THE METAVERSE: A VIRTUAL WORLD WITH REAL WORLD LEGAL CONSEQUENCES.

• Author: Cantley, Beckett

1. INTRODUCTION

   Wade Watts races down an empty subway line in his 1981 DeLorean DMC-12. The finish line is in sight; nothing can stop him from winning. Suddenly the subway platform in front of him is destroyed, leaving a massive cliff that will certainly kill him. He slams on the brakes sliding to a stop, barely surviving. If he crashes here, he loses everything, even if it's only virtual reality. The only virtual part is the race. The money, the consequences, and the feelings are reality to him, and they mean everything.

   As Wade Watts removes his headset, his senses refocus on his real-world surroundings instead of those of the virtual universe where he (like the rest of the characters in this dystopian science fiction action-adventure film Ready Player One) spends the majority of his time. (1) The smell of rust, metal, and filth is everywhere inside the abandoned utility van where Wade hides out to "plug in" to the OASIS, a vast virtual world where anyone can be and have anything he or she desires. Is it so hard to envision a world where all the oil has run out and the climate is a wreck, leaving reality to be an immensely ugly place? With the rise of modern-day virtual worlds, it doesn't seem so. While the world may not be out of oil and the climate remains salvageable, people, nevertheless, are already turning to this concept of an augmented reality.

   This article provides an overview of virtual worlds, or the metaverse, and their economies, together with a survey of the real-world legal consequences that arise therefrom. While there is a wide range of legal issues that will come from the metaverse, this discussion will focus primarily on the most prevalent current legal concepts related to the metaverse: intellectual property, criminal law, tort law, property law, and antitrust issues.

2. WHAT IS THE METAVERSE?

   The metaverse is a world where virtual reality and a digital second life converge into one with a focus on social connection. (2) "For decades, technologists have dreamed of an era when our virtual lives play as important a role as our physical realities. In theory, we would spend lots of time interacting with our friends and colleagues in virtual space. As a result, we would spend money there, too, on outfits and objects for our digital avatars." (3) That's right: lots of time and money, and platforms like Roblox and Decentraland make it easy. Roblox, for example, is the world's largest online game creation platform, where you can create games and share them with others. (4) Decentraland, in slight contrast, is a browser-based platform where users may "create, explore, and trade in the first-ever virtual world owned by its users." (5)

   The economies of the metaverse are akin to the real world; there are creators and consumers. Individuals may earn "real" money, like USD or cryptocurrency by creating games and other types of consumables. People may also pay to play or pay to purchase all that the virtual world has to offer.

   Methods of payment, of course, are digital. Electronic payment systems, like credit and debit cards, load user accounts with game currencies. Alternatively, on certain platforms, users may create their own type of currency. Cryptocurrency is accepted in the metavcrse and brings along a certain degree of anonymity both crypto and the metavcrse have to offer.

   Non-fungible tokens are gaining popularity due to a couple of high-profile stories in recent news cycles. A non-fungible token ("NFT") is a non-interchangeable unit of data stored on a digital ledger that can be sold and traded. (6) Coinbase explains it as: "NFTs...are a special kind of cryptoasset in which each token is unique--as opposed to "fungible" assets like Bitcoin and dollar bills, which are all worth exactly the same amount. Since every NFT is unique, they can be used to authenticate ownership of digital assets like artworks, recordings, and virtual real estate or pets." (7) In other words, NFTs are analogous to a certificate of authenticity for digital artifacts, which are currently being used to sell a huge range of virtual collectibles. (8)

   Virtual collectibles in the metaverse include personal and real property. Personal property bought and sold using NFTs include items such as: NBA virtual trading cards; (9) music and video clips from EDM stars like Dcadmau5; (10) video art by Grimes;" and the original "Nyan Cat" meme. (12) Even a tweet by Dallas Mavericks owner and entrepreneur Mark Cuban was sold for nearly $1,000 USD. (13) Remember Elon Musk's tweet regarding Doge coin? Me too, and as it turns out, the tweet is on the market for nearly $8,000 USD. (14) In February 2021, a 10-second video by an artist named Bceple sold online for $6.6 million USD. (15) Around the same time, Christie's put a collage of 5,000 "all-digital" works on a virtual auction block with a starting price of $100 USD. On March 11, it sold for a staggering $69 million USD. (16) Demand for virtual real estate is no different. Prices for land in the metaverse are surging, (17) as individuals may purchase their very own virtual "blackacre" online through platforms like Decentraland. (18)

3. REAL WORLD LEGAL CONSEQUENCES OF METAVERSE ACTIONS

   1. IP ISSUES RELATED TO THE METAVERSE

      So, what does all of this mean for the real world and where does it intersect with reality in meaningful ways? As virtual worlds and metaverses boom, so do disputes over intellectual property and legal content. (19) Simply type the word "metaverse" in your Google browser, and you will quickly learn lawsuits between users and metaverse companies are cropping up left and right. As a result, patent, (20) copyright, (21) and trademark (22) claims are ripe for the courtroom, and the question of who owns which rights is not simple. In the real world, as well as the metaverse, the defining line between a novel invention and a modification of the same remains the crux of the matter. A more important question for the metaverse perhaps is whether abstract ideas are even patentable. (23)

      It is unclear where the law will fall regarding metaverse content, but several current, real-world disputes provide breadcrumbs of insight. In Google, LLC v. Oracle America Inc., Oracle sued Google for copyright infringement after Google implemented an operating system that used the same names, organization, and functionality as Java's (a company owned by Oracle) Application Programming Interfaces ("API"). (24) Ultimately, the federal district judge held that APIs are not subject to copyright because "permitting a private entity to own the copyright to a programming language would stifle innovation and collaboration, contrary to the goals of copyright." (25) The U.S. Court of Appeals reversed the lower court, finding that the Java APIs are copyrightable but ignoring a possible fair use defense. (26) The U.S. Supreme Court denied Google's petition for certiorari. (27) The Court, instead, assumed a software interface would be subject to copyright protection and concluded Google's copying of Java's API use was "fair use," a defense to copyright infringement. (28) The case is instructive in real life because the Court outlines four statutory factors to determine what constitutes "fair use" of copyrighted material. (29) However, the case is less helpful in evaluating the scope of copyright protection afforded to the metaverse because did not explicitly determine whether copyright protection extends to software interfaces. Granted, it seems likely that the Court will issue a ruling in favor of copyright protection, based upon the majority and dissent's presumptions that copyright protection would apply to these interfaces. (30) For the virtual worlds and metaverses, a ruling in favor of copyright protection could mean wholesale exclusion of certain languages, codes and messages that programs use to communicate with each other and to the hardware, at least for users and metaverse companies who do not own the rights.

      Ongoing claims of copyright infringement exist not only for programming interfaces but also for virtual fashion and merchandise. In early January 2022, Hermes, a French luxury brand, filed a complaint after a virtual artist created a series of NFTs of the company's iconic Birkin handbags. (31) The cost of real Birkin handbags can reach beyond six figures and the alleged virtual replicas do not fall too far behind. (32) If a deal cannot be reached, the future of virtual fashion and merchandising for this at least one virtual artist will no longer be limitless.

      Similarly, musicians and songwriters have newfound claims for rights to their music that is played in the metaverse. Roblox recently settled a lawsuit filed by the National Music Publishers Association ("NMPA"). (33) Roblox users may play games that offer music streaming, as well as attend virtual concerts. (34) Thus, the NMPA claimed copyright infringement regarding the unregulated audio. The settlement gives publishers an opportunity to decide whether they want their music to be included in the virtual world, and it offers "new ways for songwriters to monetize their music." (35)

      Given the above, the risk of ligation for metaverse companies is a real problem. The Digital Millennium Copyright Act ("DMCA") appears, however, to provide some relief for metaverse companies under certain safe-harbor provisions. For example, "[i]f an individual user inserts unauthorized copyrighted material into the metaverse, only that user should be liable for infringement and not the metaverse company... and third parties can use the takedown notice provisions of the DMCA to have the copyrighted material removed." (36) Due to the complex landscape of the virtual world, it seems likely that more legislation with safe-harbor provisions (like DMCA) will be passed to aid metaverse companies with content regulation and alert users to the law of the virtual land.

      Beyond copyright, symbols and words legally registered to companies or products form an...