(...)As far as the application of trademark law is concerned, much is still unclear in this context. The principles developed to date by law and jurisprudence can only be applied to a limited extent to this as yet relatively unknown field. The following article explains the extent to which trademark protection in the real world also applies in the virtual realm and what significance this has for the future trademark strategy of companies.
1. Emergence of trademark protection in the metaverse
The German Trademark Act [Markengesetz, MarkenG] provides various ways of obtaining trademark protection. Through registration of a trademark in the relevant registers (Sec. 4 No. 1 MarkenG); through reputation gained as a result of the intensive use of a sign in the course of trade (Sec. 4 No. 2 MarkenG) or through gaining general brand awareness (Sec. 4 No. 3 MarkenG). For the metaverse, various peculiarities have to be taken into account in the cases mentioned, which we examine in more detail below.
One way of obtaining trademark protection is registration in the trademark register. Each application must be accompanied by a list of goods and services. This raises the question of which classes actually cover virtual goods and services. Due to the increasing number of applications containing terms relating to virtual goods and non-fungible tokens (NFT), the European Intellectual Property Office (EUIPO) has published an approach for classification purposes (Source). According to this, virtual goods fundamentally have to be registered in class 9 of the Nice Classification. Virtual services are to be treated in line with the established principles for classification of services, i.e. typically registered in classes 35 and 41. To be borne in mind in this respect is that the term "virtual goods" is not sufficiently clear when used on its own. The content to which the respective virtual goods refer therefore must be included in the trademark application. Consequently, the EUIPO does not classify virtual goods in the classes to which the corresponding physical goods would be assigned. This is based on the separation of digital and physical goods prescribed by the Nice Classification.
Trademark protection may also arise from the use of a sign in the course of trade, provided that the sign has acquired a degree of brand awareness as a trademark amongst the relevant public. This requires both the use of the trademark in the domestic market and the brand awareness acquired through such use. When these requirements are met is problematic in the context of the metaverse. Use presupposes the use of the sign for which trademark protection is claimed. If trademark protection is claimed in respect of a virtual good, it is therefore necessary that such use takes place in the virtual world, i.e. in the metaverse. Use in the real world is not required. Furthermore, the trademark must acquire a degree of brand awareness, i.e. the relevant public is familiar with the sign and understands it as a trademark. With regard to virtual products existing exclusively in the metaverse, the relevant public will thus consist of the users of the metaverse. It is necessary that a more than insignificant part of the relevant public establishes a connection between the sign and the trademark proprietor.
The creation of trademark protection through use of the sign also requires its use in the course of domestic trade. In the case of the metaverse, however, the determination of domestic trade is problematic. The metaverse is accessible from everywhere. Because this problem has already arisen in the case of trademark protection on the internet, the principles developed there can at least partially be transferred. It is a recognised fact that the domestic connection has to be examined on the basis of a catalogue of criteria. There has to be a so-called "commercial effect" in Germany. For example, factors that may be taken into account are whether the products in question are delivered to Germany, whether the prices are indicated in euros and whether German contact details are indicated. However, these criteria are only partially suitable for determining a domestic connection in the metaverse. For example, if an image is used as a basis, the fact that the metaverse can be accessed from any location, is designed exclusively in English and payment is only possible in cryptocurrency, would render it impossible to establish a reference to a specific country. In addition, there is no actual physical delivery of goods purchased via the metaverse. Rather, the recipient of the delivery is only the avatar in the virtual world, to which no location in the real world can be assigned. This poses new challenges for legislators and jurisdiction.
Finally, trademark law stipulates notorious brand awareness as a condition for the establishment of protection. For this purpose, notorious brand awareness in the domestic market is required. Not a requirement, on the other hand, is domestic use. Case law requires a "general brand awareness", which is set at significantly more than 50%. Compared to the difficulties in determining domestic use, the determination of domestic brand awareness should therefore be easier. Despite the fact that a higher degree of brand awareness is required, this variant is likely to play a more than insignificant role in the establishment of trademark protection in the metaverse.
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