The Metaverse is a network of digital environments where individuals can interact and shop using avatars. The metaverse is undoubtedly one of the hottest topics in recent years. So it’s no surprise that fashion brands are interested in the potential of the metaverse, even though it’s still in its early stages.

One of the reasons fashion brands are interested in the metaverse is probably because of the creative freedom it allows. In the Metaverse, creatives aren’t limited by supply chain issues or travel delays. Easily create products that are instantly and freely accessible to consumers. But that freedom also provides an easier means for counterfeiters to compromise a brand’s valuable intellectual property (IP).

For example, Roblox users can purchase authentic virtual clothing and accessories from Gucci and Ralph Lauren, but also a myriad of unauthorized products such as Cartier LOVE bracelets, Supreme hoodies, Chanel blazers, and more.

Numerous fashion brands have also started offering their own digital assets, non-fungible tokens (NFTs), that can be used to represent items such as works of art, videos, and even digital (or physical) clothing. For example, Gucci, Rimowa, Dolce & Gabbana, Givenchy and others have launched their NFTs to participate in the digital community. NFTs, on the other hand, provided a new medium for imitators. A fairly high-profile example is his MetaBirkins NFT, a colorful, surreal and hairy depiction of Hermès’ famous Birkin his bag. Mason Rothschild, creator of MetaBirkins, recently moved to dismiss Hermès’ lawsuit, arguing that his use of “MetaBirkins” is protected under artistic expression. Rogers Test – Use of third-party trademarks in creative work is not infringing unless such use is (1) not at all artistically relevant or (2) clearly misleading .The United States District Court for the Southern District of New York (SDNY) ruled that NFTs Rogers Hermès’ amended complaint sufficed to argue that Rothschild’s use of “Metabirkin” was clearly misleading, thus dismissing Rothschild’s motion to dismiss it.

Beyond this, courts have yet to provide meaningful guidance as to what infringes or dilutes or does not in virtual worlds.Furthermore, it rejects Rothschild’s motion to dismiss At the time, SDNY suggested that: dictate that Rogers For example, the name “MetaBirkins” is used in non-descriptive commercial products, so it may not apply to the virtually wearable Birkin handbag. Such virtual bags could probably be subject to other fair use defenses, but in light of the unresolved issues and potential risks posed by the Metaverse and other virtual products, brands should You should consider an extended trademark application that explicitly covers your products and NFTs. This improves execution. effort and facilitate expansion plans to the metaverse. First, a trademark registration provides evidence of the owner’s exclusive right to the registered trademark. As a result, registrations covering NFTs and virtual goods strengthen brand enforcement, anti-counterfeiting, and takedown efforts for infringing virtual goods. For example, many Metaverse platforms and NFT marketplaces have takedown procedures to remove infringing virtual goods upon evidence of infringement of protected rights. service.

Roblox’s unauthorized designer products demonstrate consumer demand for branded virtual goods in the metaverse. The brand can then meet this demand and kick out infringers by introducing its own virtual goods and his NFTs. The trademark registration can also be leveraged in making license agreements with his NFT Minter, Metaverse Platform and other operators in the virtual world.

Many top brands are paying attention, as evidenced by the 2,600 virtual product trademark applications filed between January and May 2022 alone. The same is especially true for apparel and footwear brands. Nike was a trailblazer when it applied for registration for many brands of virtual products and services starting in October 2021. This includes NIKE, JUST DO IT, the iconic Nike Swoosh logo, and more. Other top brands such as Valentino and Saint Laurent soon followed. Interestingly, many top fashion retailers are applying to trademark their virtual real estate services, perhaps in anticipation of the omnichannel potential of the Metaverse.

Takeaway

Beyond trademark registration, fashion brands need to monitor for unauthorized use of their IP on popular metaverse and NFT platforms. Many infringements can potentially be resolved through “informal” enforcement measures through dunning letters, business-to-business discussions, and/or takedown requests, but as noted above, trademark registration for virtual goods may preclude these efforts. Strengthen. Brand owners should leverage their trusted IP attorneys to develop registration, monitoring and enforcement plans to combat current and future breaches in the digital world.

The authors would like to thank Summer Associate Megan Kilduff for her contribution to this update..

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