Facebook's rebranding to Meta and a commitment of $10 billion towards its Metaverse division is a clear indication of the direction of travel. 

The metaverse - what exactly is it?

Tech experts predict that the Metaverse will become a rich 3D manifestation of our real world today. 

Imagine a weekend 20 years on. You're in your favourite chair with your freshly brewed coffee wearing your 3D gear, which and allows you to enter your virtual property where your avatar is also drinking coffee - albeit virtually. Like everything else in the Metaverse, it's just data. 

Exactly how will that data, including our personal data, be assembled, displayed, and shared to establish our virtual identities?  How will the virtual representations of real-world proprietary products and services be protected in this virtual world?   Will IP rights persist there, and if so which ones?  Will others be relegated to the world of the tangible?  The outcome of these questions may be of epic importance for businesses gearing up to offer the multitude of virtual products and services to be transacted over the course of Metaverse time.

We know the products and services in our real world may be the subject of valuable IP rights, governed by national governments, and by an ever-expanding set of global treaties and collective actions. The start-up sector has become more familiar in recent years with just how critical IP rights are, as an asset and a tool in any scale strategy.

The evolution of IP to meet changing demands

This isn't the first time that IP has evolved to meet changing demands and trends. Back in the ‘70's, software "per se" was initially regarded with scepticism and was declared unpatentable in most jurisdictions.  IP professionals quickly developed techniques to embody software in technical clothes to provide something other than software "per se", and soon were obtaining patents in most jurisdictions for "computer-implemented" inventions with a "technical effect."

Meanwhile, a new vacuum cleaner today may embody patentable features, like those made famous by James Dyson in the '90s. New products with outstanding aesthetic features, may be protectable by registered designs, such the popular air fans we've seen recently.  But both the new vacuum cleaner and new air fan are tangible: we actually touch, purchase in a well-established commercial transaction, and own them.  Likewise, the dust in your lounge, or the stale air in your bedroom are things we physically experience.   

How IP laws in the physical world and the metaverse differ

In the physical world, an owner of IP rights such as patents, registered designs, trademarks, and copyrights can enforce them against unauthorised activities. Will the owners of proprietary products and brands be able to monetise in the same way in the Metaverse? Two factors may determine the outcome: the virtual unauthorised use leading to a real-world unauthorised use, and second, a physical location tied to the virtual use, for purposes of defining legal jurisdiction and the laws that apply to this virtual existence. 

When our avatar pushes a button on a virtual coffee machine, it's not an actual "use" in the physical sense, but more like a representation of one. The virtual design embodied by the virtual coffee machine may be identical to the real-world version, and the virtual design may have a direct bearing on a real world purchase.  Your friends (living anywhere of course) might drop into your self-designed virtual location for their own virtual cup of coffee from the same branded coffee machine and they hear that you "love the coffee."

It's popularity might then lead to an unlicensed competitor selling an unauthorised coffee machine where your friends are looking forward to purchase their own. The IP rights holder would be able to take action against the unauthorised use by the manufacture, use and sale of the physical machine as a result, in the locations where the unauthorised coffee processor is manufactured, used and/or sold. The key here is that the IP rights holder would need to have evidence of the location of these activities. In the case of your friends, their web address would be a key indication of location but only if that information is available and not "anonymised" or otherwise privacy protected. 

What this means for the free market

Global economies have been governed directly by the various national governments under our currently existing regulatory IP infrastructure. Meanwhile, rudimentary segments of the Metaverse have been around for some time, as gaming, role playing and social platforms, which are the property of the domain owner, as the gate keeper of the rich virtual experience.   By analogy, city-state economies evolved and grew in the middle-ages, each controlled by an independent leader. Eventually, and with the exception of a few, most such city-states became federations that are the countries we now know.  

In the Metaverse, the independent leaders might be the domain owners of the discrete virtual worlds we will visit.  Your seaside paradise might be accessible by one domain, and the purchasing of the physical version of that great virtual coffee machine may be accessible by another domain, perhaps by way of a partnered link from one to the other, and under the care (and control) of the domain owner(s). They may in effect become "intermediate regulators" which may quite likely interrupt our current regulatory IP framework, particularly for virtual products and services with essentially no real-world link. 

The Metaverse could massively challenge the global IP regime. Time will tell, and perhaps sooner than we can even imagine.

By Jim Gastle, an IP enthusiast, Canadian patent agent and co-founder of Terrifio, a client viability platform curated for IP professionals, which was developed as a result of over 35 years' working with entrepreneurs and inventors.