By now, many have probably heard of the metaverse, a network of digital environments where people can use avatars to, among other things, interact and shop. The metaverse is undoubtedly one of the hottest topics in recent years. So while it’s still in the early stages, it’s no surprise fashion brands have shown interest in the potential of the metaverse.
One of the reasons fashion brands have taken an interest in the metaverse is presumably because of the creative freedoms it allows. In the metaverse, creatives aren’t limited by supply chain issues or travel delays—they can simply produce a product that consumers can access instantly and for free. But with that freedom comes an easier means for counterfeiters to infringe on valuable intellectual property (IP) of brands.
For example, Roblox users can purchase virtual authentic clothing and accessories from Gucci and Ralph Lauren, but there are also countless unauthorized products available for purchase, including LOVE bracelets from Cartier, hoodies from Supreme, and blazers from Chanel.
Numerous fashion brands have also started offering non-fungible tokens (NFTs), unique digital assets that can be used to represent items such as artwork, videos, and even digital (or physical) clothing. For example, Gucci, Rimowa, Dolce & Gabbana, Givenchy and others have launched NFTs to engage with the digital community. On the other hand, NFTs have provided a new medium for copycats. One prominent example is the MetaBirkins NFTs, colourful, hyper-realistic and furry representations of the famous Hermès Birkin bag, which are the subject of an infringement, dilution and cybersquatting lawsuit filed by Hermès. Mason Rothschild, the creator of MetaBirkins, recently moved to dismiss Hermès’ lawsuit, arguing that its use of “MetaBirkins” was a protected artistic expression under the Rogers test, under which the use of a third-party trademark with a creative work is not infringing unless the use (1) has no artistic significance, or (2) is explicitly misleading. While the US District Court for the Southern District of New York (SDNY) agreed that NFTs may be subject to the Rogers test, which until then was an open question, it rejected Rothchild’s motion to dismiss because Hermès’ amended complaint sufficiently alleged that its use of “MetaBirkins” is explicitly misleading.
Beyond this, courts have yet to provide meaningful guidance on what is or is not infringing or diluting in the virtual world. Furthermore, in denying Rothschild’s motion to dismiss, the SDNY suggested in dicta that Rogers might not apply, for example, to a virtually wearable Birkin bag since the name “MetaBirkins” would then be used with a non-expressive commercial product. Such virtual bags could possibly be subject to other fair use defenses, but in light of the open questions and potential risks posed by the metaverse and other virtual offerings, brands should consider expanding trademark filings to cover specifically digital products and NFTs, which can improve the application. efforts and facilitate expansion plans in the metaverse. First, registration of a trademark provides evidence of the owner’s exclusive rights to the trademark. As a result, a registry covering NFTs and virtual goods will improve enforcement, anti-counterfeiting and de-marking efforts against infringing virtual offerings. For example, many metaverse platforms and NFT marketplaces have takedown procedures, under which they can remove infringing virtual goods in response to proof of infringement of protected rights, the latter of which can most easily be established with a trademark registration. covering the relevant goods or services. services.
Unauthorized designer goods on Roblox demonstrate consumer demand for branded virtual goods in the metaverse. In turn, brands can meet this demand and outbid violators by introducing their own virtual goods and NFTs. Trademark registrations can also be leveraged by entering into license agreements with NFT minters, metaverse platforms, and other operators in the virtual world.
Many major brands have paid attention, as evidenced by the 2,600 trademark applications for virtual goods filed from January to May 2022 alone. The same goes for clothing and footwear brands, in particular. Nike was a pioneer when it applied to register many of its trademarks for virtual products and services starting in October 2021, including NIKE, JUST DO IT, and the iconic Nike logo, among others. Other major brands, such as Valentino and Saint Laurent, followed soon after. Interestingly, many of the major fashion retailers have even applied to register their brands for virtual real estate services, perhaps anticipating the omnichannel potential of the metaverse.
takeaway
Beyond brand registries, fashion brands should monitor popular metaverse and NFT platforms for unauthorized use of their IP. It is likely that many violations can be resolved with “informal” enforcement actions through demand letters, business-to-business discussions, and/or takedown requests, although, as mentioned, trademark registrations for virtual goods will enhance those efforts. . Brand owners should take advantage of trusted IP advice to design registration, monitoring and compliance plans to combat current and future infringements in the digital world.
The authors wish to acknowledge the contributions of Summer Associate Megan Kilduff to this update..
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