NFT-Enhanced “Metaverse”: Counterfeiting and Intellectual Property Issues

TheVirtual 3D promises to be the fourth era of computer technology. The MetaverseIn fact, it should not be considered limited to models that depict it as an immersive virtual environment^{but above all it presents itself as a Reinterpreting Internet technologycapable of replacing all existing mobile devices, generating new technologies and changing human behavior.}

A technological breakthrough is not without problems, even in the field of data protection and intellectual property.

Metaverse will be in a thousand sectors: here are all the possibilities for action

In this universe, as it already happened, the 3D simulation He will allow us to do so Advance evaluationFor example, the effects of building construction on traffic, safety and even the city’s climate, later to become a tool based on “cloud” technology, suitable for transforming the planet into a giant digital platform.

Given the problematic aspects of this technological breakthrough, the The metaverse will exacerbate already existing problems in the digital age That is, among the many conceivable contradictions, we will find the online spread of inaccurate information or news (fake news), with the extremes inherent in the attitudes of those who adhere to such disinformation. Big problems will also arise in connection with Data and information protection Both private and corporate. To these topics will be added many issues related to Intellectual property protection.

Counterfeiting in Metaverse

In the context of critical scenarios that may be related to industrial property rights that will flow into the metaverse, he assumes a central role Use of company hallmarks. If it’s true that “fashion lands in the Metaverse,” even with the creation of the first “Metaverse Fashion WeekThere is no doubt that the products of the most famous brands can also be vulnerable to fraud When worn by the millions of “avatars” that will crowd into virtual reality.

and the Illegal virtual reproduction of a protected good Today it seems much easier than a physical good, which makes it difficult to ascertain potential rights violations on designs and brands of clothing, belts, handbags and all other goods sold on online platforms for the virtual world.

If the tombstone infringement aspect emerges as a satisfactory element of property rights, the rights holders will have to do so. arrange for their registration To get his protection also in the virtual world that will be able, through a simple extension of the existing physical world, to become a digital world in its own right.

The World Intellectual Property Organization (WIPO) has already developed some studies to advocate for rights holders Make their registrations of industrial property rights for use in the metaverse^{also in order to prevent ill-intentioned third parties from carrying out offensive registrations themselves at the expense of the actual rights holders.}

Court precedents with NFTs

The possibility of possible infringement of rights on the trademarks and products of others by the medium of new virtual realities, including the metaverse, has already been subject of some legal proceedings – Especially in the United States – that pertains Marketing NFTs.

Particularly interesting, in terms of the legal principles that emerged during the litigation, is the provisional decision of the US District Court of New York by Judge Jed S. Rakoff on May 18, 2022, which sees plaintiffs face to face,”Hermes International and “Hermes of Paris, Inc.” (“Hermes”) and the defendant “Maison Rothschild” (“Rothschilds”).

These are questions of only American justice, it seems, as it examines issues related to freedom of expression, the protection of distinctive marks, the qualification of works of art, topics that are necessarily reflected in all legal systems in the world, while also bearing in mind that the technology of virtual digital markets seems to be rooted, At least for now, mainly in the USA

Metabirkin case in New York court

The subject matter of the said lawsuit can be summarized as follows: In the month of December 2021 Rothschild She has created some digital images that reproduce Hermès’ iconic luxury “Birkin” bags, housed in a faux fur version. These representations have been called titled “metaperkin“ ^{One of which was created Collect 100 sampleseach of which is numbered from 0 to 99. These digital images have been reproduced using blockchain technology in Many NFTswhich went on sale on four different digital platforms and promoted for sale on major social networks.}

According to the Rothschild theses, the artistic purpose of this process is to honor the most famous handbag, as well as the most unique and best quality, that exists in the world, It gives life to a work of art And not to a series of fakes of a famous brand, as Hermès had supposed.

On the other hand, the point of fact presented to the judge by the French fashion house is completely opposite to that presented by Rothschild in court, arguing that the former had committed an infringement of his trademark “Birkin”. In fact, Rothschild had infringed Hermes’ patent rights Like Lanham’s law^{the commercialization of the trademark “MetaBirkin” for the purpose of using a trademark owned by Hermes by combining it with a set of products carried on NFTs attributed to it.}

However, in Rothschild’s view, because they are works of art, the use of the name “MetaBirkin” would be lawful under the First Amendment to the United States Constitutional Charter, consistent with the principles outlined in the Rogers vs. Grimaldi – MGM/UA and PEA^{which recognized the inapplicability of the Lanham Act in certain cases, and which is subject to specific scrutiny by the courts, on a par with the First and Fourteenth Amendments of the United States Constitution which relate respectively to freedom of thought, the right of all to non-discrimination, and to fair process.}

Judgment in the Metaperkin case

The New York Court, after evaluating the arguments of the parties, in its above-mentioned decision has recognized for NFTs Offered for sale by Maison Rothschild Exclusion from trademark protection They belong to the Hermes appellant because they are works of art.

At the same time judge Rejection request not accepted.i.e. requesting a complete rejection of the requests proposed by the defendant, motivating this decision with the fact that there is a possibility that the Hermes procedure The foundation is on different grounds than protecting the name of the artworkThat is, on the basis of jurisprudence that protects the commercial use of the French fashion house’s distinctive mark.

In fact, NFTs that were matched against a digital file of a “Birkin” handbag would be subject to potential use in the metaverse, and thus are resolved in Non-speech use (i.e. not only related to freedom of thought or artistic expression) of the digital images it reproduces. If, according to the court, such possible use of the “MetaBirkin” classifier was made by the Rothschilds, then an analysis of the legality of such use should be made, based on the models established by the Polaroid Corp. ruling. v. Polarad Electronics Corp. surrendered on February 28, 1961 by the New York Court of Appeals^.

In this resolution some The exact rules regarding the determination of damage caused by the use of a competing trademarkEqually, if its user extends its use to a product sector that was not considered before, as happens in the case of “MetaBirkin” transferred from NFTs to the Metaverse.

conclusions

Although – in the opinion of the author – the opinion of the New York court provides an entirely unconvincing explanation for the Rogers ruling for extending its conclusions to the Hermes/Rothschild case, ^{This important controversy directs our attention to a number of legal issues that need to be addressed in the near future.}

What will be the fate Use pictures depicting well-known personalitiesthose pieces of music interpreted by people who will move in the virtual world or clips taken from famous cinematic works, or still readings of books, poems, drawings and graphic works that will appear in the world of the new metaverse?

Topics are added to these questions internet competence, It is often addressed but not fully resolved, above all in cases where it is difficult to identify the fakers and where the crimes took place, as it happens in the virtual world.

Meanwhile, to the top 10 cases currently pending before US courts in the field of intellectual property and the metaverse, more will be added in an effort to create Stronger principles of intellectual property protection.

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NB

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