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[Law Talk] Trademark issues in the metaverse world

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Lee Keun-woo (left) and Helen H. Hwang

The word ‘metaverse’, a portmanteau of the prefix ‘meta’ (meaning beyond) and ‘universe’, is generally used to denote a communal and interactive cyberspace where content, commerce and networking exist with permeability. growing with the real world. With new technical capabilities and an accelerated cultural shift to the web as a result of the COVID-19 crisis, the Metaverse is creating innovation that transcends time and space in all areas of industry and society. In particular, gaming, fashion and luxury brand companies are partnering with metaverse platforms to expand their market bases into the virtual world.

In the metaverse world, you can easily create a virtual person and a virtual brand, but would it be okay to create anything you want in the metaverse world, even items with trademarks of other people? Imagine that a company intends to create a virtual character to be active on the metaverse platform and use items bearing another person’s markings for the virtual character. The business may face a variety of legal issues.

First, there is a risk of trademark infringement. As a general rule, you can infringe another person’s mark when you use a mark identical or similar to the mark on goods identical or similar to the named goods, and thus confuse the consumer. In the context of the Metaverse, trademark infringement can occur if (i) the items used in the Metaverse are “goods” for the purposes of the Trademark Act, and (ii) the act of using the registered trademark in the real world on similar or identical media. the elements of the metaverse can be confusing to consumers.

The act of using another person’s mark in the metaverse can meet both of these prongs. For the purposes of the Trademark Law, the term “goods” is interpreted to mean “articles which have exchange value” and marketed (Supreme Court Decision 98Hu58). In light of such an interpretation, the items used in the metaverse can be interpreted as “goods” as long as they are traded with economic value. Since various brands such as Gucci, Nike and Puma have recently launched their products in the Metaverse by entering into contracts with providers of Metaverse platforms, using a registered trademark for real-world products in a corresponding product in the metaverse can confuse consumers that the product is being sold by the brand owner himself.

If a trademark possesses creativity, it may be eligible for copyright protection in addition to trademark protection. The Supreme Court has ruled that numbers used as trademarks can be protected under copyright law (Supreme Court Decision 2012Da76829). Therefore, using a trademark protected as a copyrighted work on material used for a virtual character in the Metaverse may also pose a risk of copyright infringement.

In addition to the potential risk of trademark infringement and copyright infringement, unauthorized use of another person’s trademark in the metaverse may constitute an act of unfair competition under the Prevention of Law. unfair competition and the protection of trade secrets. If you sell items displaying another person’s brand in the Metaverse, it may lead consumers to believe that the items are licensed or sold by the brand owner themselves. As such, it can be regarded as “an act of confusion with the property of others” which is prohibited as an act of unfair competition under Article 2 (1) (a) of the law. It may also constitute an act of prejudice to the economic interests of others by using the results obtained through a substantial investment of effort without authorization in a manner contrary to fair business practices ”as prohibited under Article 2, paragraph 1, point k) of the law, given that (a) a well-known mark generally falls within the scope of such realization; (b) the use of the mark on articles can, directly or indirectly, increase the notoriety of the virtual character using these articles; and (c) several brands have already entered into formal contracts to launch their products on metaverse platforms.

In sum, the reach of laws relating to the use of trademarks in the real world can extend even to the world of the metaverse. In this context, the world of the metaverse is not completely cut off from the real world, but can be seen as an extension of it.

Lee Keun-woo and Helen H. Hwang

Lee Keun-woo is a partner at Korean law firm Yoon & Yang, with expertise in intellectual property protection, privacy protection, trade secret protection, including e-commerce and other laws. on technologies, media and telecommunications. Helen H. Hwang is a Qualified United States Attorney at Yoon & Yang, with expertise in the areas of Intellectual Property, Technology, Media & Telecommunications, and Corporate Law. – Ed.


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