rse challenges that its development will cause for brand owners.We identify the pitfalls that practitioners should be aware of,as well as the possible pathways of research and advocacy that INTA might undertake to shape the future legal environment of the metaverse.These,in essence,are the following
28、:There is a need to harmonize classification of trademarks for metaverse activity and digital as-sets.The current approach of the USPTO and EUIPO of establishing Classes 9,35,41,and 42 as the main Nice Classes to protect virtual goods/services should be taken into account when crafting filing strate
29、gies.However,some stakeholders appear to be in favor of establishing a new Nice Class 46 for digital goods and services,while even others have argued for virtual goods to be registered under the same classes as their non-virtual or physical good counter-part.These possible solutions,among others,sho
30、uld be studied by INTA committees to iden-tify and establish the proper approach so that INTA can advocate on behalf of brand owners.Trademark owners have no certainty that under a traditional zone of expansion analysis,a court would find that virtual goods are in the natural zone of expansion of th
31、eir physi-cal world counterparts.Further research and advocacy might be warranted to estab-lish guidelines for courts and tribunals to exercise flexibility when tasked with deter-mining whether owners of trademarks for physical goods can enforce their rights in the metaverse without additional regis
32、tration or use of a mark that is specific to the metaverse.INTA should take a stance on how use of a trademark in the metaverse should be as-sessed.Since national trademark laws and offices already take diverse views of trademark use for the purposes of trademark registration,renewals,and enforcemen
33、t,INTA should consider how it might advocate for better international alignment so that there are com-monly understood norms of trademark use across both borders and metaverse platforms.Questions on how licensing practices should adapt to the metaverse landscape as its devel-opment evolves are ripe
34、for study.It would be beneficial for INTA to set forth best practices or educational campaigns regarding ownership,licensing,and assignment of digital assets and their underlying intellectual property rights.11 INTA|TRADEMARKS IN THE METAVERSE The legal concepts of habitual residence,domicile,place
35、of business of the parties or real estate property location,which are traditionally at the core of private international law rules,are based on geographical or territorial terms.However,the upcoming decentralization of the Internet will make these concepts less meaningful.Thus,in IP law,unique barri
36、ers to successful counterfeit detection and enforcement of trademarks,design rights,and trade dress that exist in the metaverse,including the difficulty in identifying infringers and estab-lishing court jurisdiction,create uncertainty for brand owners.Multiple issues in this regard are ripe for stud
37、y and advocacy to establish proper guidelines.By way of example,it is still unclear whether,as in the Internet setting,a brand owner might be able to“target”particu-lar markets or platforms(and exclude others)to limit its legal exposure to being summoned inadvertently to court proceedings in jurisdi
38、ctions not being targeted.INTA should develop and advocate for criteria to establish jurisdiction,balancing the need to protect trademark owners from being summoned to courts with little or no connection to disputes due to the decentralized and borderless nature of the metaverse,with the need of tra
39、demark owners to establish jurisdiction in order to take action against infringers.In conclusion,there is ample roomand reasonfor INTA to be involved in advocacy efforts to shape the legal aspects of the future operation of the metaverse.12 INTA|TRADEMARKS IN THE METAVERSEIntroduction The advent of
40、the Internet in 1990s caused a revolution in many aspects of modern life.From the ability to communicate and transfer data more easily,to the way companies advertised and offered goods and services through e-commerce,the Internet became a source of almost unlimited informa-tion for millions of peopl
41、e.Later,the Internet also paved the way for social media platforms,which have also revolutionized the way people interact with each other and the market of ideas.Even the political playing field has been influenced.The Internet opened the doors for all kinds of technological progress and for the sha
42、ring of in-formation.However,the Internet also created legal challenges on many fronts of everyday life.In particular,in the intellectual property(IP)field,an additional avenue for the trade of counterfeits was created.The problem of cybersquatters was born.Suddenly,brand owners had to devise new me
43、chanisms for monitoring infringement of their marks on the web.Over time,several of these challenges were addressed in the legal community by way of national legislation,treaties,or inter-governmental cooperation and action.But there are numerous legal aspects in the IP field that are still the subj
44、ect of study and advocacy by stakeholders hoping to better address the problems and challenges of the Internet.Now,even though we are still coping with legal issues in connection with nefarious online activity,the Internet continues to evolve and the metaverse is promising to revolutionize how we ex
45、perience the Internet.Suddenly,in its nascent form,the idea of the metaverse is causing the legal commu-nity to re-think,again,many of the same issues that it had to address in the late 1990s and early 2000s,on how the interactive and decentralized version of the Internet will affect daily lives.Aga
46、in,the IP community must consider how this development will affect brand owners and the proper way to address the challenges that it will bring about.The purpose of this white paper is to provide an introduction to the metaverse and the diverse problems and issues that its development may cause for
47、brand owners.To do so we will describe the state of the art of the metaverse,the challenges that brand owners will have to cope with to protect their trademarks assets,the doubts and queries surrounding registration strategies and how use will be affected and determined in the metaverse.We will then
48、 explore how licensing should evolve in light of this new phenomenon and the challeng-es posed by the decentralized nature of the Internet in the metaverse regarding enforcement of TM rights across national boundaries.In each section we attempt to identify the future avenues of research and advocacy
49、 that INTA should seek to endeavor.Moreover,this paper is intended to be a tool to help practitioners identify the issues they will need to address to protect their trademark as-sets in this new digital world.This paper will broadly identify issues ripe for future study by INTA and its committees in
50、 order to develop INTAs position for advocacy purposes.Due to the ongoing nature of the development of the metaverse,this paper cannot possibly identify every issue with absolute completeness,further study will be required in due course.1.Metaverse:Definition and State of the Art The word“metaverse”
51、was coined in 1992 by Neal Stephenson in his cyberpunk novel Snow Crash to describe a digital space in which users interact and create social relationships,using avatars to escape a dystopian reality.Similarly,many of the technological concepts related to the metaverse 13 INTA|TRADEMARKS IN THE META
52、VERSEdate back to William Gibsons 1984 science fiction novel,Neuromancer.This book is set in a digital world in which“console cowboys”model their movement from one computer network to another as they travel through a three-dimensional digital“cyberspace.”More recently,Ernest Clines 2011 novel and St
53、even Spielbergs 2018 movie adaptation of Ready Player One again involved a digital space,accessed through virtual reality of the digital universe or“VR”gear,in which players used avatars to interact with each other and their shared digital environment.With the rise of persistent interactive digital
54、environments,including games such as Fortnite and Minecraft,the metaverse gained digital reality.While there is no universally agreed-upon definition,for the purpose of this paper we will use the word metaverse to refer to a“convergence of our phys-ical and digital lives”1 through a network of inter
55、operable virtual spaces or worlds.It includes virtual reality experiences,augmented reality experiences,interactive,persistent digital spaces,or all of them,and differs both from the“physical world”and from most conventional 2D experiences of“the Internet”.The metaverse also differs from centralized
56、 forums such as social media platforms and websites connected to registered domains.As Mark Zuckerberg says,the metaverse is“an embod-ied Internet that youre inside of rather than just looking at.”2 But,to a substantial extent,it remains mostly fictional,aspirational,and hypothetical.The metaverse c
57、urrently does not identify a single shared virtual space,but is decentralized across various platforms and therefore can only come into full existence once there is a true interoperability between these different platforms.In this paper,the word metaverse will interchangeably be used to talk about t
58、he metaverse in this sense,but also about what presently could be called a metaverse embryo.The crucial elementwhich is not yet in existenceis interoperability.This is such an important issue,that on June 21,2022,a“Metaverse Standards Forum”(https:/metaverse-standards.org/)was established,which aims
59、 to be“A Venue for Cooperation between Standards Organizations and Companies to Foster the Development of Interoperability Standards for an Open and Inclusive Metaverse”3.Of course,the success in fixing standards largely depends on which companies are on board.Presently,some major players such as Me
60、ta and Microsoft are in,but there are also notable absences such as Apple and Roblox.It is too early to comment on the activity of this forum,which should be watched by INTA for future developments.Virtual reality games and the video game industry in general came close to an embodiment of a metavers
61、e,with the current most popular games being Fortnite,Roblox,World of Warcraft,and Minecraft.Presently,popular metaverse platforms in early,rudimentary forms are Decentraland and The SandboxTM.Great expectations surround the metaverse platform that is yet to be released by Meta(formerly Facebook),whi
62、ch,in the meantime recently launched its own virtual reality game,Horizon WorldsTM.Whatever its form and definition,experts expect that the metaverse will grow quickly and be im-mensely valuable.According to Bloomberg,the metaverse may be a US$800 billion market in 1 https:/ https:/ See:(https:/ INT
63、A|TRADEMARKS IN THE METAVERSE2024.4 JP Morgan values the metaverse as a market opportunity of US$1 trillion annually and Goldman Sachs sees it as an US$8 trillion-dollar opportunity.5 These figures seem plausible since,in addition to the video game industry,there are signs that consumer products,the
64、 fashion field,education,healthcare,and banking will all possibly benefit of this new business area and contribute to the global growth of business in the metaverse.1.1.Does the Metaverse Exist Today?As mentioned above,the metaverse presently exists in some rudimentary forms.On the one hand,several
65、apps allow users to login with their accounts from other platforms(e.g.,Apple or Google),as an alternative to a fresh registration,therefore de facto recognizing the identity of the user across different platforms.On the other hand,more and more we see free-to-play games with internal mi-crotransact
66、ions,by which users can buy clothes and accessories for avatars,as well as tools and instruments integrated into the game.A high avatar personalization seems to be crucial for the pop-ularity of these games and platforms.Indeed,purchases serve an important role in the business model of the metaverse
67、.Social and economic relationships between users have already attained popularity:the trading of virtual items is an important part of the customization of characters,or even for the customization of the game itself.In some cases,users can invest in virtual lands that can be rented or sold afterward
68、s.Some of the most successful recent metaverse experiences in-clude concerts,such as one on Fortnite featuring Travis Scott and Ariana Grande.Another example is Traviata Virtual Reality,the first Italian experiment of an opera designed for the metaverse.It is a revisited La Traviata to be enjoyed in
69、 a completely new way:thanks to Oculus Quest 2 technology,the opera can be seen in 360 and within an immersive experience.The viewer will observe the melodrama from a never-before-seen point of view,either alongside the singers or flying over the orchestra,while“bridging”scenes are projected between
70、 one musical fragment and another.This offers the chance to fantasize about the application of new technologies to the world of opera,but of course other types of completely different experiences can be envisaged.1.2.The Importance of the Terms of Service As noted earlier,the metaverse is not a sing
71、le virtual space,but is decentralized across various platforms,and each of the platforms is governed by its own contractual agreement with its users.The Terms of Service will govern how the users interact with each platform and other users within the virtual world.The Terms of Service normally inclu
72、de language around laws governing the use of the platform and the venue,or forum,for bringing disputes against other users within the platform.This affords metaverse operators the opportunity to dictate the answers to some of the questions raised in this paper concerning the use and enforcement of t
73、rademark rights within the metaverse.1.3.What Will You Likely be Able to Do in the Metaverse Tomorrow?The main features that distinguish the metaverse from traditional video games as we know them now are persistencethat the space continues to exist and that things continue to happen within the metav
74、erse even when the user is not connectedand interoperability across platformsbeing able to move a virtual good purchased on one platform to another,or avatars themselves being able to travel across platforms.While interoperability gives rise to several legal questions that are discussed later in thi
75、s paper,it is essential to the idea of a metaverse itself,impacting how we experience realityeither physical,virtual,or augmentedand affecting our social,economic,and 4 https:/ https:/ INTA|TRADEMARKS IN THE METAVERSEworking lives.In the technology sphere,the turning point for the metaverse is repre
76、sented by new cutting-edge hardware like Virtual Reality(VR)or Augmented Reality(AR)headsets,sensors,and other interfac-es.VR headsets provide an immersive virtual reality for the wearer,while AR headsets create virtual interaction with elements from the physical world.For example,project Cambria is
77、 a virtual headset announced by Meta that will link face and eye movement in the physical world with our digital avatar in order to increase immersion in the virtual world.In a nutshell,the metaverse will evolve our cur-rent experience of the Internet from a 2D perspective to a 3D one.1.4.Blockchain
78、 Domains With the advent of the metaverse,non-fungible tokens(NFTs)have gained popularity and impor-tance and have become an emerging valuable digital asset.NFTs represent physical things such as art,music,digital goods,videos,etc.As discussed later in this section,domain names primed for use on the
79、 decentralized web,e.g.,blockchain domains,also known as Web3 domains,are NFTs that can function as domain names on the decentralized web.Use of blockchain domains is not the norm yet,but if the march toward a decentralized web continues,blockchain domains will likely function as its address system.
80、In the following paragraphs,we identify key differences between traditional domains and Web3 domains,and their potential impact on brand owners.Like traditional domains(e.g.,www.inta.org or ),blockchain domains were created to simplify the naming of an Internet address from a series of letters and n
81、umbers to a more readily identifiable and communicable address.One of the primary current uses of blockchain domains is as user-friendly wallet names to store NFTs and as an address to which to transfer cryptocurrency.In addition to their use as a wallet name,blockchain domains can also point to a w
82、ebsite on certain Internet browsers that operate on the decentralized web(currently such browsers include Bravo and Opera).On the surface,the functionality of blockchain domains may be similar to Web2 domains,but the decentralized nature of Web3 and blockchain domains may be harmful to brand owners
83、due to a lack of regulation and legal enforcement mechanisms.Traditional domains are directed by browsers to a Domain Name System(DNS)server that connects it to the corresponding website.The DNS is governed and managed by the Internet Corporation for Assigned Name and Numbers(ICANN).Blockchain domai
84、ns do not use a DNS to connect the do-main name with a website.Rather,the blockchain domain links to an NFT existing on a blockchain.These blockchain domain names are purchased from blockchain domain name services providers,such as Unstoppable Domains or Ethereum Name Service(ENS).They do not govern
85、 the operation of the underlying website under the blockchain domain,and once the name is transferred from the blockchain domain name service,its control over the blockchain domain is narrow and limited.In-deed,this is consistent with the idea and philosophy of a decentralized web system.The operati
86、on of traditional domains is regulated and governed through ICANN.A distinct feature of a blockchain domain is that it is controlled by the owner of the domain and is not regulated by a central entity like ICANN or a registrar.While this decentralization will likely provide significant flexi-bility
87、and control to the owner over the domain and the underlying Web3 website,a collateral impact is that it may attract cybercriminals and invite intellectual property theft.For example,traditional domains governed by ICANN are subject to the Uniform Domain Name Dispute Resolution Policy 16 INTA|TRADEMA
88、RKS IN THE METAVERSE(UDRP).The UDRP has been a tool for brand owners to enforce against illegitimate and bad faith us-ers of trademarks as domains.If the traditional domain at issue violates ICANNs UDRP policy,it can be transferred to the complainant.Moreover,a complainant can also initiate proceedi
89、ngs in court under the U.S.Anti-Cybersquatting Protection Act and under similar laws in other countries.These enforcement mechanisms are not currently available against blockchain domains due to a lack of a central governing body regulating the domain names,as well as jurisdictional issues(jurisdict
90、ional concerns are discussed in detail in section 5.1 in this paper).Given the current nascent state of blockchain domain use and its scant regulation,there are limited tools for brand owners to protect their marks against infringing and illegitimate use.One sugges-tion is to secure blockchain domai
91、ns as early as possible from blockchain domain name service companies like Unstoppable Domains and ENS.Another is to submit take-down requests to NFT marketplaces,like OpenSea and Rarible,where the blockchain domain is offered for sale.While a takedown does not result in the transfer of the domain,i
92、t may impact the value of the domain as speculators likely purchased it to seek offers on the marketplace.These are rudimentary and not highly effective tools to protect the public and brand owners from nefarious and infringing uses of marks as blockchain domains.With the growth of NFTs and their po
93、tential use as domains,there clearly is a compelling need for the legal and consumer protection community to lobby for enforcement mechanisms and policies to prevent illegitimate use of trade-marks as blockchain domains.1.5.Interaction of Brands in the Metaverse Brands may exploit the metaverse to e
94、nhance engagement with consumers,for example by promot-ing events,creating virtual stores(to sell virtual or physical goods),or by launching virtual products before their physical counterparts,as prototypes,for market testing,or in order to increase influence on consumers.Brands appreciate that esta
95、blishing a virtual presence in digital worlds allows them to engage with a largely younger audience(Nike or Vans in the videogame Roblox)and have been offering common objects used in games,so called“skins”or“looks”,such as Balenciaga clothing in the online game Fortnite.Other uses of brands in the m
96、etaverse relate to events in digital worlds:for example,the Metaverse Fashion Week held in Decentraland in March 2022 attracted brands to exhibit their digital products,which in turn could be sold inside or outside the metaverse.One should also consider that there might be use of a brand specificall
97、y for the metaverse,and not as a link to the physical world.New brands may come into existence in the metaverse and then move(or not)to the physical world.1.6.Personhood in the Metaverse The blurring between the physical and virtual worlds brings about the question of how the classic con-cepts of pe
98、rsonhood,individual rights,privacy,and accountability can be applied in the metaverse.First,one should understand what“personhood”,i.e.,“having status as a person,”means and how this is different from mere“digital identity”as accorded to users by the platforms.Personhood in the physical world has ri
99、ghts attached to it,including for example the right to fully own ones belongings.The status of digital belongings in the metaverse is instead uncertain and allowing users to“use”17 INTA|TRADEMARKS IN THE METAVERSEtheir digital belongings across platforms,rather than being required to re-purchase the
100、m,seems essential to the attractiveness of the metaverse from the consumer point of view.Another side of this issue is the open question of whether,in the metaverse,concepts like privacy or accountability for online actions will be enhanced,since the experiences related to it are likely to be more“r
101、ealistic.”For example,there are considerable risks concerning unsuitable content for minors,6 sexual harassment of or by users,7 fraud,8 and cybersecurity.Regulating how platforms will link avatars to persons and businesses in the physical world,as well as the terms of use of the plat-forms,might be
102、come necessary.If and how public authorities may intervene in the future in order to avoid illegal acts in the metaverse is also an open question.Turning to trademarks,for most businesses one sensitive issue will be to avoid trademark infringe-ment and business identity theft.Considering that the me
103、taverse is often based on user-generated content,nefarious actors can easily impersonate businesses or even sell fake virtual assets.The metaverse is still in a rudimentary form,but already shows huge potential for brand owners The metaverse poses many open questions and how they will eventually be
104、resolved will determine whether it will be a brand-friendly space2.Trademarks in the Metaverse:Trademark Application and Registration Issues Due to the novelty of the notion of the metaverse,there are still several areas of trademark law and practice that are open to discussion and debate.Below is a
105、 brief discussion of the matters that brand owners and practitioners should consider.2.1.Are Virtual Goods in the Natural Zone of Expansion of their Physical Counterparts?One of the main questions faced by existing brands is whether their preexisting registrations for physical goods are sufficient,o
106、r if it is necessary to apply separately for trademark rights for virtual counterparts.If a brand does not either apply for virtual goods or create virtual goods,could they be superseded by the metaverse equivalent of a cybersquatter?Or will tribunals enforce preexisting rights in physical world goo
107、ds in the metaverse?These questions have been tentatively answered at least once in favor of expanding preexisting phys-ical-world rights into the metaverse.In Herms International,et al.v.Mason Rothschild,1:22-cv-00384-JSR(S.D.N.Y.May 18,2022),a New York federal jury heard one of the first cases eve
108、r filed applying preexisting trademark rights in physical-world goods to the virtual world and found in favor of the trademark owner.According to the complaint,Mason Rothschild has earned over one million 6 https:/ 7 https:/ https:/ Takeaways18 INTA|TRADEMARKS IN THE METAVERSEdollars by selling“Meta
109、Birkins,”virtual Birkin bags authenticated by NFTs.Herms International,the Plaintiff,claims that Rothschilds use of METABIRKIN as a trademark for the virtual goods is an infringement of Hermss BIRKIN trademarks and that the imageshe used likewiseviolated its trade dress rights in the highly famous a
110、nd valuable Birkin bag.The complaint cites examples of physical world consumer confusion and attributes the monetary value of the virtual goods to the goodwill de-rived from Hermss intellectual property.In May 2022,the district court denied Rothschilds motion to dismiss,recognizing that Hermss claim
111、s could have merit.The district court declined to decide that“Metabirkins”had the minimal artistic relevance required for First Amendment protection of the unauthorized use of trademarks in artistic works,and it concluded that Herms had adequate-ly alleged that the METABIRKIN label was explicitly mi
112、sleading and could therefore state a claim that METABIRKIN infringes on Hermss trademarks.In a Final Judgment issued on February 14,2023,the jury found that Rothschild was liable in the amount of$133,000 for trademark infringe-ment,trademark dilution,and cybersquatting.The saga continues,however,as
113、Herms,on March 3,2023,filed a motion for a preliminary injunction accusing Rothschild of continuing to infringe even after entry of the jury verdict.9 As the time to appeal the verdict has not yet expired as of this writing,we continue to watch.The present outcome in Herms arguably follows a simple
114、logic that trademark attorneys have seen play out in comparable situations.Where the value of a virtual good is derived from its physical-world value,it only makes sense for the physical-world owner to reap the benefits.Under a traditional zone of expansion analysis,a court generally would not find
115、that non-downloadable software services are in the natural zone of expansion of a physical-world item like clothing.Indeed,a fashion brands sale of its physical clothing as virtual clothing in the metaverse seems entirely different from a situation where a clothing brand transitions to offering soft
116、ware.Furthermore,from a policy perspective,it would make little sense for courts to punish existing brand owners by permitting third parties to use sales of digital images of recognizable goods to profit from the preexisting goodwill developed by sales of the physical goods shown in the images.It wo
117、uld therefore make sense for tribunals to exercise flexibility when tasked with determining whether own-ers of trademarks for physical goods can enforce their rights in the metaverse without additional registration or use of a mark that is specific to the metaverse.The same may hold true for preexis
118、ting shape trademarks and trade dress where sufficient evidence of secondary meaning can be estab-lished.Because such marks generally are not recognized as inherently distinctive,if courts refuse to impute secondary meaning earned in the physical world to the digital world,it will be virtually impos
119、sible for existing shape mark and trade dress owners to stop sales of digital goods reflecting their recognizable designs in the metaverse.Absent a compelling free speech concern,(see Section 5.4)tribunals should focus on the consumer interaction with the brand in the metaverse and soberly recognize
120、 who is the rightful owner of the goodwill being exploited.That being said,open questions remain about how tribunals will handle the case of brands that exist solely in the metaverse enforcing their marks for virtual goods against use of the mark for physical world counterparts.For example,should a
121、non-famous brand that sells virtual clothing only in the metaverse be able to successfully demand that a small clothing boutique operating under the same mark and that has never had a presence in the metaverse cease and desist use?As the present example illustrates,the metaverse will present new que
122、stions related to both likelihood of confusion and zone of expansion that courts will need to grapple with in the years to come.9 See https:/ INTA|TRADEMARKS IN THE METAVERSE2.2.Trademark Applications Covering the Metaverse Due to uncertainty about whether registrations for physical goods will trans
123、late into virtual protec-tion and proliferation of new brands that exist only in the metaverse without a physical counterpart,trademark offices around the world have been inundated with applications for goods and services related to the metaverse.As an example,the United States Patent and Trademark
124、Office(“USPTO”)has seen thousands of applications in the past year alone,most filed on an intent-to-use basis,and many for preexisting brands.This level of filing activity,combined with delayed examination times,has resulted in relatively few applications issued as registrations to date.Practitioner
125、s and intellectual property offices alike continue to develop strategies and procedures for how to handle metaverse-related trademark filings.The following remarks have been gleaned from how appli-cants,the USPTO,EUIPO,and WIPO have handled the prosecution of such marks to date,and also raise unansw
126、ered questions as this field continues to evolve.2.3.Where to File Applications The metaverse,much like the Internet,is not restrained by geographical boundaries.Therefore,by placing a brand into the metaverse,a brand owner arguably enters international commerce.This is all the more true if we take
127、interoperability as an essential feature of the metaverse,so that use would not be restricted to some particular platform or depend upon a specific service provider.Trademark owners that already operate online seemingly would not need to reinvent the wheel with regard to their global strategy and sh
128、ould continue to focus clearance and filing resources on im-portant jurisdictions,e.g.,key consumer markets,key places for production of goods,and/or other places where piracy justifies additional prophylactic steps.It is worth noting that new metaverse-based consumer interactions could open up prev
129、iously un-foreseen markets for a trademark,and accordingly,it would behoove brand owners who are active in the metaverse to be reasonably attentive to new market penetration with consumers and pirates in the metaverse,as this information could impact which jurisdictions are deemed important for prot
130、ection.In common law jurisdictions,like the United States,brand owners need not register their marks in order to acquire trademark rights.Simply using a particular mark in commerce affords the owner common law trademark rights in the geographic region of use.Brands therefore may be able to gain comm
131、on law trademark rights in the United States simply by establishing use in commerce in the metaverse.This would apply to both brands that wish to expand use of their existing marks into the metaverse and to new brands that form in order to participate in the metaverse.Brand owners that establish com
132、mon law rights can file for federal registrations at a later date and note the date of first use in the metaverse.Like owners of federal registrations,common law trademark owners are responsible for policing use of their mark to ensure exclusive use.Unlike federal registrations,common law rights are
133、 restricted to the geographic area of use of the mark and therefore cannot always be enforced across the country if use is limited to certain states.This presents unique challenges when applied to the metaverse,which is geographically unbound-ed.See Section 5.11(detailing jurisdictional issues in th
134、e metaverse).To enforce a common law 20 INTA|TRADEMARKS IN THE METAVERSEtrademark,the owner generally must establish rights in the mark in the U.S.state in which the law-suit is brought.Given the lack of geographical limitation on metaverse goods and services,it may be difficult to adequately enforc
135、e common law rights in multiple states.Additionally,unlike federal reg-istrations,common law marks do not enjoy the benefit of placement on national registers of marks,which serves the purpose of easily putting third parties on notice of a brands exclusive rights.How-ever,for small businesses with l
136、imited resources that wish to dip a toe into metaverse commerce,common law rights afford them limited protection to build and enforce their brand.The extent to which use in the metaverse will be deemed trademark use in a particular country for purposes of supporting a registration or an infringement
137、 analysis could depend on a number of factors,including language and level of interaction with local consumers,among others.Outstanding questions also remain regarding how current and future trademark coexistence agreements will be drafted,adapt-ed,and enforced in the metaverse.It stands to reason t
138、hat legal analysis for both infringement and coexistence agreements would be informed by prior decisions involving marks used in international e-commerce and/or on social media platforms.It seems worth considering that the potential inten-sity of interactions in the metaverse may further inform how
139、these kinds of decisions are rendered and how this area of the law develops.The ongoing influx of metaverse trademark applications and potential for attendant litigations could accelerate development.2.4.Class Coverage:Does the Current Nice Classification System Work?There are a variety of goods and
140、 services that brand owners may wish to provide in the metaversefrom the digital counterparts of a brands physical goods to immersive virtual reality experiences,to new forms of digital currency to use within the space.As brand owners contemplate potential com-mercial activity in the metaverse,many
141、are wondering whether their existing registrations for phys-ical world goods will extend into the metaverse or whether they will need to file new applications.If the latter,they wonder in which classes they should file and for what goods and services.In some IP Offices,applications for metaverse goo
142、ds and services10 have mostly been in Classes 9,35,36,41,and 42.Generally speaking,applicants have typically included the following categories of goods in each of these classes:Class 9:virtual goods,including goods authenticated by non-fungible tokens(“NFTs”).11 Example,U.S.Reg.No.6,731,817:Download
143、able multimedia file containing art-work relating to hand-drawn non-generative works authenticated by non-fungible tokens(NFTs);downloadable software for generating non-fungible tokens used 10 Although this section includes only examples of registrations from the USPTO,other intellectual property of
144、fices have taken steps to indicate how they will handle goods and services in the metaverse.Notably,the Canadian Intellectual Property Office(“CIPO”)has added a series of acceptable identifications for goods and services related to NFTs and blockchain technology in Classes 9,36,and 42 to its Goods a
145、nd Services Manual.As of the time of this papers publication,CIPO is experiencing a lengthy backlog in prosecution,so it uncertain how the Office will handle other virtual goods that do not exactly conform to those published in the Goods and Services Manual.11 Although consumers colloquially refer t
146、o a digital good,like a virtual trading card image,as“an NFT,”it is important to understand that the ac-tual good being purchased is a digital media file that itself is not the NFT.The NFT is a unique piece of computer data used in this example to verify the digital good at issue.It typically is pub
147、licly recorded on a blockchain,which is an often-public digital ledger where data can be securely recorded(due to the decentralized nature of the blockchain).In addition to verifying ownership,brands have used NFTs to act as keys to exclusive member-ship benefits or content.The final aim of NFTs is
148、to create scarcity in the digital world and certify the possession of a digital file,which like any asset can be exchanged and sold to others.The USPTO has at least in one case taken the position that it is not proper to file for“non-fungible tokens”alone in Class 9.Instead,the USPTO identification
149、manual identifies a number of formulations as acceptable that refer to downloadable files of some kind that are“authenticated by non-fungible tokens.”CIPO has taken the opposite approach and has included the following language in its Goods and Services Manual as an acceptable identification in Class
150、 9:“computer software namely non-fungible tokens for facilitating commercial transactions.”21 INTA|TRADEMARKS IN THE METAVERSEwith blockchain technology,namely,digital media with blockchain technology for representing a collectible item;downloadable software for generating crypto-col-lectibles and n
151、on-fungible tokens.Class 35:marketplaces and exchanges for virtual goods,including NFT exchanges(e.g.,the popular platform OpenSea);auction services.Example,U.S.Reg.No.5,797,815:Providing an online marketplace for buyers and sellers of crypto collectibles;providing an online marketplace for buyers a
152、nd sellers of blockchain-based non-fungible assets;operating online marketplaces featuring crypto collectibles and blockchain-based non-fungible assets.Class 36:financial exchange services related to virtual goods;cryptocurrencies;tokenization and fractionation of physical world assets(e.g.,real est
153、ate or valuable art pieces).Example,U.S.Reg No.6,726,315.:cryptocurrency exchange services;cryptocur-rency exchange services featuring blockchain;cryptocurrency trading services;cur-rency exchange services;financial exchange of virtual currency;financial broker-age services for cryptocurrency tradin
154、g.Class 41:virtual experiences.Example,U.S.Reg.No.6,364,707;providing online augmented reality games;en-tertainment services,namely,providing online video games;entertainment ser-vices,namely,providing online virtual reality environments in which users can in-teract for recreational and business pur
155、poses.Class 42:third-party software providers and back-end blockchain coding services.Example,U.S.Reg.No.6,007,102:providing user authentication services using blockchain-based software technology for cryptocurrency transactions.As can be seen above,virtual goods generally are being filed in Class 9
156、 and not in the same class as their physical-world counterparts.For example,a fashion boutique that owns existing federal registrations for apparel and footwear in Class 25 and wants to obtain a registration that technically covers virtual apparel and footwear,under current practice,is constrained t
157、o file for virtual goods in the field of fashion in Class 9.12 This seems to be the approach taken by the EUIPO in its recent guideline on this matter and on NFTs,13 and WIPO also recently introduced“downloadable digital files authenticated by non-fungible tokens NFTs”as a Class 9 good in the 12-202
158、3 Nice Classifi-cation edition.This seems to indicate that virtual goods,whether or not authenticated by means of NFTs,will be placed in Class 9 with software and other digital items.A potential exception to this 12 Whether coverage for physical-world goods is sufficient to enforce against digital g
159、oods is currently being litigated in the U.S.See above;see generally https:/ See:https:/euipo.europa.eu/ohimportal/en/news-newsflash/-/asset_publisher/JLOyNNwVxGDF/content/pt-virtual-goods-non-fungible-to-kens-and-the-metaverse22 INTA|TRADEMARKS IN THE METAVERSErule is the case in which a company wi
160、shes to sell physical goods that have certificates of owner-ship that are authenticated by NFTs on the blockchain.For example,a company offering a limited release of high-end/designer goods may wish to issue the certificate of authenticity as an NFT that comes with other digital benefits(perhaps exc
161、lusive access to a branded area of the metaverse).If the goods were watches,it is plausible that the company could file for something like“watches authenticated by digital tokens,namely non-fungible tokens”in Class 14.It is not clear that such a filing would be necessary or advisable,given that a pr
162、eexisting registration for watches in Class 14,without reference to NFTs,would cover the physical goods,and a metaverse experience could be covered in a Class 41 registration.Such a filing seems on balance likely to draw an office action over whether physical goods can be authenticated by NFTs,which
163、 should be permissible but could bear explanation to trademark offices at this point.Meanwhile,the USPTO has indicated that it will reject identifications that attempt to claim virtual goods in the class of their physical world counterparts.For example,Yuga Labs LLC initially applied for the mark BA
164、 KC for“digital collectibles;digital collectibles sold as non-fungible tokens”in Class 16,presumably because Class 16 is the appropriate class for physical world paper collectibles,such as trading cards.In a non-final office action issued in March of 2022,the USPTO examiner notes that Class 16 is fo
165、r printed and paper goods and suggests that applicant amend the identification to Class 9 instead.The examiner also notes that the goods are indefinite and require further clarifi-cation since“digital collectibles”could encompass a wide variety of fields.The examiner suggests instead:“Digital collec
166、tibles in the nature of downloadable multimedia file sic containing artwork relating to indicate field or subject matter of file authenticated by non-fungible tokens(NFTs);Digi-tal collectibles in the nature of downloadable image files containing indicate subject matter or field,e.g.,trading cards,a
167、rtwork,memes,sneakers,etc.authenticated by non-fungible tokens(NFTs).”14The examiners requirement that the applicant narrow the identification to include a type of digi-tal good and further information relating to,e.g.,commercial field/subject matter/purpose reflect predominantly U.S.-related prosec
168、ution requirements that arise in relatively few other trademark offices.Unlike in many other jurisdictions,applicants in the U.S.cannot have identifications that broadly claim“computer software”because such identifications are considered overly broad and would frustrate other applicants ability to d
169、evelop rights in a mark for software that has little to no likelihood of confusion with a prior existing mark for software.Given that many jurisdictions have no such requirements,applicants that look to do business outside of the United States can find them-selves facing legal risk based on foreign
170、registrations with broad coverage held by prior rights own-ers operating in unrelated fields.An influx of thousands of new applications in Class 9 for metaverse goods will add to this ongoing backup of unreviewed applications at many trademark offices and will continue complicating trademark owners
171、and practitioners clearance efforts.Just as identifications that are too broad can create problems for trademark owners,specifications should not be unduly narrow.One approach is to include a description of the virtual goods them-selves,which does not limit the authentication method both to cover th
172、e virtual goods with or without authentication by NFTs now and to avoid having a specification become unintentionally narrowed or rendered obsolete over time if the preferred authentication method changes.15 14 See:https:/tsdr.uspto.gov/documentviewer?caseId=sn90837143&docId=NFIN20220321093418#docIn
173、dex=10&page=115 It is not inconceivable that someday NFTs could be replaced by a newer technology that offers even more security or built-in contractual advan-tages.23 INTA|TRADEMARKS IN THE METAVERSEAs mentioned above,the developing consensus appears to be that virtual goods and services,in-cluding
174、 those authenticated by NFTs,belong in Class 9(with the exception of marketplace and finan-cial services related to virtual goods,which belong in Classes 35 and 36,respectively);however,the question remains as to whether this is the correct approach.There are at least two other potential solutions:1
175、)create a new 46th Nice Classification specifically for virtual goods and services,or 2)permit applicants to file for virtual goods and services in the same class as their physical counter-parts.A 46th Nice Class would alleviate some of the over-crowding of Class 9 discussed above.However,a new clas
176、s would share many of the drawbacks of the current Class 9 approach.Specifically,Class 46 could become overcrowded with applications that broadly claim goods and frustrate clearance searches.Registering virtual goods in the same class as their physical counterparts may present a solution to overcrow
177、ding trademark registers with overly broad registrations for“virtual goods.”By having to file in the corresponding real-world class,the virtual goods would necessarily be limited to the scope of that class.This would also assist businesses in identifying marks for related goods and services during t
178、rademark searching and clearance.For example,a virtual shoe is quite different from a vir-tual tennis racket,but under the current Class 9 approach,both are likely to appear in a search for virtual goods in Class 9.If the virtual tennis racket were instead registered in Class 28 with other sports eq
179、uipment,and the virtual shoe in Class 25 with clothing and footwear,a clearance search could more easily identify marks that could compete either in the virtual or real world for related goods.Regardless of what approach ultimately becomes the dominant one,the need for international uni-formity is p
180、aramount.Otherwise,it will prove difficult for applicants to take advantage of the WIPO system for extending international registrations.The application of preexisting trademark law to a completely virtual world raises many challenges for trademark filing strategies and uniformity in trademark prose
181、cution worldwide.Trademark offices appear to agree that most virtual goods belong in Class 9,but whether that is the most prudent strategy is yet to be determined.3.Use of Trademarks in the Metaverse The aspects of the metaverse that render it distinct from the physical worldprincipally,the in-terop
182、erability of digital features across multiple proprietary platformsalso raise questions about trademark use in the metaverse.Trademark use is intertwined with trademark rights,and in some jurisdictions can be a prerequisite to claiming trademark rights,obtaining and maintaining a reg-istration,and e
183、nforcing those rights against others.16 Therefore,determining how trademark use 16 In the United States,for example,use of a trademark in commerce is a pre-condition to registration unless the application is based on a foreign registration from a“country of origin”that is a party to a convention or
184、treaty relating to trademarks to which the United States is also a party,or that extends reciprocal registration rights to nationals of the United States by law.15 U.S.C.1126(e),37 C.F.R.2.34(a)(3).The owner of a trademark registration must then submit a Declaration of Use and provide evidence of co
185、ntinuing use of the registered mark for or in connection with all listed Key Takeaways24 INTA|TRADEMARKS IN THE METAVERSEin the metaverse may align or conflict with local legal standards for physical-world trademark use will inform how trademark rights linked to metaverse activity will be establishe
186、d,maintained,and enforced across jurisdictions.This section considers how differences between traditional trademark use in the physical world and trademark use in the metaverse could impact trademark rights across jurisdictions.In particular,this section explores challenges applicants have already e
187、ncountered in establishing trademark use for metaverse-related goods and services;how differences between virtual and physical goods and services may create difficulties for trademark owners to show trademark use in practice;how the lack of geographic boundaries may be understood in the metaverse an
188、d how this may impact trade-mark ownership and enforcement;and how the“permanence”of virtual objects and avatars in the metaverse may impact trademark clearance and standards for trademark abandonment.For purposes of this discussion,trademark use may be broken down into several core elements:(1)the
189、fixation of a mark in consistent or substantially similar appearance,(2)in association with certain specified goods or services,(3)within a specified geographic region,(4)regularly and/or consistently over a period of time.Each of the elements may be interpreted differently in different jurisdiction
190、s and on a fact-specific basis.3.1.How Do Trademark Offices Currently Understand Trademark Use for Metaverse-Related Goods and Services?The potential shortcomings of the Nice Classification System were discussed above in Section 2.4.But the problems for brand owners may also extend to how trademark
191、offices understand how trade-marks are used in the metaverse,and how that can differ from traditional trademark use.The po-tential disconnects between the two can be seen already in a handful of examples from the USPTO,where applicants have faced refusals for specimens submitted in support of tradem
192、ark registration for metaverse-related goods and services.The question of what trademark use will look like in the metaverse has already faced some scrutiny in the United States,even while the metaverse is still in an early stage of development.This is be-cause the USPTO is one of a relative handful
193、 of trademark offices that requires proof of use to ob-tain a registration-that is,at least for applications not based on foreign registrations.As mentioned above,only a small percentage of applied-for marks dealing with virtual goods in the metaverse have begun the examination process in the United
194、 States,and even fewer have registered.Accord-ingly,there are many unanswered questions regarding what evidence will and will not be accepted by the USPTO for metaverse-related goods and services.The following examples provide some indi-cations of what brand owners may have to face to obtain registr
195、ations for their trademarks based on use in the metaverse.goods and services(a)six years after registration,and(b)every ten years after registration.Failure to do so,or to provide a sufficient specimen of use,will result in the automatic cancellation of the registration.Other countries require evide
196、nce of use only after an application has been filed.The Philippines requires a declaration of use in the national territory three years from the date of filing of the trademark application,and then again at the fifth year and every five years thereafter.Cambodia requires a declaration of use in the
197、national territory on each renewal.In Mexico,use of the trademark must be declared in the national territory within the three months following the third year of validity of the registration,otherwise the trademark is considered expired.Argentina and Indonesia also have use requirements.In most other
198、 countries,confirmation of use is not required to obtain or to maintain registration as an affirmative obligation.However,proof of use may be required to maintain the registration against a cancellation action by a third-party.In most countries,with the notable exception of Chile(where non-use cance
199、llations are not available),lack of use over a period of time can constitute a basis for a third-party to seek to cancel a registra-tion.25 INTA|TRADEMARKS IN THE METAVERSE On April 30,2021,Creatd,Inc.filed to register the trademark OG in connection with,among other services,“providing online public
200、ations in the nature of NFTs.”17 The applicant sup ported the application with a screenshot of its website promoting the clips with a button that read“BUY ON OPEN SEA.”The examiner rejected the screenshot as a specimen of trademark use on the grounds that it did not reference NFTs,notwithstanding th
201、at Open Sea is arguably widely known as an NFT marketplace.The applicant responded with an|updated screenshot that replaced the button with one that read“EXPLORE THE NFTs.”The application proceeded from there to registration.On June 4,2021,Dream Big Kiddo LLC filed to register the trademark CUTIECOI
202、N in con nection with“digital tokens,cryptographic tokens,non-fungible tokens(NFTs),and digi tal artworks”in Class 9.18 The examiner rejected the application on the grounds that the specimena screenshot of a website where the artwork could be purchaseddid not clear ly indicate that the“digital token
203、s”could be downloaded.The applicant amended the de scription to“providing online nondownloadable image files”in Class 42,and the examiner subsequently approved the application for publication.On November 18,2021,YUGA LABS,INC.filed to register the trademark BA YC BORED APE YACHT CLUB and Design for
204、downloadable and non-downloadable NFTs and related goods and services.19 Among other objections,the examiner rejected the specimen on the grounds that a button stating“BUY AN APE ON OPENSEA”suggested that OpenSea(the NFT market place)was the source of the goods and servicesnot the applicant.The appl
205、icant over came this refusal by amending the application to an“intent-to-use”basis,thereby postpon ing the specimen requirement until after publication.These examples highlight that trademark offices may need time to react to developments in the metaverse,and specifically how users engage with goods
206、 and services from brand owners in the metaverse.Brand owners should not take for granted,for example,that an examiner will be familiar with popular marketplaces such as OpenSea when entering the metaverse.In this respect,brand owners may need to consider how they can“mimic”traditional trademark use
207、 in the metaverse and incorporate elements that an examiner will be more likely to recognize as trademark use.Another consideration for brand owners is how the user experience in the metaverse may change over time as compared to the user experience with pre-metaverse technology.Currently,the differ-
208、ence between“downloadable”and“non-downloadable”files is widely understood by consumers,and the difference makes sense in the context of a physical mobile device that can either download or stream software from one physical location to another.From the perspective of an examiner reviewing a specimen
209、of use,the difference can be simplified to whether a screenshot includes a“Download”button.There is no guarantee,however,that this same distinction will make sense in the metaverse,or that a user will ever have the need to click a“Download”button to purchase and retain a software-based product.This
210、has the potential of posing a challenge for the brand owner who must find a way to establish that it offers the equivalent of“downloadable software”for regis-tration purposes.Trademark offices will need to make efforts to stay informed on how trademark use in the metaverse differs from traditional t
211、rademark use in practice.Likewise,trademark attorneys should stay on top of innovations in the metaverse to be ready to argue how new forms of trademark use in the metaverse by their clients still meet the legal requirements to maintain their clients trademark rights.And in 17 U.S.Serial No.90684262
212、.18 U.S.Serial No.90755739.19 U.S.Serial No.97132874.26 INTA|TRADEMARKS IN THE METAVERSEthe meantime,brand owners are encouraged to deploy their trademarks in the metaverse in such a way as to resemble traditional trademark use as much as possible,at least in these early stages of development.3.2.Ho
213、w Does Trademark Use in the Metaverse Differ from Trademark Use in the Physical World?The issues raised in the last section beg the question of how trademark use in the metaverse may differ in fact from traditional trademark use.At this stage of development,we can only speculate,but the core attribu
214、tes of the metaversenamely,the interoperability of digital features across plat-formspoint to at least a few possible differences from trademark use in the physical world.Unlike physical features that can be understood as“fixed,”digital features may differ not only from one platform to the next but
215、also from one user to the next.This technological variability may pose a special challenge to brand owners,given that brand ownership is premised on the owner controlling how,when,and where their brands appear.Projecting forward to a time when the metaverse is fully functioning,we must ask how trade
216、mark use may look in the metaverse,and how differences in such use from trademark use in the physical world may impact trademark rights3.3.Trademark Presentation Across Platforms in the Metaverse The promise of interoperability in the metaverse presumes that there will be some degree of visual consi
217、stency for a digital feature that moves between platforms.Consider for example a personal avatar that a user creates in Decentraland and moves to The SandboxTM.Presumably,that user will expect that the digital features of their avatar will remain the sameif not exactly so,then at least substantially
218、 identical.Part of the promise of the metaverse is that it will“reflect the physical world”at least in part(if not always exactly so).20 But while the physical world offers object permanence,there is no guarantee that in the metaverse how a digital object appears to one user will be the same as it l
219、ooks to another user,given the platform and device each happens to be using at the time.These differences may be minor,such as differences in color grade,resolution,or object size.How-ever,even relatively minor changes in the appearance of digital features could have a profound impact on brand owner
220、s.Similarly,these standards of review may differ from one jurisdiction to the next.The problem for brand owners is therefore twofold.First,trademark use in the metaverse may face two related but contrary challenges.On the one hand,trademark use in the metaverse is not juris-diction specific.This mea
221、ns that trademark owners may not be able to tailor the appearance of their trademarks on a jurisdictional basis.By contrast,trademark owners commonly tailor their trade-mark use in the physical world on a jurisdictional basis to align their trademarks with the version(s)registered in each jurisdicti
222、on.In situations where trademark owners have registered different ver-sions of their trademarks in different jurisdictionseither as a marketing decision,for regulatory purposes,or perhaps to avoid a dispute in certain countriesthey may face a difficult decision as to which version of their trademark
223、 to use in the metaverse.On the other hand,while the metaverse is not jurisdiction-specific in nature,it is(or may be)platform-specific in its possible manifestations.For the trademark owner,this means that there is no guarantee that the presentation of their trade-mark(s)on one platform will align
224、with its presentation in the next.Depending on the degree of vari-20 Scott Nover,The meaning of the metaverse,and all the terms you need to understand it,Quartz(Nov.15,2021)https:/ INTA|TRADEMARKS IN THE METAVERSEation from one platform to the next,brand owners may find that the presentation of thei
225、r trademarks in one platform or another may vary to the extent that it either fails to support that brand owners registration or it may even conflict with a third partys trademark.Consider,for example,competing color marks held by two different brand owners,each of which are defined according to spe
226、cific Pantone color codes.Differences in presentation of a trademark from one platform to the other can mean the difference between proper trademark use and a potential trademark dispute.Second,as discussed above,the metaverse is expected to function across jurisdictional lines.This means that brand
227、 owners may find it difficult,if not impossible,to tailor the appearance of their trademarks on a jurisdictional basis.By contrast in the physical world,brand owners commonly tailor their trademark use on a jurisdictional basisfor example,for marketing purposes,or to align their trademark use with t
228、he version of that trademark registered in a given jurisdiction.Consider in this respect that brand owners often must agree to restrictions on trademark use,such as using a modified version of their trademarks in certain countries under settlement terms with a local com-petitor.If a brand owner cann
229、ot control where and how their trademarks may appear,then they may open themselves up to liability through no direct act on their part.Brand owners will need to be mindful not only of the technological differences between platforms,but also how different user devices for engaging with the metaverse
230、may affect how their trade-marks appear.Staying on top of these differences may become critical to maintaining brand consis-tency and,by extension,trademark rights.Brand owners will also have to be diligent about how the platforms they allow their trademarks to enter may cross jurisdictional lines(s
231、ee Sec.3.6 below),and what control(or lack thereof)they can maintain over the presentation of their trademarks.3.4.Association or Fixation of Trademarks with Virtual Goods and Services The potential variations in trademark presentation across platforms may also raise issues as to how trademarks are“
232、associated with”or“affixed to”goods and services in the metaverse.Because the metaverse will consist in whole or in part within virtual environments,our conventional understanding of what it means for a trademark to be associated with or affixed to a product may not necessarily apply.The USPTO provi
233、des detailed guidance in the Trademark Manual of Exam-ination Procedure regarding appropriate specimens of use in both the physical world and online.21 These examples include several illustrations provided to demonstrate what constitutes use of a trademark“in association with”the sale of goods throu
234、gh an online retail store.The detail provided by the USPTO reflects the time spent developing an understanding of how an“electronic display”compares to a point of service display in the physical world.It may take some time for the USPTO to develop equivalent guidelines for brand owners to understand
235、 how examiners will assess spec-imens of use pulled from 3D virtual environments,which are not bound by the limitations of either the physical world or a 2D webpage.A related question is how trademark use in“mixed”realities may differ from use in entirely physical or virtual environments.For example
236、,will it suffice for a trademark owner to offer users an augment-ed reality experience that superimposes a virtual image of a trademark over a physical good?Will this association between trademark and goods suffice,even if the augmented reality experience does not permit customers to purchase or acq
237、uire the goods in question at that time?21 See TMEP 900 et seq.(July 2022)https:/tmep.uspto.gov/RDMS/TMEP/current#/current/TMEP-900d1e1.html.28 INTA|TRADEMARKS IN THE METAVERSE3.5.Relationship Between Virtual Goods and Services and Physical World Counterparts When a brand owner uses a trademark in t
238、he metaverse,what is the good or service with which the mark is being used?Is the mark being used on a virtual good?Or is the mark being used virtually to promote a physical world good?Or both?Is the mark merely a display of advertising?Is the mark being used in connection with the offering of a ser
239、vice,and is the service performed partially or wholly within the metaverse?For example,in the Metaverse Fashion Week held in March 2022 in Decentraland,which saw participation over four days from over seventy brands and artists,includ-ing major labels Tommy Hilfiger,Dolce&Gabbana,and Etro,one could
240、easily walk from virtual store to virtual store and purchase virtual clothing for ones avatar.22 One could also be redirected to a webpage allowing the purchase of a real-life version of the outfit purchased for the digital avatar.In some cases,virtual goods or services are not simply counterparts t
241、o physical world goods or ser-vices but do relate to them.For example,based on recent trademark applications,McDonalds is planning to operate virtual cafes that offer the ability to order physical-world food to be delivered to you.It will need to be determined if this is use of a mark with a virtual
242、 service or if it is promotion of a physical-world service.In other cases,virtual and physical services may be the same.For example,training services can be provided in both the physical and virtual world.While some providers may provide training services in one realm or the other,there does not see
243、m to be anything inherently different in the services requiring a distinction to be made for trademark purposes.A brand owner providing training services in the physical world should be able to rely on its trademark registration for training services if it chooses to offer training services in the v
244、irtual world.From a different perspective,it does seem possible that there could be confusion between use of a mark for training services provided in the metaverse and training services provided in the physical world.As discussed in Section 2.4,WIPO has taken steps already to designate a place for N
245、FTs in Class 9 under the latest Nice Classification edition.However,this step alone may not address all potential trademark uses in the metaverse with virtual goods and services.This uncertainty raises troubling questions for brand owners relying on registrations in jurisdictions that do not review
246、evidence of use during the examination stage.For example,a brand owner offering digital jewelry may have reg-istrations covering a broad range of goods in Class 9 for downloadable software as well as in Class 14 for physical jewelry,only to find in a cancellation action filed years later that the lo
247、cal Trademark Office does not consider the sale of digital jewelry in the metaverse to satisfy the use requirement for either class.While use of a trademark in relation to a good in the metaverse may differ in its dimensions,the activity represented,and the physical-world equivalent will inevitably
248、be interrelated.A virtual bottle of wine cannot be drunk,but nevertheless,can be used to convey a sense of drinking wine.Use in commerce as a virtual good is effectively related to the underlying purpose that the good represents.Ultimately the interaction and relative importance between physical-wor
249、ld brands and metaverse brands and their goodwill,will perhaps run on overlapping spectrums:22 Fashion takes center-stage in the Metaverse at Decentralands Metaverse Fashion Week,GlobeNewswire(March 23,2022)https:/ INTA|TRADEMARKS IN THE METAVERSEThe more that these two spectrums overlap,the more th
250、at consumers may see the virtual good and the physical world good as interrelated.Consumer recognition and relation of the goods and services emulated in the metaverse to those manifested in the physical world will ultimately have to form a material element of the legal concept of virtual“use.”The c
251、hallenge,of course,is that the relationship will vary depending on the nature of the good or service,the industry,the target con-sumers,and other factors.The metaverse,as a“still in development”proposition,may present new and unique ways for trademarks to be displayed or experienced and for goodwill
252、 to be developed that a trademark office or a court has yet to consider.Governments,trademark offices,and treaty organizations should consider issuing guidance on standards of review for associating trademark use with goods and services in virtual or augmented environments.By way of example,the Trad
253、emark Manual of Examining Procedure(TMEP)issued by the USPTO includes a section with a series of webpage screenshots and mock-ups used to highlight acceptable and unacceptable specimens of use in the context of the Internet.23 One could imagine the USPTO adding a new section to the TMEP with a simil
254、ar series of demonstrative virtual and augmented environments to guide applicants on acceptable trademark use in the context of the metaverse.3.6.How Will Trademark Use in the Metaverse Align with the Geographic Nature of Trademark Rights?As discussed in Section 3.3,the metaverse raises unique quest
255、ions regarding location of trademark use.The issues and questions discussed in that section apply equally to considering the geograph-ic aspect of trademark use.This is particularly important as trademark owners look to develop a registration strategy to protect their trademarks on the various metav
256、erse platforms and to enforce existing physical-world trademark registrations on these platforms.In this paper we have defined the metaverse as a“convergence of our physical and digital lives.”.This definition suggests that,at its full potential,the metaverse would create a blurring between,or a lay
257、ering of,the physical and virtual worlds that could cause us to redefine our traditional ideas on jurisdiction.Trademark owners should carefully review the legal standards applied by every jurisdiction of inter-est with respect to establishing a presence.Considerations could include whether the trad
258、emark owner has any physical presence in that jurisdiction(offices,employees,servers,etc.),targets that jurisdiction,conducts business in the local language(s),and has customers in that jurisdiction.Trademark owners should also keep in mind that conducting business in a jurisdiction may also trigger
259、 requirements beyond those required for establishing trademark rights.For example,entering a new market may create unique obligations,particularly in the areas of privacy,government regula-tion of certain product types or content,and taxation.Here again,brand owners would benefit from guidance from
260、governments,trademark offices,and treaty organizations.In addition,platform providers can aid brand owners by providing user data and other information that reflects the physical locations of servers and other resources that may sup-port a use claim.As noted above,this will likely also raise liabili
261、ty questions for brand owners who should carefully consider whether their engagement with any particular platform may open them to taxation requirements or other legal actions,based on the same theory of jurisdiction trademark owners may rely upon for establishing trademark rights.Another considerat
262、ion for brand owners is how the non-jurisdictional nature of the metaverse may 23 TMEP 904.03(i)et seq(July 2022),https:/tmep.uspto.gov/RDMS/TMEP/current#/current/TMEP-900d1e882.html.30 INTA|TRADEMARKS IN THE METAVERSEconflict with split ownership of a trademark across different jurisdictions.Consid
263、er an international conglomerate with affiliates in the United States,China,and the European Union,each of which holds ownership rights to a common trademark in their respective jurisdictions.The metaverse poses a unique challenge to these related entities insofar as determining which entity control
264、s the trademark when the geographic scope of use is unclear or possibly even impossible to determine.This situation will be even more complicated in the case of adverse parties,each of whom may ac-knowledge the other partys rights to a common trademark within certain geographic boundaries.Brand owne
265、rs will have to consider how and to what extent they can align the use of their trademark rights in the metaverse with physical geographic boundaries.In lieu of direct control over how goods and services travel within the metaverse,brand owners may need to find contractual solutions.For example,comp
266、anies may enter agreements to share costs and profits from metaverse activities connected with common trademarks,effectively creating co-ownership arrangements specific to the metaverse while each party maintains exclusive ownership to those trademarks in the jurisdictions of the physical world.Alte
267、rnatively,similar to the“region codes”used on DVDs,brand owners may attempt to compel metaverse platforms to adopt geographic tracing that would allow brand owners to control when and how their trademarks will appear to users based in different regions.Unless and until such controls can be developed
268、,however,brand owners should prepare for complications to arise from the non-ju-risdictional nature of the metaverse.3.7.What Will Trademark Abandonment Look Like in the Metaverse?The metaverse may raise unique questions with respect to trademark use over time and abandon-ment.As noted above,a signa
269、ture feature of the metaverse is its persistencei.e.,the fact that this space continues to exist and things continue to happen within the metaverse,even when the user is not connected.The fact that virtual objects and avatars may continue to exist and function within the metaverse without any direct
270、 involvement of a user in the physical world means that our conven-tional understanding of trademark abandonment may need to be reconsidered.Depending on the platform,it may be that an avatar or virtual storefront will remain in the metaverse for years or even decades without any clear indication on
271、 the surface that the company or individual behind it has long since moved on.24 In this respect,the persistence of trademarks in the metaverse may be comparable to trademark use on the Internet,where websites and social media profiles may continue years after the owners have either abandoned those
272、websites and the marks used therein,or even ceased to exist.On this point,the USPTO has found that a cached website submitted by the trademark owner did not establish use of a trademark,given evidence submitted by the counterpar-ty that the website in question was no longer active.25 The fact that t
273、he website could still be visited in some form did not mean that the owner was still“using”the trademark or exhibiting the required 24 Recently,an announcement was made by the CEO and founder of the metaverse platform Somnium Space that the service would include a fea-ture allowing users to achieve
274、a kind of“immortality.”John Wanguba,Somnium Space To Offer Immortality Via Live Forever Mode In The Metaverse,E-Crypto News,https:/e- this feature,the platform will collect a wealth of personal data from the user in order to create an avatar of that user,which,after their passing,may continue to int
275、eract with their survivors and decedents,presumably for as long as the metaverse exists.While such features may sound more like science fiction at this point,the possibility raises at least the prospect of a trademark that outlives its owner and achieves something closer in nature to personality rig
276、hts.25 Canine Caviar Pet Foods,Inc.,126 USPQ2d 1590,1593-95(TTAB 2018).31 INTA|TRADEMARKS IN THE METAVERSEsufficient intent to resume use that is necessary to avoid abandonment.The difficulties that arise in these situations are not limited to trademark owners,but third parties as well.Brand owners
277、will need clarity on the amount of engagement with their virtual counter-parts that is necessary to demonstrate that their use is“active.”Third parties seeking to clear new trademarks will also need guidance on whether persistent objects in the metaverse reflect active trademark use or merely phanto
278、ms of past activity(akin to a cached website or inactive Facebook account).Platforms may be able to assist third parties by making user information available,such as by(a)indicating the last time a user updated or activated a persistent virtual object or avatar and(b)implementing policies on clearin
279、g out“abandoned”objects or avatars after a certain period of user inactivity.Governments,trademark offices,and treaty organizations are also encouraged to issue guidelines directed specifically to the standards for determining whether trademark use in the metaverse is“continuous.”It is probably not
280、premature to consider whether trademark use conducted entirely by artificial intelligence in the metaverse will constitute“use,”given the possibility that persistent avatars may operate independently of any human input.3.8.Further Considerations Regarding Trademark Use in the Metaverse The discussio
281、n above is not exhaustive of issues that will arise around questions of trademark use in the metaverse.In the physical world,trademark use is defined by the laws and regulations of the jurisdiction where registration is sought.See the discussion above in sections 3.5 and 3.6.Due to the varied nature
282、 of the different platforms that currently make up the metaverse and the lack of national boundaries in this virtual world,does use on all or some of the platforms constitute use in all jurisdictions?Are the contractual terms and other governing policies between metaverse plat-form operators and the
283、ir users(“Terms of Service”or“TOS”)controlling on this question?Should we be looking to governments and big technology companies like Facebook and Microsoft to create a global frameworka meta jurisdiction with rules that may be enforced by many stakeholders and not just states?And how might this new
284、 regulatory framework interact with national or territorial laws and govern the use of marks within the metaverse and the physical world?How might our common understanding of“use”in the metaverse evolve over time?Will trademark use in the metaverse provide evidence of fame and recognition of a trade
285、mark in the physical world,and vice versa?Or will the divide between use in physical and virtual environments render the goodwill in one space irrelevant to the other?For all the opportunities the metaverse opens up in terms of new forms of trademark use,the metaverse also creates opportunities for
286、fraud.Even in the case of good faith trademark use,it is entirely possible that two users in the same virtual world space may experience digital features dif-ferently,rendering verification of trademark use far more difficult than in the physical world.Much like personalized ads are used on the Inte
287、rnet,experiences can be personalized on metaverse platforms,for example,as a result of personal subscriptions,such that one user may see different brands than the next.Given the ephemeral and evolving nature of the metaverse,conditions may be ripe for applicants to doctor or simply misdescribe speci
288、mens.Brand owners will have to be mindful and consider whether the adaptation of their marks from the physical world or the“2D environment”of the Internet satisfies,e.g.,the“substantially exact 32 INTA|TRADEMARKS IN THE METAVERSErepresentation”standard applied by the USPTO or the“distinctive charact
289、er”standard applied by the EUIPO for European Union Trademarks(EUTM).Likewise,governments,trademark offices,and treaty organizations should consider whether their guidelines on trademark use adequately address the use of marks in virtual spaces,particularly insofar as those spaces need not mirror th
290、e physical world contemplated by current legal standards.These entities may provide some stability to the metaverse by establishing clear and explicit policies that(a)trademark use equivalent to Internet use(for example,similar to the examples provided in the Trademark Manual for Examining Proce-dur
291、e.by the USPTO)will also suffice in the metaverse,and(b)minor differences in a trademark at-tributable to different technical standards between platforms will not impact the trademark rights of a brand owner who is active across platforms.Since these policy proposals are based on our under-standing
292、of trademark use in the pre-metaverse world,further study will be necessary to account for how brand owners and consumers actually function in the metaverse.Trademark use in the metaverse may not always resemble trademark use in the physical world.It is unclear how consumers will engage with virtual
293、 goods and services,and therefore how brand owners can clearly associate their trademarks with their products.Since proper trademark use is necessary to support trademark rights,brand owners should pay close to attention to(a)how their trademarks appear across platforms in the metaverse,and(b)how tr
294、ademark offices and courts interpret trademark use in the metaverse.Trademark offices likewise should consider how current trademark laws and policies may need to be updated to reflect how consumers typically experience and understand trademarks for virtual goods and services in the metaverse.In the
295、 meantime,brand owners entering the metaverse should(a)try their best to emulate acceptable trademark use in the physical world and the Internet,(b)be mindful of the technical differences and different Terms of Services between platforms,and(c)keep in mind that the metaverse is not bound by jurisdic
296、tional boundaries.4.Trademark Licenses While many of the other sections of this paper highlight questions for governments,trademark offices,and treaty organizations,it is brand owners and their licensees who will be on the front lines of answering many of the new questions raised by the metaverse wi
297、th respect to trademark licenses.Of course,brand owners,by themselves or through licensees use,will need to establish the necessary rights to license to others(See the discussion above about the registration and use of trademarks in the metaverse).Some common trademark license topics are covered bel
298、ow,but trademark owners and their licensees should explore all details of their relationship in the current and future metaverse landscape.Many decisions about license agreements will depend on the specific details of each party and the licensed marks;there do not appear to be many“default”approache
299、s.It is far better to proactively reach an agreement to avoid disputes,but the parties need to be flexible and recognize that it is impossible to anticipate how the issues created by future incarnations of the metaverse will impact their relationship.This will require frequent and detailed Key Takea
300、ways33 INTA|TRADEMARKS IN THE METAVERSEconversations between the parties.4.1.Licensed Goods and Services As discussed above,it is both important and challenging to describe the goods and services for which a mark is licensed in the metaverse clearly.Licensors should specify if the licensed goods or
301、services include both physical and virtual goods or services,or if one“world”is excluded from the license grant.In addition,new types of rights and contracting models used in connection with NFTs further blur the lines between the goods and services licensed for use with a particular mark,and which
302、rights are owned versus licensed.26 Brand owners who use the Nice Classification System to define the scope of the licensed trademark rights will need to consider whether they will continue to follow the System for goods and services in the metaverse while governments determine how to classify these
303、 goods and services,or whether,in the meantime,they wish to clarify whether or not the scope of the license grant includes virtual counterparts to physical world goods and services.4.2.Territories Trademark licenses typically define a geographic scope of the license granteither worldwide or in some
304、defined subset of the physical world.Where the license grant is less than worldwide,that could be because the brand owner does not want to market licensed goods or services in excluded jurisdictions,or it has already licensed its trademark rights in some or all excluded jurisdictions.In these early
305、stages of the metaverse,brand owners will need to balance precision with flexibility.While it seems wise to identify the specific platforms on which its trademarks are licensed for use,brand owners will also need to anticipate new platforms and forthcoming interoperability among platforms4.3.Existin
306、g Licensees4.3.1 Licensees with Worldwide RightsWhere a current licensee already has worldwide rights to use a trademark with certain licensed goods and services,the nature of the good/service would seem to dictate whether the existing li-cense grant includes the metaverse.However,brand owners and t
307、heir licensees should discuss this to make sure that they are aligned.4.3.2 Licensees with Less Than Worldwide RightsWhere a current licensee has rights to a specific,limited physical-world jurisdiction,it seems im-practical to extend those rights into the metaverse.Often,in this case,the brand owne
308、r has granted rights to use the same mark with the same goods or services in the excluded jurisdictions to another party or retained those rights for its own exploitation.Brand owners will need to discuss with their 26 See the International Trademark Association NFT White Paper(2022)for a detailed d
309、iscussion of the goods and services covered by NFTs,the classification of the NFT itself as a separate asset,and different approaches to ownership and licensing of intellectual property rights in NFTs.34 INTA|TRADEMARKS IN THE METAVERSElicensees whether to expand the license grant to include the met
310、averse,in such a way that avoids overlapping grants with their other licensees.4.4.Channels of Trade Brand owners and their licensees will also need to reevaluate how they identify channels of trade in their license agreements.Many current license agreements distinguish between sales through online
311、channels and brick-and-mortar channels.As discussed in Section 3 above,these traditional distinctions are blurred by the metaverse.May a licensee who is authorized to sell only through brick-and-mortar outlets sell licensed physical goods through a 3D store in a virtual world?In the near term,brand
312、owners may need to specifically describe licensed channels of trade related to the metaverse(or specifically exclude them)in their license agreements.For example,they may choose to identify specific metaverse platforms on which real or virtual goods bearing their marks may be used,until new norms fo
313、r terminology(e.g.,online vs.brick-and-mortar)are established that are commonly understood by all parties,trademark offices,and courts.In addition,brand owners may use technology tools in the metaverse such as the blockchain to restrict where licensees display their marks.Licensees planning to offer
314、 licensed goods or services in the metaverse will need to determine if their plans to expand channels of trade are permitted by their license agreement,and also confirm that any technology tools used by their licensors will not interfere with such plans4.5.The Licensed Mark As in any trademark licen
315、se,brand owners should specify which of their marks are covered by a li-cense agreement.By its very nature as a digital world,the metaverse may make defining the mark a more complex process.The technical standards for things such as supported colors and resolution on the various metaverse platforms
316、will influence how trademarks will be seen and heard by con-sumers.Brand owners will need to consider what modifications will be allowed to their trademarks to enable use in the metaverse and what translations/transliterations will be permitted,both in written and aural forms.4.6.Quality Control/Tec
317、hnological Controls Brand owners must develop and enforce standards for the quality of licensee goods and services provided in connection with their trademarks.In the metaverse,brand owners will have additional tools available to them,as they may provide some or all of the digital files necessary to
318、 display their marks and use smart contracting on a blockchain to enforce how and when they are displayed.This likely will require increased participation from technical advisors who can work with the capabilities and limitations of each metaverse platform.4.7.Governing Law and Forum Parties should
319、choose governing law and forums carefully for their metaverse trademark license agreements.In addition to jurisdictions with logical connections to the agreement(or jurisdictions with laws that do not require such connections),parties should monitor courts to see which courts have frequent experienc
320、e considering such issues and develop subject matter expertise.35 INTA|TRADEMARKS IN THE METAVERSE4.8.Enforcement Trademark owners and licensees will need to coordinate with each other on enforcement of trade-mark rights in the metaverse.For infringement in the metaverse,this will include determinin
321、g who may file a complaint under the metaverse platforms trademark abuse policies and who has the information necessary to support the claims.In addition to traditional trademark enforcement tools,much of the rich functionality of the metaverse will be enabled through the use of smart contracts.The
322、use of blockchain or ledgering technologies can enable brand owners to authenticate use of their trademarks where the proper credentials have been supplied.4.9.Additional Considerations Brand owners should also be mindful of any trademark rights granted to the operator of the metaverse platforms in
323、their terms of service and whether those grants align with the brand owners business goals.The description in the platform terms of service of the specific intellectual property assets and the rights granted therein may not be as clear as brand owners would prefer.Brand owners and licensees should b
324、oth take a fresh look at the terms of existing and new trademark license agreements to cover new issues raised by the metaverse.Brand owners and licensees will also need to monitor changes in statutes,case law,and trademark office practices,and adjust their license agreements appropriately.5.Infring
325、ement in the Metaverse The greatest challenge posed by the metaverse is how a virtual world can exist within a real-world legal framework and,importantly,what that framework should comprise?It is worth first looking back to what happened with Second Life,the virtual reality world created by Linden L
326、abs that allows people to create an avatar and have a“second life”in an online virtual world.Second Life was launched in 2003 to much acclaim as a visionary new concept.Linden Labs required every user to sign up to its Terms of Service Agreement,which included the following provisions:“Users of the
327、Service can create Content on Linden Labs servers in various forms.Linden Lab acknowledges and agrees that,subject to the terms and conditions of this Agreement,you will retain any and all applicable copyright and other intellectual property rights with re-spect to any Content you create using the S
328、ervice,to the extent you have such rights under applicable law.”Key Takeaways36 INTA|TRADEMARKS IN THE METAVERSEClause 4.1 of the Terms of Service stated that the user agreed to a number of terms preventing ille-gal practices,including agreement not to;“(i)take any action or upload,post,e-mail or ot
329、herwise transmit Content that infringes or violates any third-party rights;(ii)impersonate any person or entity without their consent,including,but not limited to,a Linden Lab employee,or falsely state or otherwise misrep-resent your affiliation with a person or entity;(iii)take any action or upload
330、,post,e-mail or otherwise transmit Content that violates any law or regulation;”Linden Labs also required the user to comply with the processes laid down in the Digital Millennium Copyright Act 1998(the“DMCA”).Linden Labs own compliance process states that it will respond to any notice lodged in acc
331、ordance with the DMCA by removing infringing content.So,an IP infringement can be addressed as a breach of the Terms of Service or as a breach of an intellectual property right under the relevant statutory provisions governing that right.We will turn to the thorny questions of which legislation will
332、 apply and from which jurisdiction,for the purpose of enforcement,below.Second Life has encountered widespread IP infringements.Films have been shown in Second Life without any license,fake virtual Ferraris have been sold,Herman Miller(the furniture designer com-pany)established a virtual world pres
333、ence in response to sales of infringements of its designs online and Playboy instigated an investigation into infringement of its trademarks on Second Life.Despite this,there has been little litigation over virtual world activity.One of the few examples came from Eros LLC(Eros,LLC v.John Doe,case no.2007cv01158,2007,US District Court for the Middle Dis-trict of Florida).Eros created and sold the S