Quarterly International Ip Law Update

• Jurisdiction: United States,Federal
• Citation: Vol. 47 No. 1
• Publication year: 2022
• Author: David Tseng
• topic: Intellectual Property,Technology

QUARTERLY INTERNATIONAL IP LAW UPDATE

AUTHORS

David Tseng
TSMC

Mariana Noli
Noli IP Solutions PC

Leaf Williams
Reichman Jorgensen LLP

METACLASH: WHOSE REALITY IS IT?

A court in the Northern District of California has noted that "the concept of a metaverse is a digital virtual world where individuals can create character avatars and play them through interactive programed and created experiences" and that a metaverse "both mimics the real world by providing virtual social possibilities, while simultaneously incorporating some gaming or simulation type of experiences for players to enjoy."¹ The term "metaverse" was coined in a 1992 science fictional novel by Neal Stephenson that imagined a digital escape from a collapsed global economy in which lifelike avatars met in realistic 3D virtual reality environments.²

Facebook incidentally rebranded to "Meta" in the past few months, and its founder Mark Zuckerberg believes that the metaverse is "the future of the internet" though he cautions that it could take ten years before many features become mainstream.³ However, multiple companies have already begun offering services to early adopters. To name a few examples, Meta, in tandem with its acquisition of Oculus, has constructed a virtual world where avatars connect to socialize, work, and travel with VR headsets and has already made available a beta virtual meeting space called Horizon Workrooms.⁴ Microsoft has revealed plans for bringing holograms and avatars to Microsoft Teams and is currently working with the U.S. Army on augmented reality headsets for training.⁵ Roblox offers scores of user-generated games in which players can build homes, and engage in role playing work and play scenarios, and has also teamed up with Vans to create a virtual skateboarding park with a garden where avatars can buy clothing and accessories.⁶ And Epic Games' Fortnite has hosted in-game concerts, virtual movie and TV screenings, and roundtable discussions.⁷ New Year's Eve 2021 also saw celebrations taking place in the metaverse, with a ball drop in Decentraland, hosted by virtual landowners inside the platform, and a planned DJ set inside Paris World.⁸

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These new and developing worlds pose many different problems and possibilities. Virtual environments and social media have been linked to disinformation campaigns, digital espionage and surveillance, harassment, discrimination,⁹ and decreasing human interaction. This has dampened the original promise of social media: increased freedom and transparency in expression, improved communities and networks, and revolutionized work and play.

In addition to the many social, political, and economic topics stimulated by the metaverse, a host of legal challenges will also be presented. And although one of the features of the metaverse is to instantiate a virtual "space" with real users, this "space" has no national boundaries, thus blurring the lines between corporations, governments, and the public at large.

Indeed, the metaverse will likely pose inter-jurisdictional clashes regarding intellectual property ownership, rights, and policing, as existing regimes tend to provide border-bound rights. Some of these contradictions are already apparent and will continue to collide. But the movement of avatars within the new worlds may act as a cynosure for various IP issues. For example, avatars may want to experience patented amusement park rides,¹⁰ drive fancy trademarked vehicles and wear famous brand clothing,¹¹ or play copyrighted videogames and movies with their friends. Such desires may spur new creation (including potentially infringing imitations) and they may also court outright and purposeful violation of IP rights.

Below we highlight just a few of the issues that are likely to require resolution in the future.

» Authorship: The metaverse could contain virtual creations by avatars and AI.¹² As noted in a prior article,¹³ the international community has not yet come to a consensus over whether an artificial entity can be deemed the inventor of a patent. While patent offices in multiple countries (including the U.S., the EU, and the UK) have rejected the idea, patents have been granted for AI in South Africa and Australia. Likewise, an article in WIPO Magazine notes that "[m]ost jurisdictions...state that only works created by a human can be protected by copyright. But with the latest types of artificial intelligence, the computer program is no longer a tool; it actually makes many of the decisions involved in the creative process without human intervention."¹⁴

» Data Protection: With the continuous development of metaverse related technologies, there is considerable concern over protection of user's personal data and privacy. The collection of personal information by companies and individuals operating inside the metaverse could become even more intrusive so as to provide users with an immersive interactive experience. Significant amounts of biometric, financial, and other personal data will be collected for each user. However, there are notable jurisdictional differences regarding data protection approaches. While US data protection and privacy laws tend to be more sector-specific (e.g., the Health Insurance Portability and Accountability Act and the Federal Information Security Management Act), and certain states have other more specific and targeted laws,¹⁵ the European Union's General Data Protection Regulation is considered quite a bit more stringent.¹⁶
» NFTs: 2021 magnified discussions in the IP world about NFTs (non-fungible tokens)—which may revolutionize the artistic world at many levels—and experts in our field discussed many of the IP related issues they pose. But many questions about these digital tokens still remain a mystery to be solved, in some cases by the courts. Coincidentally, it could be NFTs that end up facilitating

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