Part 4 of our 5-part series of articles
A number of exciting questions arise in trademark law in connection with the increased use of trademarks in virtual spaces.
I. Use of trade marks in the metaverse
1. Trade mark application
The first problem is the extent to which goods and services must be designated when applying for a trade mark. The trade mark offices have now established guidelines for the classification of virtual goods and NFTs. The application for “virtual goods” or “NFTs” is usually too abstract as a designation, so that these indications should be concretised (“virtual clothing”). Clothing trade marks are not necessarily infringed by the use of digital clothing. It therefore makes sense to supplement the existing trade mark protection with a new application in order to prevent third-party applications.
2. right-preserving use
It is also important to ensure that the registered trade mark is used in a way that preserves the rights in order to withstand an objection of non-use by third parties and to avoid losing the trade mark in invalidity proceedings. However, the prerequisite is that a sufficient connection between the respective virtual product and the trade mark is recognisable, e.g. in that the virtual product can be purchased as a physical product in an online shop. In the context of the right-preserving use of a trade mark for services, the decisive factor is whether the virtual service has the same effect as if it were provided in real life.
II. Trade mark infringements
If trade mark infringements occur in the metaverse without the consent of the trade mark owner, the unwritten elements of trade mark use and likelihood of confusion must be examined. The decisive factor here is whether the use of the trade mark in the virtual space is trade mark-related or decorative.
1. Trade mark use
The aim of the metaverse is to depict real life situations, so it makes sense to transfer trade marks from real life into the metaverse. If trade marks are used in the metaverse for advertising purposes, everything speaks in favour of trade mark use.
2. Risk of confusion
Virtual products can resemble their real-life counterparts in the simulated environment. This alone does not constitute a likelihood of confusion. There is a likelihood of confusion if the goods are manufactured by the same companies or sold in the same places. Further criteria relate to the type. Similarity only exists if the manufacturer is responsible for both the real and the virtual offer. Services can also be similar. The decisive factor is whether the services are provided both in real and virtual space, as is the case with the sale of insurance policies or travel bookings.
3. Exhaustion
The exhaustion of a trade mark presupposes the physical marketing of a product. However, it is unclear what happens if the original product serves as a template for the virtual counterpart. As soon as the trade mark owner has placed the product bearing his trade mark on the market for the first time, he is prevented by trade mark law from controlling the use of his trade mark. If it is a mere reproduction of the original, this is permissible due to the exhaustion of trade mark rights. However, if the product is an own product, for example if it is resold, this is not the case and the trade mark owner can claim trade mark infringement.
III. Application of the law and enforcement
Difficulties arise when determining the place of jurisdiction of the acting persons and the applicable law in the Metaverse. In principle, it is based on whether there is a sufficiently economically relevant domestic connection in the relevant territory. However, this is difficult to determine in the metaverse, so that a different solution must be found.
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Part 1 in issue 16-17/2023: Overview
Part 2 in issue 18/2023: Copyright
Part 3 in issue 19/2023: Contract and competition law
Part 5 in issue 21/2023: Data protection