Metaverse: New Era In Trademark Law

As the Metaverse universe enters our lives rapidly, it brings along many questions. It remains unsolved how the legal connection between the real world and the Metaverse universe can be established. The most common cases where Intellectual Property meets the Metaverse can be seen in the field of trademark law as the trademark owners are seeking to strengthen their places in the Metaverse market. As the market booms, many problems and questions are raised on the enforcement of the rights, detect infringement and how the existing trademark rights will be sufficient.


The Metaverse refers to a collective virtual sharing space created by the combination of physical and the digital realities. The concept has entered our lives for the first time in Neal Stephenson's science fiction novel Snow Crash in 1992 which is now defined by Mark Zuckerberg, the founder of Facebook, as: " it is a virtual reality that aims to replace the internet, connect virtual life with real life, and create endless new playgrounds for everyone.’’ It would be a limitation to define the Metaverse as a single platform as it could be defined a virtual reality experience created in parallel to real life, aiming to create an online reality experience for its users and consisting of many multi-layered universes in the simplest terms. The Metaverse universe continues to enlarge as the technology progresses and the borders of this universe will continue to grow. Virtual reality understanding in today's world, can only be experienced by the sense of sight and by hearing through certain equipment; however, in light of the upcoming technological developments, it is expected that people will spend more time in the Metaverse universe rather than in the physical world.

The popularity of the Metaverse has increased and many of the trademark owners have started to create virtual stores in the Metaverse and started to sell their goods using their trademarks. As the customer interaction increase in the Metaverse universe, they engage in commercial use of the brand which is why an obligation to evaluate this commercial use and its consequences within a legal perspective also arises. The existing regulations are limited only to cover the physical goods of the trademarks, but how the necessary protection for digital goods and services can be achieved is the question in minds.


The main objective is that the results of a trademark application in the physical world and the results of the same application in the virtual reality universe cannot be the same The trademark, which is protected by the trademark registration, grants protection to the trademark owner within the borders of the country where it is registered and for the class of goods and services in which it is included. However, when we consider a possible infringement and its consequences in the Metaverse universe, all companies, regardless of their size, may have to reconsider their existing trademarks and apply for a trademark application to cover their virtual products to obtain additional protection in the Metaverse universe.


Companies such as CVS, Walmart, and Mcdonald's who aimto secure their places in the digital universe, are filing trademark applications for the Metaverse universe as their existing trademarks only cover their physical goods. Even if the virtual goods are produced based on the physical good, the virtual goods displayed in the Metaverse universe cannot be granted with the same protection which is why the  companies are filing additional trademark applications in order to cover their goods and services in the virtual world and  to prevent potential infringement. The perfect example is McDonald's, who are planning to open a virtual restaurant in the Metaverse  and to display their virtual products have filed ten different trademark applications covering the goods and services to be provided. These trademark applications include downloadable virtual food and beverage products, virtual restaurants, as well as other virtual events such as virtual concerts.  Additional applications are not only seen in the food industry but also can be seen in the fashion industry as several fashion giants, such as Hugo Boss, Tommy Hilfiger, Champion, and Versace, are filling commercial trademark applications for the Metaverse universe. The companies aim to offer customers in the Metaverse virtual products such as clothes, shoes, and hats, as well as virtual fashion shows where they can introduce their virtual products to their customers.


The EUIPO classifies these applications, as digital assets, and considers it appropriate to treat them as digital content or image within the scope of Class 9. The classification of these virtual goods is based on that these products are basically digital programs and; the digital programs are included in Class 9 of the Nice Classification. Therefore, every virtual good, regardless of its content, is considered within the scope of Grade 9.  As the term "downloadable virtual goods" does not give a clear understanding of the content of the goods in question,the EUIPO believes that the content of the virtual product should be specified in the applications with additional descriptive expressions such as "virtual clothing, virtual food". It is likely that trademark infringements that occur in the physical world may also arise in the Metaverse universe. In the case of unauthorized use of a virtual product protected by a registered trademark, the determination of the place where the infringement occurs is one of the uncertainties regarding the infringement examination. As a matter of fact, since trademark infringement is evaluated within the scope of the relevant legislation within the borders of the country where the infringement occurs,the registration provides protection only within the borders of the country where it is registered. It is not practical for a trademark owner to obtain a protection for his trademark  all around the world. Therefore, in our opinion, it is the right approach at this point to consider the downloadable virtual goods in the Metaverse universe within the scope of the protection of existing trademark applications covering physical products. 


Furthermore, another possibility for trademark infringement is to obtain a commercial benefit from the unauthorized use of registered trademarks in the Metaverse universe. The dispute between Hermes and digital artist Mason Rothschild is one of the most recent cases in this regard. Mason Rothschild has converted digital images of Hermes' iconic Birkin bags into NFTs and  offered them for sale on Metaverse. In response, Hermes has filed a lawsuit against Rothschild for trademark infringement and dilution,  by alleging that they had neither authorized nor permitted Rothschild to commercialize the Birkin NFTs. The case is currently pending in New York Federal Court. Although there is no detailed regulation on digital assets yet, the Hermes case will have an impact on the future of NFT's.


In addition to this, Intellectual Property Law No. 6769 ("IPL") requires that the registered trademark must be used for a period of 5 years without interruption by the owner of the trademark. Therefore, the issue of when trademarks registered in Class 9 will be used in Metaverse for commercial purposes is crucial at that point. The registrations that are not immediately used  but filedin order to prevent the usage of the same or similar phrases by any third parties in the future , need to be careful in this regard. Otherwise, the use of the trademark in the physical universe can not be considered as valid in the Metaverse universe and  the trademark will be vulnerableto cancellation for not being used. 


Thus, all these considerations are still not adequate for the dynamics of the current time. Trademark owners rely on the additional protection to prevent the unfair use of their real-world trademarks for commercial gain in the Metaverse as they are looking for possible solutions against potential problems such as the risk of confusion and tarnishing the brand name. Being aware of the situation, EUIPO plans to step up on this issue and publish a guideline in 2023. Although the Turkish Patent and Trademark Office has not yet carried out any studies in this area, we see that applications for the 9th class, which includes the phrases "Metaverse" and "virtual", are currently increasing. As the presence of trademarks in this virtual world increases, it is inevitable but to develop more effective protection methods. As the virtual universe is emerging and enlarging on the daily basis , it is a discussion whether the current regulations are capable to keep up and if the laws in force will be sufficient to detect potential infringements of rights with more people now entering the Metaverse.  At this point, it is better to follow the latest updates in the intellectual property world closely and to await the new regulations.