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Luxury Brands: The Metaverse

The final part of this week’s MARQUES Luxury Brands Symposium in Florence focused on the Metaverse. Panellists showed various examples of brands in the metaverse and discussed some of the legal issues that arise.

The panel comprised Carolina Montero Peralta, Jacobacci-Abril Abogados, Spain; Guillermo Mier Y Concha Martinez, Brand Enforcement Manager Europe, Red Bull GmbH, Austria; Vanni Volpi, Chief Intellectual Property Officer, Guccio Gucci S.p.A., Italy; Christoph Bartos, Member of the Boards of Appeal, Head of the Examination Board of the EUTM Education Programme, EUIPO, Spain; and Erica Carter, EPIC Games, USA. The panel was moderated by Julia Holden, Studio Legale Trevisan & Cuonzo Avvocati, Italy and Marlou van de Braak, Director Legal, Heineken International B.V, The Netherlands.

“Metaverse is a word I try to avoid,” said Erica Carter of Epic Games, the developer of games including Fortnite, in a keynote presentation, “but it is now part of our everyday life.” She discussed developments from Second Life, Roblox and Minecraft to Black Mirror, Pokémon Go, Fortnite, Ready Player One and Meta.

Erica said there are many different definitions of the Metaverse/Metaverses. It does not depend on Web3, Blockchain or NFTs, but she said: “You do need everyone to experience the same thing at the same time in the same place. Technologically, at the moment that is not possible.”

When consumers make a purchase in games, they do not want to give it back. This requires interoperability so that consumers can take items across platforms and products and content can be delivered in various ways. “We also need to move between the virtual world and the real world,” said Erica. To promote interoperability, more than 400 companies are members of the Metaverse Standards Forum.

Speaking as part of the panel session, Erica discussed downstream licensing of IP rights to game players (including off-platform), post-term rights in perpetuity and how to deal with infringing use, approvals for modifications and alterations. She also shared some pictures and videos showing brands in the metaverse, including Nike, Adidas, Balenciaga and Timberland. “As brands you can get as creative as you want, and we will figure it out,” she said.

While Fortnite does moderate content for some reasons, it does not police IP rights, but it does operate a repeat infringer policy under the DMCA. “If we monitor for IP, we might lose DMCA safe harbour,” Erica explained. She added that “brands add fun” to the games.

Brands in the Metaverse

Delegates in Florence got to experience the Metaverse with some VR headsets during the coffee break.

As well as producing energy drinks, Red Bull is involved in sports, e-sports, sponsoring teams and athletes, all of which offer opportunities in the metaverse, as Guillermo explained. Points to consider before engaging in the Metaverse include: understanding the reality of the company; discussing goals for new digital realities; improve coverage and protection; do not follow trends; customise strategies; and assess the role of third parties.

“We would not do a collaboration that does not happen in real life,” said Guillermo. He showed examples of participation in games such as the Red Bull District Ride in the Riders Republic game, the Dakar Desert Rally game and The Crew 2, examples of NFTs including RED BULL RACING on Sweet, sponsored athletes and doodle art. The company has already taken down more than 8,000 NFT listings (most of them on OpeneSea). “NFTs are seen as investments, so non-IP laws and regulations might come into play, including money laundering and tax,” he concluded.

“We need to be flexible and follow the innovation,” said Vanni of Gucci. “The strategy is to clearly identify your priority and apply it in a proactive way. Be focused on what you want to achieve … and be prepared because online everything happens immediately and globally.”

Gucci has been in the Metaverse since 2020, cooperating with games including Roblox, and has launched NFTs, the Gucci Garden and the Gucci Cadillac. It has now developed Gucci Vault as the home of Gucci in the Metaverse, and has developed several projects. Gucci was also the first luxury brand to open a Discord channel.

Last year, Gucci removed 6.8 million fake listings online and closed 45,000 social media accounts, 7,000 apps and 6,000 websites. “As a brand, it’s important to work proactively and establish your action plan,” said Vanni. He shared some examples of enforcement and encouraged meeting and talking with online platforms to work together: “When you engage with them, you see they are professional, serious people.” He also stressed the importance of communication and social media.

Marlou said gaming is relevant for a huge number of Heineken’s consumers, and is potentially important for its brands. The question is which games to participate in, especially given the restrictions around alcohol advertising, age limits and the popularity of violent games. Its biggest initiative so far is the launch of Heineken Silver and a digital brewery in the Metaverse.

During the Q&A the panellists discussed issues including regulating time spent online, corporate social responsibility, opportunities for brands in the Metaverse, revenue/advertising opportunities and rights attached to NFTs.

Legal questions

Carolina introduced some legal issues in the Metaverse, noting that there is no case law yet. But there are cases pending in the US regarding the MetaBirkins NFTs and between Nike and Stockx as well as between Juventus and Blockeras in Italy. “The conflicts that happened 20 years ago with the emergence of the Internet will likely be transferred and reproduced in the Metaverse,” she said.

Carolina concluded by asking whether existing rules be applied in the Metaverse or do we need to adapt them or create new ones to regulate the new digital reality?

Christoph, who emphasised that he was not speaking on behalf of EUIPO, said: “Law reflects society, it defines society and is always behind society. The question is: is the law we do have still sufficient for what is coming up?”

He covered topics including the IP Register on Blockchain and classification: he explained the recent guidance on protecting virtual goods in class 9 using the text: “Downloadable digital files authenticated by non-fungible tokens, namely …” He also asked whether the perception of the relevant consumer is the same in the analogue and digital world, and how distinctive character, relative grounds, marks with a reputation and proof of use should be assessed. On the latter, he highlighted the recent Standard judgment of the EU General Court  on offering services in the EU.

Finally, Christoph noted there are questions about procedures and jurisdiction in the various online worlds. He concluded by noting that there are many challenges, and it remains to be seen how courts will address them.

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MARQUES does not guarantee the accuracy of the information in this blog. The views are those of the individual contributors and do not necessarily reflect those of MARQUES. Seek professional advice before action on any information included here.

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