Milan Fashion Week and Fashion Law Trends: Is Metaverse the New Fashion Revolution for IP?

Neal Stephenson coined the term “metaverse” in his 1992 novel Snow Crash, where it referred to a 3D virtual world inhabited by avatars of real people, sometimes facilitated by the use of virtual and augmented reality devices, which would blur the barrier between online and offline.
No industry has embraced the metaverse quite like fashion. The likes of Gucci, Balenciaga, and Burberry are spinning up fashion and accessories that you will never even wear in the metaverse. Million of users buy clothing and skins for their digital avatars and many fashion brands have collaborated with the videogame industry to launch capsule digital collections, which sometimes could also be collected in real stores.

Such phenomenon raises a number of consequences in the legal world, especially in the intellectual property field.

Will use in the metaverse account for a genuine trademark use in the core classes of the brand or will new filings be necessary? Assuming use in the metaverse does actually amount to trademark use, companies will need to check their trademark filing strategies and assess whether enough protection is granted to the mark in a meta-environment. This might lead to rethink the trademark portfolio and consider filings for instance in classes 9 and 41. In case of meta-squatting phenomena, account shall be taken to the possibility to establish reputation of the mark, by accessing the enhanced protection against dissimilar goods.

Fashion brands will also need to clear their rights over the goods they wish to introduce in the metaverse. This might be clearer in case of works made by employees to be transformed in digital assets or NFTs, but less immediate as to works created by independent contractors. In standard license agreements or collaboration agreements particular attention must be given to the “new technology clauses” which normally extend right of exploitation on all technologies known at present and to be developed in the future. In any event, the best scenario is to draft clear clauses of assignment of all the IP rights over the concerned works, which will then cover also forms of exploitation in the metaverse.
Another issue raises with the territoriality principle of IP rights. On this point, it is reasonable to assume that the general principle of ubiquity, already used for the Internet, will allow to sue for infringement in alle the venues where the infringing content is accessible, with the possibility to recover greater damages for worldwide infringement where the infringer or any hosting or service provider has registered office.

Also, if we are talking about virtual words that are potentially connected, what about the interoperability between the programs on which the architecture of the metaverse will be based? If we aim for a virtual space accessible to everyone, the notion of FRAND (Fair, Reasonable and Non-Discriminatory) licenses and data portabilty, developed in other areas of law, might play a role and contribute to create common standards, available for all the operators.

Mr. Stephenson could probably not imagine it but the metaverse is already here and if they want to part of it companies should be ready to redefine their strategy, in order to secure the extension of their intellectual property rights to this new virtual space.