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INTELLECTUAL PROPERTY RIGHT REGULATIONS AND METAVERSE

Introduction

First, let’s understand what is metaverse. When broken down etymologically, ‘meta’ means ‘beyond’[1] or ‘change’ and ‘verse’ means a ‘universe’; consequently, connoting to interpret itself as a platform of a world to go beyond bounds and implement things as we imagine.

Similar to the concept of the internet, Metaverse also runs in a likewise manner where several virtual reality floors are collectively connected to the perceived virtual universe. In a similar sense, it also requires the user to sign up, login in and connect to the virtual world through a headset, through which he plugs into the objects and the things in that screen world and interacts just like how one can do physically.

We can create avatars, purchase lands through cryptocurrencies, share names and buildings and incredibly almost many and so on.[2]

Status Quo of Metaverse:

As the metaverse is in its era of just stepping its foot now, it is still in the phase of development. Despite still growing, it already has a foothold in several sectors with gaming being the lead them. In addition, several entities are eagerly involving themselves with this new evolving technology.

Hence, the developing metaverse can technically can be recognized as a clouding up “society” in itself which involves a whole set of rights, responsibilities, regulations and remedies as part and parcel. In a society, the regulating codes, or (simply) law engages a predominant position to hold the order of the conduct of the mob to run smoothly. This calls for Ubi jus ibi remedium (there exists a remedy for every wrong committed) i.e., to provide remedies for breaches of regulations. There may arise several troubles associated with this ‘upgraded internet’ some being anti-competition, defamation, privacy violation etc. and a host of IP issues in trademarks, copyrights and patents.

IP Laws:

Intellectual Property laws provide time-bound rights and protection to the owners and inventors or creators of the intangible properties (corpus mysticum) that are formed out of one’s creativity; provided that the requisite fees are paid within the prescribed time without lapsing the limitation period.

Trademark codes protect the goodwill of the registered and well-established marks from getting imitated or misappropriated.

Copyrights envisage the rights of the authors of literary artworks and the performers’ rights to their performances from getting used for profit without proper compliance by third parties.

Patent laws provide for the monopoly rights to the inventor or owner who created the new invention after ensuring that it cleared the needed essentials to be qualified to be a patentable invention. The three-thronged essentials for a creation to be qualified to be a candidate for the patentable invention are:[3]

  1. Novelty- Having an element of being new from what is already existing,
  2. Non-Obviousness- There must be an incremental improvement for the invention and it should display itself as non-obvious from the rest of its similar entities to a person expert in that field, and
  • Industrial Application- It must serve as a useful tool for which it was invented.

Regulating the intangibles in the virtual platform is not an unfamiliar idea, such as the copyrights for the visual components and trademarks for the player parts in video games.[4] Though bringing it to the floor of the metaverse is still new, it still has the scope to advance and develop given the number of issues and scrutiny that are faced by the regulatory bodies.

Trademarks:

Companies seeking to obtain a trademark for their virtual goods and services have to register as soon as possible, as trademark registrations basically follow Prior tempore potior iure (First in time, greater in right).[5]

There have already been many companies, especially in the fashion, cosmetics and entertainment faculties who have implemented broad filing programs, for instance, Nike and Converse, the footwear giants have filed a lot of applications which are yet in stock for scrutiny, parallelly which helps to set the road map for the potential trademark registrations for the virtual commodities.[6] Down this lane, there are international classifications of goods and services which provide certain classes for downloadable virtual goods. As these applications running for long pages are scrutinised more and more, they are inclined to get better standardised and the guidelines more generalised for the upcoming applicants, yet it will come off as an underlying burden for the authorities.[7]

Copyrights:

The metaverse constitutes the interaction of users with their avatars with other people across the world socially and economically. The NFTs (Non-Fungible Tokens) here play an immensely prominent role in aiding the smooth play of these activities. NFTs simply are irreplaceable digital assets that have unique attributes that are very distinguishable from others. They can be referred to as original and one of a kind that owes their uniqueness to the cryptographic feature. They harness this attribute of theirs, to be non-interchangeable from blockchain technology, typically for the entertainment industry such as images, gifs, videos etc. These formats will be embedded in these tokens which lock their originality as a certificate with the cryptocurrency coins so that they cannot be altered and stays protected.

Hence, this naturally feels like created exclusively for protecting the intellectual properties of the owners. More than this, NFTs have an even closer connection with copyrights. Any use of any recording or a clip that is embedded in an NFT will have to obtain prior approval and authorization from the copyright holder of that work. Further by interpreting the Berne Convention for the Protection of Literary and Artistic Works, says that the countries must grant the creators with copyright protection for their work in any form of expression. This makes it clear that any work protected in the digital form (such as in NFT or in display in the metaverse) comes within the purview of seeking protection and thus needs prior approval to have it used by any other third-person user.[8]

Despite these, NFTs are undeniably a recently developed phenomenon, thus it still being understood and laws to deal with them are slowly getting formulated, both in domestic as well as in the international forum.[9]

Patents:

As mentioned above patents can be granted to the inventions after their clearance of the required essentialities and procedures.  As for patent grants for the metaverse environment, they can be endowed both to the software processes as well as to the associated hardware components; though patenting for the former stands slightly difficult on the score of its fast-evolving and upgrading nature because of which evaluating its novelty becomes a bit unclear and tough to gauge.

Further, Section 134 of the Indian Patents Act, 1970 has envisaged certain definitions of the person entitled to seek an application for the patent and obtain its benefits. From the bare reading of the provision, it can be understood to not include solely AI-based or computer-programmed inventions. Plainly, for an invention to claim patent protection, it is requisite for it to possess human creativity and should not comprise AI creations.[10] This was discussed in the case of Stephen Thaler v. Andrew Hirshfeld[11] where the U.S. District Court ruled that an AI cannot be classified as an inventor for a patent and hence is incompetent to file for patent applications.[12]

Thus, handling IP rights in the virtual world is not an easy job but cannot be said as an impossible one. Organisations in need of patents should carefully analyse, and check for infringements and should find a way out of them.

Conclusion:

The Internet is evergreening with new concepts and developments such as e-commerce, blockchain technology and NFTs with metaverse as a new addition. However, for the legal framework to keep up with this pace is very difficult and they fall behind. Yet, policy framers are trying to squeeze in the evolved technologies within the existing codes. Despite these efforts, metaverse still lies outside the coverage of regulations and IP laws are a good forum to have them covered and under the wraps of control. The author’s suggestion would be that just some modifications in the existing legislations and court conclusions and decisions to expand the horizons with reasonable limitations to include the advanced network within the purview of administration will suffice to ensure their order and smooth run.

Author(s) Name: Jaya Hari Rasika J (The Tamil Nadu Dr. Ambedkar Law University)

References:

[1] ‘Merriam Webster Dictionary’ <https://www.merriam-webster.com/dictionary/meta> Accessed 18 November 2022

[2] Kathryn Park, ‘Trademarks in the metaverse’  (2022) WIPO Magazine Issue 1/2022 <https://tind.wipo.int/record/44864> accessed 18 November 2022

[3] Indian Patents Act 1970, s 2(1)(j)

[4] Peter Brown & Richard Raysman, ‘Property Rights in Cyberspace Games and Other Novel Legal Issues in Virtual Property’ (2006) 2  Indian Journal of Law and Technology <https://articles.manupatra.com/article-details/Property-Rights-in-Cyberspace-Games-and-other-Novel-Legal-Issues-in-Virtual-Property> accessed 19 November 2022

[5] Aaron X. Fellmeth  and Maurice Horwitz, ‘Guide to Latin in International Law (2011) <https://www.oxfordreference.com/view/10.1093/acref/9780195369380.001.0001/acref-9780195369380-e-1670#:~:text=%E2%80%9CFirst%20in%20time%2C%20greater%20in,rights%20earlier%20rather%20than%20later> accessed 21 November 2022

[6] Kathryn Park (n 2)

[7] Aparajitha Lath, ‘Trademarks and the Metaverse: Imaginary Rights or Real Wrongs?’ (Spicy IP,18 May 2022) <https://spicyip.com/2022/05/trademarks-and-the-metaverse-imaginary-rights-or-real-wrongs.html> accessed 21 November 2022

[8] Andy Ramos,‘The metaverse, NFTs and IP rights: to regulate or not to regulate?’ (2022) Issue 2/2022 WIPO Magazine <https://tind.wipo.int/record/46721> accessed 22 November 2022

[9] Rhea Mukkatira Biddappa, ‘Emerging trends in digital copyrights in the new age of NFTs’ ( Manupatra, 11 February 2022) <https://articles.manupatra.com/article-details/Emerging-trends-in-digital-copyrights-in-the-new-age-of-NFTs> Accessed 23 November 2022

[10] Vallari Gokhale, ‘Legal Issues to be Presented While Building a Meta Verse:An Indian Perspective (2022) 3 (1) Indian Journal of Law and Legal Research <https://articles.manupatra.com/article-details/LEGAL-ISSUES-TO-BE-PRESENTED-WHILE-BUILDING-A-METAVERSE-AN-INDIAN-PERSPECTIVE> accessed 25 November 2022

[11] Thaler v Hirshfeld, (2021) 558 F. Supp. 3d 238 (E.D. Va. 2021)

[12] Ali Ebshara, ‘AIs as Inventors: Thaler v. Hirshfeld’ (BTLJ Blog, 24 January 2022) <https://btlj.org/2022/01/ais-as-inventors-thaler-v-hirshfeld/>  accessed 25 November 2022