Challenges Of Intellectual Property Rights In Metaverse – With Special Refrence To Industrial Design
Author: LawSphereX
Category: Intellectual Property
Published:
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CHALLENGES
OF INTELLECTUAL PROPERTY RIGHTS IN METAVERSE – WITH SPECIAL REFRENCE TO INDUSTRIAL DESIGN Dhivyabharathi B, B.B.A.L.L.B. (Hons.) School of Excellence in Law, The Tamil Nadu Dr. Ambedkar Law University, Chennai Lionel Stephen A, B.A.L.L.B. (Hons.) School of Excellence in Law, The Tamil Nadu Dr. Ambedkar Law University, Chennai
ABSTRACT
Metaverse refers to the technological convergence of physical and virtual place. It is a virtual three dimensional space in which users can interact with one another. With the increase in use of this technology by various businesses the question of intellectual property rights comes into play, who owns the property? What are the criteria for granting protection? It also poses new challenges to IP owners as the individuals a create virtual representation of existing copyrighted works. There are various intellectual property rights involved in metaverse, it includes copyrights, trademarks which protects virtual objects and logos and patent protection to technological advancement in metaverse. Conventional legal framework of IP won’t be sufficient to address the new digital realm of metaverse.
This paper seeks to address the scope of IP protection in metaverse, potential challenges and the need for legal framework for protecting IP rights in metaverse based on various cases and agreements, as the metaverse has potential opportunities for the economic growth and IP will act as driver to foster the growth of such technologies. Keywords: Intellectual Property, Metaverse, Copyrights, Trademark, Patent.
1. Introduction
Neal Stephenson was the first one to familiarizes us with the concept of Metaverse, a virtual world through his novel “Snow crash” in the year 1992. 1 Metaverse is indeed a dream for millions of people to interact with one in the new virtual world in form of avatars. Living in the digital era, interacting with one another in virtual world is no longer a dream. Though it doesn’t have sole definition, Metaverse is a 3-Dimensional world envisioned as a persistent, collective, shared space where digital facsimiles of ourselves, or avatars, move freely from one experience to another, taking our identities and monetary assets with us. 2 It involves massive technologies such as virtual reality, augmented reality and mixed reality that helps in convergence of physical and virtual world.
Though we cannot deny the fact that the metaverse is still pertinent, even if the idea of a quickly developing fully fledged virtual world where people can work, shop, and socialize from the comfort of their sofas has faded due to various reasons such as, technology that enable immersive metaverse is still evolving, interoperability challenges, diversified platform and lack of legal and regulatory framework. As of now metaverse is still evolving with contribution from several other technologies and its immersive contributions in various field cannot be ignored. Within the industrial metaverse, as shown by the Nvidia Omniverse platform, businesses are creating digital twins for the purpose of designing and overseeing tangible items.
In order to improve employee performance, businesses are also utilizing augmented reality (AR) to superimpose information on real-world items and virtual reality (VR) for staff training. 3 During COVID-19 pandemic several businesses have been severly distrupted and it is when metaverse came to rescue. Through their virtual reality, users we able to visualise their products such as spectacle frames, cloths, cosmetics, hair dye, watches etc. One the industry that benefitted the most during pandemic is luxury industries. the business has even begun holding fashion shows. There was even a Metaverse Fashion Week established. A further benefit of digital fashion is that it makes it possible to produce 1 Zakikhan Hasanzade, Intellectual Property Challenges in Metaverse, Linkedin, (July, 15, 2024, 10. 10 AM),https://www. linkedin. com/pulse/intellectual-property-challenges-metaverse.
2 Linda Tucci, John Moore, What is the metaverse? An explanation and in-depth guide, Techtarget, (July, 15, 2024, 10. 11 AM), https://www. techtarget. com/whatis/feature/The-metaverse-explained. 3 Linda Tucci, John Moore, What is the metaverse? An explanation and in-depth guide, Techtarget, (July, 15, 2024,
10.11 AM), https://www.techtarget.com/whatis/feature/The-metaverse-explained.
designs that would be impossible to produce in the actual world owing to technological limitations. The problem arises with the legal issues associated with metaverse. It has always remained grey area. Legal issues faced by the users and companies of metaverse includes jurisdictional issues, intellectual property issue, privacy concern. So for their productive existence we need proper legal framework to address the legal challenges associated with it.
2 Intellectual Property Rights Issues in Metaverse
The metaverse network is virtual and decentralized, due to which it might be difficult to enforce intellectual property rules like copyright and trademark laws. It can be difficult to determine who owns virtual assets in the metaverse and how they can be used. IPs come in a variety of forms in the metaverse. Virtual things made by users, such as avatars, buildings, and landscapes, are protected under copyright laws. Patent law covers technological developments that occur during the creation of the metaverse and trademark law protects the branding materials and logos used in the virtual world. The exclusive right to use, sell, and authorize virtual assets and experiences is granted to the creators and owners under these restrictions. An instance of employing intellectual property within the metaverse involves securing patents to safeguard virtual reality innovations.
For instance, Facebook recently submitted a patent application for a framework aimed at generating and showcasing virtual reality content. This patent pertains to the technology behind creating and presenting virtual reality environments and experiences. 4 Users may build virtual versions of real-world items, like as trademarks or works protected by copyright, that they do not actually own, this poses a challenges to IPR ownership in metaverse. The intellectual property rights of designers, inventors, and owners of unique signs must be respected by metaverse architects, just as they do in the real world. This is because IP rules safeguard an object's intangible components, whether it be virtual or actual. IP rights holders therefore have legal right to defend their rights in the metaverse 4 Zakikhan Hasanzade, Intellectual Property Challenges in Metaverse, Linkedin, (July, 15, 2024, 10.
10 AM),https://www. linkedin. com/pulse/intellectual-property-challenges-metaverse. and bring legal action against any misuse of those rights, including using a virtual jacket or pocketbook that violates those rights. However, since using real-world things in a virtual environment may violate the real-world owner's IP rights, it is important to carefully assess the extent of IP protection in the metaverse. As a result, a precise legal framework is required to safeguard both the freedom of users to develop and interact with virtual items in the metaverse and the rights of IP owners.
3 Industrial Design
Industrial designs deal with the aesthetic or ornamental aspects of the product which are produced industrially. One must not confuse the functional and technical aspects of the design of the product with its aesthetics. It may consist of three-dimensional (3D) features such as the shape of the articles used in various industries or two-dimensional (2D) features such as patterns, colour, lines, shading used for textiles and wallpaper. It is these that attracts us and causes us to buy a particular product. One must be able to distinguish industrial design from other common forms of intellectual property rights. However, Industrial design do not include artistic work, as artistic works are protected under copyrights. For example, a unique sketch by an artist acquires copyright, but it becomes a subject matter of design only when such design is applied to articles in an industry.
Industrial design is different from a patent, as a patent is granted for a new product or process, whereas design is granted when it is applied in a creative way to an old or new product.
4 Industrial design in virtual space –an intellectual property
Industrial design in virtual space is a cutting-edge approach that leverages digital technologies to create, visualize, and interact with product designs in a virtual environment. This innovative methodology transforms the traditional design process, offering numerous benefits and opportunities. With the metaverse being a shared, immersive and interactive virtual reality where users can create their own avatars and environments and engage with other users in real time, the unique designs created by its creators to attract more audience towards this 3D internet model needs to be protected at all costs to ensure progress in the future.
These designs fall under the purview of intellectual property rights just like physical designs and compose all the core essentials of the physical designs as well, such as, creation of mind, involvement of intellect work. Thus, in order to sustain innovation and creativity, they must be protected. The main ingredient of an intellectual property, i. e. involving intellect of mind is fulfilled in a design found in metaverse. The designs found in metaverse can be given protection if they are original, created by its creator and not blindly copied from another source, rather, the creator himself allocates time and does intellect work, as a product of which the design comes out. It also involves other basics such as creativity, which can also be termed as intellect effort, which ensures that the design is truly innovative and thus, creative works receive IP protection.
Novelty in absolute sense can also be applied for even stronger protection as in the case of designs. Even though metaverse designs are created in a digital realm rather than a physical one, they are still regarded as concrete, fixed and tangible under IP law. Digital files, code, and 3D models are acknowledged as tangible manifestations of creative content. IP laws, such as copyright, trademarks, and design patents, have been adjusted to encompass digital innovations. Legal systems and courts are progressively acknowledging virtual designs as intellectual property, affording them comparable safeguards to physical equivalents. Thus, this can very well extend to designs in metaverse as well. Also, these designs have monetary values i. e. significant economic value, which when copied can lead to theft and piracy of the design, thus, helping the infringer to gain profits illegally.
These designs also bring about the unique identity to its brand and thus for brands operating in virtual spaces, maintaining integrity at this level is a must. Unauthorized copying or alteration of designs in virtual space can potentially harm the brand’s reputation. This at last, as a result, is definitely likely to break the customers’ trust on the reputed brand. Thus, protecting these is not an option, rather a compulsory one to protect the brand’s identity and reputation. Apart from these, protection of these designs encourage competition at a larger scale, thereby increasing competition and ultimately to increased efficacy, efficiency and productivity. Thus, only with an increase in innovation, a new brand can survive and sustain in the market.
Design protection helps to maintain the integrity of the virtual market by ensuring that original and authentic products are distinguishable from imitations. Originality of the design is the foremost subject that is protected as per design protection.
5 Design in metaverse in relation to the Design Act, 2000
Laws protecting the visual appearance of objects that are not purely utilitarian are given in the Industrial Design Act of respective countries. Such legislation confers exclusive rights to use and reproduce the original design for a certain period on the creator of the original design. Depending on the country, the details of industrial design protection may differ, but the general principles are the same. In India, the Designs Act of 2000 governs this aspect of protection of designs.
Section 2(d) of the act provides the definition of design as the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device, and does not include any trade mark or property mark or any artistic work5. Though, here the word ‘virtual’ is not mentioned, it can very well extend to the same.
To support the same, the significance of safeguarding intellectual property in the digital realm was emphasized by the Bombay High Court, acknowledging that software designs and virtual models may fall under the purview of the Designs Act if they possess a unique and novel appearance. Also, when having a close look at section 4, which gives about the prohibition of registration of certain designs, nothing notably prohibits registration of a design in the virtual world.
It gives only about the design which is not new or original or has been disclosed to the public anywhere in India or in any other country by publication in tangible form or by use or in any other way prior to the filing date, or where applicable, the priority date of the application for registration; or is not significantly distinguishable from known designs or combination of known designs; or comprises or contains scandalous or obscene matter6. Thus, this gives another green flag for the registration of designs in virtual space.
5 Section 2(d), The Designs Act, 2000, Act No. 16 of 2000.
6 Section 4 of the Designs Act, 2000, Act No. 16 of 2000.
When a design is registered under the designs act, according to section 11 of the Designs Act, the registered proprietor of the design shall have copyright in the design during ten years from the date of registration. Also, before the expiration of the said ten years, application for the extension of the period of copyright can be made to the Controller in the prescribed manner, and, the Controller shall, on payment of the prescribed fee, extend the period of copy-right for a second period of five years from the expiration of the original period of ten years7. So, a total protection for 15 years can be enjoyed by the design proprietor. During this protected period, i. e. during the existence of copyright in any design it shall not be lawful for any person to involve in piracy of the registered design8 as per section 22 of the act.
Although with these been said, a new law or an amendment to be passed to give provisions for the inclusion of the designs in the virtual world under the purview of designs expressly. It can be synonymous to the electronic evidence inclusion in the Indian Evidence Act.
6 Relevant Case Laws
The courts, not only in India, but also internationally have encountered many cases relating to design disputes in the virtual world. Some of them are listed as follows:
1. Second Life vs. Eros, LLC (2007)910
Linden Lab, the creators of Second Life, faced a lawsuit from Eros for allegedly selling and copying its virtual sex toys without permission. Linden Lab was accused by Eros of failing to take appropriate action to stop infringement of its intellectual property rights in the Second Life virtual reality. The verdict barred the defendant from making any more unlawful copies and mandated that it pay the plaintiffs $525.
2. Blizzard Entertainment vs. Glider (MDY Industries) (2008)11
Blizzard sued MDY Industries over Glider, a bot that automated gameplay in World of Warcraft. The lawsuit centered on the creation of design and application of third-party
7 Section 11 of the Designs Act, 2000, Act No. 16 of 2000.
8 Section 22 of the Designs Act, 2000, Act No. 16 of 2000.
9 8:2007cv01158 of US District Court for the Middle District of Florida.
10 F. 3d 928 (9th Cir. 2010), United States Court of Appeals for the Ninth Circuit.
11 629 F.3d 928 (9th Cir. 2010)
software in a virtual environment, posing issues with virtual environment integrity and user rights. Therefore, the court supported the ruling that, at least in relation to the dynamic nonliteral aspects of Blizzard's property, MDY had violated the provisions of the Digital Millennium Copyright Act against trafficking in copyright circumvention methods.
3. Oracle vs. Google (2010)12
Oracle sued Google in this well-known lawsuit for using Java APIs in the Android operating system. The case had major implications for software design and development in virtual settings even if it wasn't specifically about a virtual world. The Supreme Court finally decided the case in Google's favor in 2021.
4. Sony vs. George Hotz (2011)13
Sony filed a lawsuit against hacker George Hotz for jailbreaking the PlayStation 3, which gave users access to alter in-game graphics and run unapproved software. The case brought to light the tension that exists in virtual environments between platform control and user innovation. Here, an out-of-court settlement had been negotiated between Hotz and Sony. As part of this, Hotz was permanently barred from hacking any additional Sony devices, and any upcoming firmware releases would not be able to be decrypted.
5. Zynga vs. Vostu (2011)14
Zynga filed a lawsuit against Brazilian game creator Vostu for copying the designs, and mechanics and allegedly stealing the concepts and gameplay of its well-known Facebook titles, including FarmVille and CityVille. As part of the settlement, Vostu committed to altering its games.
6. Wizards of the Coast vs. Cryptozoic Entertainment (2012)15
12 Google LLC v. Oracle Am., Inc., 141 S. Ct. 1183, 209 L. Ed. 2d 311 (2021), Supreme Court Of The United States. 13 Sony Computer Entertainment V. Hotz, No. C 11-167 SI (N.D. Cal. Jan. 27, 2011), United States District Court, N.D. California. 14 Zynga, Inc. v. Vostu USA, Inc., 816 F. Supp. 2d 824 (N.D. Cal. 2011), United States District Court For The Northern District Of California San Jose Division. 15 Wizards of the Coast LLC v. Cryptozoic Entertainment LLC, CASE NO. C14-0719JLR (W.D. Wash. Aug. 4, 2015), United States District Court Western District Of Washington At Seattle. 17 97 F.Supp.3d 965, U.S. District Court - Western District of Tennessee.
The creators of “Magic: The Gathering”, Wizards of the Coast, filed a lawsuit against Cryptozoic Entertainment for its online card game “Hex: Shards of Fate,” claiming that it replicated significant aspects of Magic's design. The matter was settled outside, and the specifics of the out-of-court settlement were not disclosed.
7. Ubisoft vs. Guitar Apprentice (2013)16
Ubisoft sued Guitar Apprentice over its Rocksmith video game, which Ubisoft claimed infringed on its patented technology and game design for teaching guitar. The dispute was resolved with a settlement.
8. Epic Games vs. Apple (2020)17
The argument between Epic Games and Apple also revolved over the design and delivery of virtual products within Fortnite, while being mainly about app store policies and revenue sharing. Epic contended that the dissemination of virtual goods and creative freedom were impeded by Apple's control over app distribution and payment mechanisms.
9. Hermès vs. Mason Rothschild (2022)18
Hermès sued Mason Rothschild, an artist, for making and distributing digital "MetaBirkins," or NFTs, which bore a resemblance to the brand-name Birkin bags of Hermès. The main points of contention in the litigation were trademark infringement and unauthorized use of Hermès' design in virtual environments. Rothschild was found guilty of cybersquatting and violating Hermès' trademark rights by a federal jury that found this out unanimously.
7. Conclusion
The issues surrounding intellectual property rights (IPR) in the metaverse are complicated and have many facets, especially when it comes to industrial design. To accommodate new forms of creation and interaction, traditional intellectual property frameworks need to be
16 Guitar Apprentice, Inc. v. Ubisoft, Inc., 97 F. Supp. 3d 965 (W.D. Tenn. 2015)
17 Epic Games v. Apple Inc., 493 F. Supp. 3d 817 (N.D. Cal. 2020), United States District Court Northern District Of California. 18 Hermes Int'l v. Rothschild, 22-cv-384 (JSR) (S.D.N.Y. Jun. 23, 2023), United States District Court, S.D. New York. reevaluated and adjusted as the metaverse develops into an increasingly immersive and networked digital ecosystem. A concerted effort is needed to adapt current legal frameworks, embrace new technologies, and promote international cooperation in order to address these challenges. Stakeholders can guarantee that intellectual property rights continue to offer significant protection and encourage innovation in this new digital frontier by taking this action.