Questions remain regarding the registration of trademarks in the metaverse

As more big brands develop their own metaverses or join existing ones, new issues have arisen in the protection and enforcement of trademark rights in these unchartered virtual worlds.

As part of its global metaverse trademark portfolio, Nike’s applications in Taiwan for some of its most valued marks (including NIKE, JORDAN, the ‘swoosh’ logo, and the slogan ‘Just Do It’) to be used in metaverses are currently under the examination of the Taiwan IP Office (TIPO). According to our search of TIPO’s public database, the designated goods and services in these Taiwan applications are:

• Class 9: Downloadable virtual goods, namely computer programs featuring footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use online and in online virtual worlds;
• Class 35: Retail store services featuring virtual goods, namely footwear, clothing, headwear, eyewear sports bags, backpacks, sports equipment, art, toys and accessories for use online; online retail store services featuring virtual merchandise, namely footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories; and
• Class 41: Entertainment services, namely providing online, non-downloadable virtual footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use in virtual environments.
• Some of these applications have received Office Actions since May 2022, in which TIPO requested amendment of the description of goods and services. TIPO’s amendment suggestions are as yet unknown, as are Nike’s responses. It remains to be seen whether and how the above style of description of “virtual goods/services” will be accepted by TIPO. 

At this moment we can only say that, although not party to WIPO, Taiwan adopts the Nice Classification for categorising goods and services, while dividing the Nice Classes into sub-classes and different groups based on local practices. However, TIPO has yet to issue any specific guidelines about how trademarks to be used for “virtual products and services” can be filed for protection. Nor has this question been answered in any guidelines from TIPO; for example, should “virtual clothing and footwear” be categorized in Class 9? Are they related to the goods “real clothing and footwear” in Class 25? These questions will probably be addressed on a case-by-case basis before the next update of the Trademark Examination Guidelines and the sub-classes.  

Meta or metaverse-formative marks

According to the data released by TIPO, applications containing the word ‘meta’ or ‘metaverse’ have been on the rise since 2021. However, are these marks registrable?

Under Article 29.1 of the Taiwan Trademark act, a mark that is merely descriptive and consists exclusively of a description of the quality, intended purpose, material, place of origin, or relevant characteristics of the designated goods or services cannot be registrable since it is devoid of distinctive character.

Our search into TIPO’s online database reveals that the office has questioned the inherent registrability of some meta or metaverse-formative marks, considering that they are descriptive of the designated virtual goods and services. Under the local practice, an approach to enhance the registrability of such marks is to file them in combination with other distinctive words/devices or prove the existence of a secondary meaning through use.

Further, if a meta or metaverse-formative mark is to be registered in respect of physical non-digital products, such as cosmetics, the chances of successfully registering metaverse-formative marks will be increased because the source of the product (rather than the product itself) is adequately identified. 

Trademark and copyright infringement issues in metaverses

Unsurprisingly, legal issues may arise when virtual goods bear trademarks that have been registered in the real world, for example a virtual avatar wearing clothing that bears real-world fashion-brand logos. When a mark registered in relation to “real clothing” in Class 25 is being used on “virtual clothing” in the metaverse, it is possible to mislead consumers into believing that the virtual clothing is offered or licensed by the real clothing company, namely the trademark owner.

Whether and how Taiwan’s IP rights system ― which was originally designed for the real world ― can be adapted to apply to a virtual world is not yet known. Under current practices, it is unclear whether the use of a trademark in respect of a virtual product constitutes use in respect of a real-world product covered by a trademark registration. For the sake of prudence, conducting a trademark availability search is imperative for a metaverse developer before launching a virtual product in its metaverse, in order to avoid inadvertently infringing upon another mark.

If a stylised brand satisfies the originality and creativity requirement, it is entitled to copyright protection in addition to trademark registration. Accordingly, unless a fair-use defence can be established, unauthorised reproduction of a trademark eligible for copyright protection on virtual products used for their avatars in the metaverse will likely lead to copyright infringement in Taiwan.

These are just some examples of legal issues already posed by metaverses, while other factors such as jurisdiction and contractual or privacy issues will surely complicate matters further as metaverses continue to evolve and challenge the established legal landscape absent of any precedents. It remains to be seen whether, and how, legal regimes designed for the registration of trademarks in the real world will extend to the virtual world.