Virtual reality, real IP-infringement

Over the last few decades, the widespread use of augmented and virtual reality has crossed over from science fiction to reality. AR and VR technology has become more affordable and consequently found its way into many aspects of our lives, including the areas of entertainment, scientific research, education, and even shopping.

With such widespread use, it’s no wonder VR applications have an impact on many fields. Including brand protection and intellectual property rights.

Which is why Jan (Project Manager at globaleyez) chose this very topic about the metaverse and the (future) role of intellectual property to present at Europol on 25 November at a conference about Operation Aphrodite. The event was organized to take stock of recent developments in the field of IP protection and the fight against counterfeiting.

With so many expressions and abbreviations thrown around, it’s easy to get confused. Here’s a short introduction to the most important terms.

Virtual reality, or VR “is the use of computer technology to create a simulated environment.” For a full VR experience users have to put on a special headset, which, as opposed to a traditional TV, computer or smartphone screen, ensures that the user will perceive to be within the virtual environment, and not sitting outside, looking in.

A person using a VR headset

On the other hand, augmented reality, or AR puts a virtual element in a real environment. Popularized back in 2016 by the game Pokemon Go, AR technology alters its environment with various digital features but doesn’t create an entirely new one like VR.

Finally, the metaverse is a complex virtual parallel world created by the interconnections of individual digital worlds of games, businesses, users, and any other entity that interacts in the virtual world.

Is that too Matrix? It certainly sounds like that, but you know how Facebook Inc recently changed its name to Meta? That’s a sure sign that the metaverse is about to leave the shelf of science fiction behind and enter real life.

Remember the popular board game The Game of Life? What fun it is to create a life and live it as you want without any repercussions or consequences coming your way once the game is over.

Well, VR technology can take that to the next level. No wonder that the market is booming: from a “mere” $1.37 billion revenue in 2019, VR gaming gains have reached $1.8 billion in 2020 and are projected to grow to $6.9 billion in 2025.

Just like classic board and video games, the newest generation of games (whether VR or not) also come in various shapes and sizes. A lot of them offer the opportunity for players to create avatars and send them on virtual adventures in a variety of digital worlds, ranging from completely realistic to high fantasy.

But with the help of the newest technologies, players can really immerse themselves in these worlds and become a part of the action. Even games that don’t use VR headsets provide an authentic feel and offer a completely immersive experience to users.

In games like Second Life, Animal Crossing, Sims and Roblox, players have the chance to live a virtual life to the fullest, including having cool careers, playing and even creating games with friends, attending exciting events, owning property, and much more.

Sounds like harmless fun, right? Sometimes it is. But in some cases, games like these have very real repercussions for both people and brands.

While people tend to pay good money to be entertained, many of these games have long surpassed the definition of “fun.” In fact, with teleworking becoming the norm ever since the COVID pandemic broke loose, virtual reality platforms have stepped up their game and offered businesses a “place” to use for meetings, conferences, seminars and more.

Second Life, for example, has a platform specifically designed to enable teamwork remotely that offers a more immersive and authentic feel than simply sitting in front of your computer by yourself at your kitchen table.

On the other hand, Roblox provides a “venue” for virtual birthday parties which promise to be more fun than shivering outdoors at a COVID-safe gathering in wintertime. Also, the blending of real and virtual commerce provides many previously unforeseen opportunities for businesses. For example, trying on clothes virtually bridges one of the most important gaps between online and in-store shopping.

A woman trying on clothes virtually. Source: The Future of Augmented Reality: 10 Awesome Use Cases, https://www.youtube.com/watch?v=WxzcD04rwc8

The use cases of these technologies keep growing by the second. And so does the value of the market: the metaverse was worth $61.80 billion in 2022 and is projected to reach $2961.55 billion in 2032.

Remember how cartoon characters always wear the same outfit? Well, some gamers don’t want to subject their avatars to the same fashion fate, and are willing to spend some money (whether real or in-game) to get them cool things.

This is similarly true to workers remotely attending meetings from their living room via virtual avatars. Who wants to appear in yesterday’s dirty digital dress? You can even change your hairstyle every day if you want to, or appear as a cartoon version of yourself.

Various avatars with digitally altered features. Sources: Meta Reality Lab Research, Hair and Skin Rendering, https://gfycat.com/greenclearfruitfly, and The Metaverse and How SWe’ll Build it Together - Connect 2021, https://www.youtube.com/watch?v=Uvufun6

And what could be cooler than virtual replicas of products from real brands?

Some brands have already recognized the potential in this market and secured their rightful place in the virtual world with legal agreements. For example, Gucci cooperates with Roblox, Louis Vuitton with League of Legends, Valentino and Marc Jacobs with Animal Crossing, and Balenciaga with Fortnite.

As the market of digital games is immense and all the trends point upwards, it really makes sense for brands to secure their digital IP rights. Just like Nike did when they filed for digital trademarks in the US for its branded products, including shoes and clothing.

Because sooner or later, virtual versions of your branded products will pop up in games and other digital applications, whether you like it or not. In fact, it has already begun.

You can get all kinds of products on digital in-game marketplaces. Like, for example, Nike gear or Gucci products on Second Life. However, we believe these haven’t been authorized by the brands, although we obviously can’t be entirely sure.

Screenshot of Second Life marketplace listings of Nike products from secondlife.com.

This court-admissible, timestamped screenshot was taken with our own Google Chrome extension, screenseal

Which means, that just like in the real-world scenarios of counterfeiting, grey marketing or any other IP infringements, somebody is stealing your brand’s revenue.

Not to mention your reputation.

Some of these games can turn really violent. Do you want the characters butchering people on Grand Theft Auto or Resident Evil to wear your branded products? Or use your brand’s tools for very unsavory acts?

As we move towards an increasingly digital life, protecting your IP rights in virtual realities may quite soon become just as important as looking after them in the real world. The question is, how?

As the market is still very new, it’s impossible to predict all the ways brands will be able to protect themselves from IP-infringement in the digital world. However, there are already a few examples that may provide an insight into things to come.

Virtual Birkin bags

Luxury brand Hermés won a court case against an artist who created and sold virtual Birkin bags called MetaBirkins as NFTs. While the artist claimed that the digital image of the bag is a form of art, Hermés argued that the artist infringed on their trademark when using their logo and their bag’s image. 

Eventually, the court found the artist liable for trademark infringement, trademark dilution and even cybersquatting, ordering him to stop using the Birkin trademark and give the domain name MetaBirkins as well as all proceeds from his sales to Hermés.

This case proves that brands can and should take a stand against IP infringements in virtual realities as well.

Just like Nike did it, registering your trademark rights in the virtual world seems like the perfect (and necessary) first step to protecting them from misuse. Due to the novelty of the market (and indeed the entire phenomenon), it may take a long time to establish a code of conduct regarding the digital versions of real life branded products.

Don’t wait for that to happen; register your digital IP-rights to get a solid base for their protection in digital environments.

Non-fungible tokens, or NFTs are one of a kind pieces of digital assets. For example, a work of digital art, a video, even an autographed tweet can become an NFT. These tokens are stored on the blockchain (NFTs are part of the Ethereum blockchain), which ensures their authenticity can’t be tampered with.

Unfortunately, just like any other digital work, NFTs are not immune to the copy-paste method, but the copy won’t contain the unique identifier that secures the NFT which will alert people to the theft.

The process is similar to globaleyez’s image monitoring service; we also look for images used without permission and ensure their removal from the internet (though we don’t require an NFT to be attached to our clients’ original imagery).

Although it’s still early days, NFTs could be a promising solution for brands to protect their IP rights in the virtual world.

And then, of course, there is good old online brand protection. While certainly more complex and overwhelming than anything before, the metaverse & co is still based on the internet. And guess what works really well on the internet? Online brand protection.

Our services, including marketplace, domain, image, and social media monitoring can be adapted to the requirements of the metaverse. Just like we find IP-infringing products on regular online and offline marketplaces, we can sift through in-game marketplaces like Roblox and Second Life and detect listings that infringe on our clients’ IP rights.

Don’t sit around waiting for a solution to emerge that protects you against infringements in the metaverse. Get in touch with us and let’s develop a solution together!

Virtual reality has an immense potential to transform our lives on so many levels. The way we work, live, play and interact with each other could be entirely different in a couple of years than it is now. Since the technology is still very new, it’s impossible to predict how soon and to what extent it will be adapted into the daily lives of people.

We at globaleyez are certainly excited by the possibilities, but, just like with any other recent developments, we’ll keep an eye out for potential dangers to our clients’ IP rights. However the metaverse turns out, we’ll be sure to be among the first to adapt and offer solutions to protect your brand from digital counterfeiters, grey marketers and any other dishonest actors infringing on your IP rights.

Reach out to us for a digital copy of Jan’s presentation at Europol.