IP in crisis – the Metaverse and digital tokens

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    (Mage by Brian Penny from Pixabay)

    Hardly a day goes by without more extravagant claims being made about technologies like Artificial Intelligence, Web 3.0 and the Metaverse (or Multiverse, if you prefer). The virtual world surrounds the physical world with endless vendor bubble bubbles.

    But apart from the hype, one thing is clear. These technologies pose potentially significant existential challenges to current concepts of intellectual property, copyright, licenses, and assets. These are no small concerns given the number of industries, careers, and income streams that are based on the pillar of “I made this/I own this, so pay me.”

    Multi-trillion-dollar companies (U.S. technology platforms have so much gravitational pull and are rapidly becoming a black hole of socio-economic power) that we forget such trivial concerns and spend cash on them. I would like to pass it on to But what does the legal community think?

    Why do these technologies pose challenges to current IP ownership models? Will they even enhance them? The first of three linked reports will focus on the metaverse and the digital or crypto assets people use in the virtual realm, while the next two in the series will focus on AI.

    Andres Guadamuz, PhD, Intellectual Property Law Leader at the University of Sussex and Editor-in-Chief of the Journal of World Intellectual Property, was speaking at the Westminster Legal Policy Forum this week. He’s also a former gamer, and uses a recent cinematic vision of that world as a starting point to explain the problem. he says:

    How you think about intellectual property in these spaces depends a lot on the type of metaverse you get.there is [movie and book] “Ready Player One” Metaverse. In that movie, the Metaverse only has one he and one company that manages the entire space. This is almost a nightmare for regulators. One company wins the Metaverse War.

    Then there’s the “Ralph Breaks the Internet” metaverse, where different platforms coexist and are connected to each other via common protocols.So people can jump off one game [or realm] to another person. You can probably use the same account and it will be permanent in all these spaces.

    And then there’s what I call the “Insane Multiverse.” But that’s what we have now. There are many metaverses.

    All of this is a serious problem when it comes to intellectual property in these spaces because there isn’t much ownership. Of course there are intellectual property rights, but they are generally mediated by contract. And this has been the case with him since the 1990s. We have a platform, we have an end-user license agreement.

    I always say “if it’s not your server, it’s not your property”. Because you can take it with one switch. So whenever you think about intellectual property, you’re better off thinking about decentralized services.

    Recently, the recent discussion about the “metaverse” has come as a shame to the company formerly known as Facebook. Mark Zuckerberg was convinced the future looked like his 90s video games immersive, and along with WhatsApp and Instagram he bought an Oculus and spent billions of dollars to make it a (virtual) reality. I threw

    The gamble was so bold that it changed the company’s badge. But in terms of generative AI and Web 3.0 in 2023, it’s questionable at best. Will Facebook’s baby boomers and Gen X users really wear headsets to combat the constant hordes of low-grade advertisers and “recommended content” that have taken control of the Facebook platform? You’ll think Moga meta is desperate for cash!)

    But as the web morphs in so many ways that the T1000 just wants to be your friend, intellectual property concerns are justified. In Guadamuz’s view, he has three different intellectual property models in our digital space. And increasingly, this is where tokenization comes into play.

    The first is a private, closed model where the platform running the service owns everything and is mediated (as we have seen) by the end-user license agreement.

    This might explain why Facebook/Meta made its early foray into digital currency with Libra/Diem: 3 billion people see faces every time they log on and see their friends’ holiday snaps. A token to spend on a giant ad boot that will be imprinted on your .

    Guadams says:

    [In these cases] There is an interface with the IP, but for now it belongs to the platform owner, so digital assets may need to be thought of as mere licensing agreement entries.

    Today, this remains the most common licensing agreement in the virtual world. Therefore, in these cases, all digital assets (including those created on their platform) belong to the provider. he continues:

    The second is an open model. [early virtual realm] Second Life has been around since the beginning: if you created a character, land, or thing, you weren’t the server, but you owned those things. You have acquired intellectual property and rights to it. This is documented in the Platform Configuration, End User License Agreement.

    This is still a fascinating, utopian, but rare idea. The problem is resources, he says, Guadamuz. Who owns and maintains the servers and who pays for the space?

    he adds:

    Then there is the third property option, Web 3.0. So Web 1.0 was the early Internet, a read-only Internet. And Web 2.0 is the readable and writable internet, user-generated content.

    In Web 3.0, there is the idea of ​​brokering ownership of property and assets through tokenization, such as non-fungible tokens (NFTs). However, you will now be able to take ownership of those things and move them from one world to another.

    Theoretically, at least. But as we explored in previous Metaverse reports on banking and healthcare, the notion of being able to move seamlessly from one virtual realm to another (as opposed to Web 3.0 networks running on blockchain) is It’s complex and full of security, privacy, and identity. , and an authentication challenge.

    What if people don’t want to be personally identified in that realm? Not for criminal purposes (although that may also be a factor), they simply want to play, experiment, escape the real world. Is it from? But game developers are very skeptical of his Web 3.0 model, he adds.

    New world meets old world

    From this perspective, Meta’s strategy (and the current Metaverse concept itself) looks more and more like Web 1.0. The company’s early metaverse design reinforces the impression that the 1990s lives on in Zuckerberg’s mind. In fact, it’s almost a Victorian concept. A giant corporation wearing a beanie instead of a hat on the stove, owning loyal citizens and being able to toss tokens to spend in the company’s store.

    How quirky! But it doesn’t work, and the platform seems increasingly broken and filled with advertising noise. It could be seen as a Big Tech hedge to the Web 3.0 model of peer-to-peer networks, transferable IP, and ownership of digital assets on the system.

    An AI with a voice from the 1930s appears at public horns.

    Citizens! Why own things? Let us own them for you instead! Stop making things yourself. It’s boring and you don’t have the time or money. So scrape all your data online, including yours, and sell derivative content for a few dollars a month (price increases in the future: conditions may apply). Fire all your creatives! Hate anyway! They even hate themselves! Shut up and press the button, Noble Imagineer and Prompt Engineer! (distant giggles and giggles) Have a nice day!

    But I digress.

    According to Guadamuz, the Web 3.0 model is increasingly supported by case law and jurisprudence. This is different from the uncontrollable world of generative AI.

    he says:

    First, digital assets are now recognized as assets. [In the UK] There is a proposal by the Legal Commission. A new property law and model for digital assets. So there is another category in English law. [digital assets]That’s the suggestion.

    A recent Bitcoin theft lawsuit, AA vs Persons Unknown (2019), established that crypto assets are property and can be pursued in court. Osbourne vs Persons Unknown & Anor (2022) established that NFTs are also property. D’Aloia vs Persons Unknown and Others (2022), on the other hand, not only proved possession of a digital asset, but also used NFTs to send an injunction. Who knew the courtroom had a sense of humor?

    Meanwhile, Yuga Labs, creator of the groundbreaking Bored Apes Yacht Club (BAYC) NFT craze, sued conceptual artist Ryder Ripps for cloning and selling the entire collection. Other complaints abound: false designation of origin, false advertising, cybersquatting, unfair competition, unfair advantage, diversion, unlawful interference, and trademark infringement.

    Just “Old World”! “Meet your new boss like you did your old boss”, apparently. Lipps countered that his work was free speech and, in his view, a protest against what he claimed was a racist image of BayC’s dog whistle.

    Guadamuz explained that another interesting case is underway. Barcelona-based intellectual property organization VEGAP vs Mango is involved with a fashion brand that produces and exhibits his NFTs of the work of four Catalan artists. [virtual centre for digital assets] Decentraland. VEGAP sued to have her NFT removed from its metaverse and is now stored in the court’s secure digital wallet.

    Given the billions of dollars associated with brands and exclusive merchandise, the world of fashion seems particularly prone to these challenges. The recent case of Hermès v. Mason Rothschild involved the artist’s Meta Birkin Project, an NFT collection of Hermès’ iconic Jane Birkin handbags. not related to trademark infringement.

    Hermès won the case and received a prize of $133,000. This is enough money for him to buy one of the rarer bags.

    my view

    It’s tempting to see these issues as a clash between the utopian world of free, cross-border data movement and sharing and the Victorian world of ownership and ownership, but the new guards are like the old guards. It is worth noting that you act quickly on

    Increasingly, it is actually a clash of giant US corporations against the individuals it claims to help. We’re trying to stick with what little we’ve left behind. Can Web 3.0 do it? Maybe. But until then, we’ve given up on the very notion of building our own as multinational corporations fling generative AI toys at us. More on that next time!


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