As big brands increasingly engage in developing their metaverses or joining one, new issues have occurred in protection and enforcement of trademark rights in this unchartered virtual world.

As part of its global metaverse trademark portfolio, Nike's applications in Taiwan for some of its most valued marks including "Nike", "Jordan", the "swoosh" logo, and the slogan "Just Do It" to be used in metaverses are currently under examination of the Taiwan IP Office (TIPO). According to our search into TIPO's public database, the designated goods and services in these Taiwan applications are:

  • Class 9: Downloadable virtual goods, namely, computer programs featuring footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use online and in online virtual worlds.
  • Class 35: Retail store services featuring virtual goods, namely, footwear, clothing, headwear, eyewear sports bags, backpacks, sports equipment, art, toys and accessories for use online; on-line retail store services featuring virtual merchandise, namely, footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories.
  • Class 41: Entertainment services, namely, providing on-line, non-downloadable virtual footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use in virtual environments.

Some of these applications have received Office Actions since May 2022, in which TIPO requested amendment to the description of goods & services. TIPO's amendment suggestions are unknown yet, so are NIKE's responses. It remains to be seen whether and how the above style of description of "virtual goods/services" will be acceptable to TIPO.

Although not a party to WIPO, Taiwan adopts the Nice Classification of Goods and Service for categorizing goods and services, while dividing the Nice Classes into sub-classes and different groups based on local practices. However, TIPO has yet to issue any specific guidelines as to how trademarks to be used for "virtual products and services" can be filed for protection. Nor has this question been answered in any guidelines from TIPO; for example, should "virtual clothing and footwear" be categorized in Class 9? Are they related to the goods "real clothing and footwear" in class 25? Probably these questions will be addressed on a case-by-case basis before the next update of the Trademark Examination Guidelines and the sub-classes.

"Meta" or "Metaverse"-formative marks

According to the data released by the TIPO, applications containing the word "Meta" or "Metaverse" have been on the rise since 2021. However, are these marks registrable?

Under Article 29.1 of the Taiwan Trademark Act, a merely descriptive mark consisting exclusively of a description of the quality, intended purpose, material, place of origin, or relevant characteristics of the designated goods or services cannot be registrable since it is devoid of distinctive character.

Our search into TIPO's online database reveals that TIPO has questioned the inherent registrability of some "Meta" or "Metaverse"-formative marks on the ground that they are descriptive of the designated virtual goods and services. Under the local practice, an approach to enhance registrability of such marks is to file them in combination with other distinctive words/device or prove the existence of a secondary meaning through use.

Furthermore, if a "Meta" or "Metaverse"-formative mark is sought to be registered in respect of "real world" products being remote in nature from virtual goods and services, such as cosmetics and perfumery for the care and beauty of face, the chances of success in registering "Metaverse"-formative marks will also be increased because the source of product rather than the product itself is adequately identified.

Infringement issues

As it can be expected, legal issues may arise when virtual goods (such as virtual apparel) bearing a registered trademark of others in the real world are used (such as worn by an avatar) in a metaverse. When a mark registered in relation to "real clothing" in Class 25 is being used on "virtual clothing" in the metaverse, it is possible to mislead consumers into believing that the virtual clothing is offered or licensed by the real clothing company, namely the trademark owner.

Whether and how Taiwan's IP rights which are originally meant to apply in the real world can be extended or converted to a virtual world is another difficult issue, as differences between real world goods and virtual goods do exist. Under the current practices, it is unclear whether the use of a trademark in respect of a virtual product constitutes use in respect of a real world product covered by a trademark registration.

For the sake of prudence, conducting a trademark availability search is imperative for a metaverse developer before launching a virtual product in its metaverse, as it helps determine whether there exist any prior registrations/applications and it helps avoiding the risk of using others' brands on the virtual products/services.

If a stylized brand satisfies the "originality and creativity" requirement, it is entitled to copyright protection in addition to trademark registration. Accordingly, unless a "fair use" defense can be established, unauthorized reproduction of a trademark eligible for copyright protection on "virtual products" used for their avatars in the metaverse will likely lead to copyright infringement in Taiwan.

The foregoing presents just some examples of legal issues already posed by metaverses, while other complicated issues such as jurisdiction, contractual and privacy issues will surely arise as metaverses continue to evolve to challenge the established legal landscape absent any precedents in this regard. It remains to be seen whether and how the legal regimes applicable to the registration and use of trademarks in the real world will extend to the virtual world.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.