What you need to know (in a nutshell)

1. The emergence of the metaverse and virtual reality platforms may mean trademark owners need to rethink their existing filing and enforcement strategies.

2. Nike and other well-known brands have recently applied for a range of new trademark applications covering downloadable virtual goods. This is a good indication that they may be preparing to enter the metaverse.

3. It is likely that trademark owners will need to apply separately for downloadable virtual goods if they already own the rights to those goods or services in the real world.

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As the use of the term "metaverse" becomes more common and virtual reality technology advances, business owners may need to reconsider their trademark filing and enforcement strategies. The metaverse is a virtual world accessed through computers, smart devices, and AR/VR technologies, and companies like Meta Platforms Inc. (formerly Facebook Inc.) are working on developing ways for people to use it for a variety of purposes, including for work and entertainment.

It's important to consider expanding your trademark filings to include virtually downloadable goods and secure rights in the metaverse. Nike Inc. recently applied for a suite of new trademark applications in the US, covering various goods and services in classes 9 and 42, including virtual goods. This indicates that they may be planning to enter the metaverse, potentially by offering a virtual reality shopping experience. Alternatively, the applications may be a defensive strategy to protect against infringing use of their marks in the metaverse or on non-fungible tokens (NFTs).

It's also important to consider how the use of trademarks in the metaverse may affect your rights. The metaverse creates virtual settings that mimic the real world, allowing participants to interact with branded products. However, it's unclear whether the use of a trademark in the metaverse would infringe on the rights of the trademark owner for those equivalent goods in the real world. This question has not yet been tested in court, but it's likely that a similar process and rationale will be used as is currently applied for online infringements. Therefore, it may be necessary to apply for separate trademark protection for virtual goods if you already own the rights to those goods or services in the real world.

The sale of virtual goods in the metaverse may affect a trademark owner's rights. In a hypothetical scenario, Person X creates a metaverse dating experience where users can purchase virtual clothing items as non-fungible tokens (NFTs) to wear on their virtual dates. If some of these NFT items are luxury branded clothing that are registered trademarks of third parties, the promotion and sale of those NFTs could potentially infringe on the trademarks that appear on the clothing. This is similar to online retail sales, where the use of a trademark on virtual goods could be considered infringement. However, virtual goods like software are not considered to be goods of a similar description to physical clothing, so trademark protection may not be necessary. It's therefore advisable for brand owners to consider extending their trademark filings to include virtual goods and/or services in order to protect their rights in the metaverse. This is likely to be of interest to high-profile brands globally, assuming their existing trademark portfolios do not already provide sufficient coverage.

While the popularity and uptake of the metaverse are currently uncertain, both appear to be gaining momentum. For high-profile brands in the consumer goods market, securing trademarks in the metaverse may be a smart move, both as a way to get a foothold in this emerging space and as a defensive strategy against potential infringers. This is especially true in countries where trademark squatting is common and early filing is important, such as China. While the full potential and future uses of the metaverse are still being explored, it's possible that it could become commonplace in the future.