The Metaverse continues to garner significant attention across a number of industries. Rapid technological developments in areas such as sports, media, entertainment, gaming and retail, fueled by the global pandemic, have led a number of brands to engage in a variety of Metaverse projects to engage with consumers in new, innovative ways to get in touch.

The sport has been at the forefront of these developments, engaging with the Metaverse early on and trying to experiment with different platforms and projects. Given the primacy of intellectual property rights for sports brands – the very lifeblood of their commercial program – it is imperative to give due consideration to the IP issues involved in launching or participating in a Metaverse project.

State-of-the-art fan engagement

Rightsholders across sports have begun experimenting with the Metaverse in a variety of ways, hoping to leverage their global fan base and important, high-value intellectual property to engage a new generation of fans (and potentially generate new revenue streams).

For example a Premier League football club, Manchester City have partnered with Sony to build an online fan community Here, fans can gather in the Metaverse at a virtual replica of Etihad Stadium and, as avatars, explore the grounds, interact with others and participate in fan engagement opportunities. Additionally, in Spain, LaLiga has entered into an agreement with TVM to become their official Metaverse partner to build the league’s fan base through interactive experiences. TVM’s blockchain-based “Triverse” is billed as a “metaverse for esports” where teams and leagues can create cities for their fans to explore, access exclusive content and participate in mini-games. The aim of this partnership is to grow their global audience and in particular to reach a younger demographic.

Perhaps more than any other sport, basketball was willing to get creative with the Metaverse. The Brooklyn Nets created a platform where fans can view detailed 3D models and real-time images of players on the field during games. Fans can watch every angle of the game from any position, including center pitch. through their 360-degree virtual reality experience “Netaverse”. Over and beyond Meta recently partnered with the NBA and WNBA to launch more than 50 live virtual reality games on its Meta Quest platform. The The NBA has also launched an initiative where fans can insert a 3D avatar of themselves into a live game to replicate a player’s movements in real time.

The advent of these state-of-the-art fan engagement tools across the sporting arena has brought with it a number of commercial and legal issues for sporting organizations to address, with intellectual property high on the list of priorities.

Managing IP Risks in the Metaverse

Brand portfolio:

It is important for sports brands to ensure they have the correct trademark registries before starting a Metaverse project. This often involves reviewing a brand’s existing trademark portfolio to identify any gaps in the registrations (whether by trademark class or territory), and looking for third-party registered trademarks that are similar to those that a sports brand seeks to exploit. Ultimately, To ensure brand protection, a solid anti-infringement strategy is essentialThis requires an understanding of the infrastructure of the platforms relevant to the project at hand and how they interact with users.

Understanding the key populations and areas will be of paramount importance. Some Metaverse platforms could be described as “global”, but it is important to ensure that brands are willing and able to register their marks (in the appropriate classes) across the board. Important considerations will be:

• Knowing what are the main goals for the specific project;
• know which areas have the most users; And
• We need to know where the risk of injury is highest.

Design rights:

Although trademarks are a crucial element of trademark protection, the potential value of design rights should also be considered. Obtaining a registered design for a particularly important item that is being replicated in a metaverse context adds an extra layer of protection and has the advantage (in the UK) of not continuing to have to prove actual use of the design in order to maintain protection (as is the case with brands). As long as the owner of a registered design renews their registration every five years, protection lasts up to 25 years.

Brand cooperations:

Most Metaverse projects that sports brands have been involved in have involved collaborations with already existing and well-known platforms. There is a long-standing relationship between video games and sports, as evidenced by recent collaborations between them Air Jordan and the NFL in Fortnite And Ted Lasso in FIFA 23, concepts that gradually pass into the metaverse. In fact, the above example of the La Liga partnership with the Triverse by TVM may be a sign of where this type of collaboration is headed.

At the heart of every collaboration is the contract between the sports brand and the respective platform. The applicable intellectual property to be licensed is likely to be broad and may cover, among other things, the use of different logos, jerseys, player pictures, data and footage. Branding of In-Metaverse items will also likely come with requisite design and copyright ownership, as has been the case for some time in the context of video games (and as shown in the case of ). AM General LLC v Activision Blizzard, Inc.).

It is not easy to adequately articulate the licensing terms between the sports brand and the platform, but a number of important considerations include the following:

• Defining exactly what intellectual property will be licensed for the platform and in what context;
• specify exactly how this IP can be used, for how long and what should happen when the collaboration ends;
• Be cautious about giving guarantees and indemnifications related to the use of the sports brand intellectual property by the platform (which is related to the above points related to brand and design portfolio management);
• including robust permission rights to ensure the sports brand is happy with the virtual representation of their intellectual property within the platform; And
• Providing the sports brand with recourse in the event of misuse of its intellectual property.

building a metaverse:

The fashion industry quickly recognized the potential of the Metaverse and the importance of engaging with the gaming world in particular. Some have even gone so far as to launch their own games, such as Balenciaga’s posterity and Louis Vuitton’s Endless runner.

For sports brands looking to take the next step in developing their own games or Metaverse(s), more IP considerations are likely to come into play. Some of these will be familiar to those involved in software development projects such as: B. Ensuring that the brand undertakes a sufficiently comprehensive transfer of intellectual property rights of the game/metaverse made for it from those doing the development work (assuming it’s the sports brand). would like to own it) and clarify where in the development process open source technology was used and what the conditions are attached to it. Games and the virtual world are extremely rich in intellectual property and copyright exists in the graphics, audio and design created, as well as in the computer code used to create the game/Metaverse itself (which is protected as a literary work in the UK). Therefore, the importance of solving these problems cannot be underestimated.

Additional considerations come into play when a metaverse is intended to be truly global and when it comes to blockchain technology. By making a platform available to users everywhere, a sports brand should consider whether it might expose the platform to intellectual property enforcement risks in key territories (e.g., if the intellectual property treatment is a metaverse or the terms , to which it is licensed). Users would cause difficulties under local law in a market important for the sports brand. Additionally, if a Metaverse is built on a third-party blockchain (like Ethereum), a sports brand should consider whether this jeopardizes the brand’s ownership of anything it builds using that blockchain. You should also ask yourself whether the immutability of blockchain technology poses any risks – e.g. B. If NFTs minted through a sports brand’s platforms are misused by a buyer, to what extent can the brand limit the harm done, and if infringing activity occurs, will this be the case? You can locate the infringer if he has logged on to the platform anonymously.