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Protecting Trademarks In Metaverse: Is Trademark Regime Ready For Internet 2.0?

We are stepping into the new realm of the Internet, which may be regarded as a new cyber bubble, because of the growing popularity of the metaverse. India can be a booming market for virtual reality owing to the young population, vibrant cyber ecosystem, and a huge talent pool. Apart from 'Big Tech' companies like Facebook, which renamed itself as 'meta', Indian companies like Reliance Industries Limited, Infosys, Tech Mahindra and Tata Consultancy Services are also planning to enter the metaverse.

It is undoubtedly a new avenue, however, prone to infringement of the trademark. Fortune 500 companies like Mc Donalds and Nike have already filed the trademark with the United States Patent and Trademark Office ('USPTO'). It is an indication that companies will certainly file Trademark in India as well.

The present article seeks to analyse the scope of Trademark in the metaverse in India along with the growing challenges in the field of Trademark protection.

Decoding the concept of 'Trademarking in Metaverse'
The term 'metaverse' was coined by Neal Stephenson in his science fiction Snow Crash" in 1992. It was, however, explained by Ernest Cline in the work 'Ready Play World'. The term is derived from the conjuncture of two words, 'meta' and 'verse', meaning 'beyond the universe'. Metaverse is a parallel universe created in cyberspace which allows its users to have a reality-based experience. The technology of metaverse is created in such a way that the person can enjoy food, have and even buy and sell the property. Hence, the Companies are securing their brands in the metaverse.

Possibility of Trademark infringement in Metaverse
With the new avenues of Internet 2.0, there is a parallel need to approach the protection of the trademark in Metaverse. The Trademark Act, of 1999 provides for the protection of trademarks. The intention of the said Act was elaborated in the celebrated case of Cadbury India Limited vs Neeraj Food Products that the purpose of trademark legislation is to protect the trader and consumer against dishonest adoption of one's trademark by another with the intention of capitalising on the attached reputation and goodwill.

Section 29 of the Act bestows against the infringement of registered trademarks, but only upon the class in which it has been registered. Clause (1) of the section reads as-

29. Infringement of registered trademarks:
  1. A registered trademark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trademark in relation to goods or services in respect of which the trademark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trademark..."

Since, it is clear that the goods registered in a class are protected and not otherwise, the trademark in the metaverse is prone to infringement. Let's clear this with an example. Brands have registration in their own class. Like, as clothing and Footwear being trademarked under Class 25, Coffee and teas in Class 30, or Legal Services in Class 45 of the Fourth Schedule of Trademark Rules, 2002. Now, a person may file the trademark for the Clothing, Footwear, or legal services in the virtual world under Class 42, because it is permitted under Trademark law (Nandhini Deluxe v. Karnataka Co-Operative Milk Producers Federation Ltd).

Now, for an example, imagine you went for the Mahindra Thar in the metaverse, not owned by its owner in the real world; the experience was below standard. Will you prefer it in the real world? Most would answer in negative. As pointed out in Mr. Arun Jaitley v. Network Solutions Private Limited, 'the popularity or the fame of any individual or the company will be no different on the computer (or internet) than reality. Hence, the opinion created in the metaverse may impact the opinion in the physical world.

From the above instance, the brevity and clarity of Trademarking framework in the Metaverse may be observed. Trademark of the brands in the metaverse will help them have their rights secured. Additionally, the said allegation of infringement could have a defence of the Normative fair use policy, under Section 30. It may be interpreted that infringement of a trademark in the metaverse is open to various interpretations when it goes to litigation.

Additional Challenges of protecting Trademark in Metaverse
The inception of Metaverse has brought several challenges to the Trademark regime. There still persist the issues-particularly in enforcement. Some of these challenges may be condensed as:
  1. Jurisdiction
    Ascertaining jurisdiction (see the previous post on jurisdiction here) is going to be a serious concern in the metaverse. What if the Trademark of the Indian brand is infringed from Ecuador? Do the principle of 'Long Arm jurisdiction' as observed in Swami Ramdev vs Facebook applicable in the metaverse? In World Wrestling Entertainment v. Reshma Collection, the Delhi High Court was said to have jurisdictions assuming that virtual shops have the presence as physical shops. Similarly, the Courts may have the jurisdiction where the parties reside but are still a question of chaos if the infringer is from other jurisdictions.
  2. Use of Licensing
    It is a million-dollar question whether the license obtained in the real world will extend in the metaverse as well? For instance, will the trademark of TATA Company be owned by the same person in virtual reality? Additionally, what will be the scope of using that trademark licensing in the metaverse.
  3. Unauthorised Use of Trademark
    There can be the possibility of unauthorised use of the trademark in the metaverse. The trademark in the virtual world is more prone to counterfeiting and misrepresentation. For instance, the avatar in metaverse may wear the trademarked shoes of Nike. How the court will interpret such virtual goods is an interesting fact to see in the near future.
  4. Intermediary
    It is also noticeable whether the metaverse creator like Sound Life or Facebook, like the social media, will be treated as an intermediary under Intermediary Rule 2021? If so, the metaverse providers will have their own rules to regulate their respective platforms.

In respect of the above challenges which may be faced in the protection of trademark in the metaverse, some below listed may be followed to dilute the possibility of infringement.
  1. The trademark protection should be extended to its virtual replica as well. It should be like contracts that are enforced in cyberspace as well. (Section 10A of Information Technology Act, 2000). The company may go for the multi-class trademark registration including their products and services in metaverse also. Extending it to Class 42 will enable them to enforce their rights even in the metaverse. It will also minimise unnecessary litigation and will save the time of both the Court and the parties concerned.
  2. Metaverse creators should firstly gauge the possibilities of infringement of other companies' trademarks. The 'Terms of Service' should secure brand protection. It may also seek the policing of Intellectual Property, its valuation and management.

The Bottom line
The major part of the discussion is the metaverse, indeed, will launch itself as a revolution in the era of the internet, but will also pose challenges for the legislation to regulate it in different spheres. Apart from this, there are various challenges of privacy, data protection, piracy, plagiarism etc, in virtual reality. Hence, it is an interesting dynamism of law that will be evident prospectively.

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