A Brief Overview of the Metaverse and the Legal Challenges It Will Present

Morgan Lewis - Tech & Sourcing

Morgan Lewis - Tech & Sourcing

If you are just wrapping your head around the concepts of virtual reality and augmented reality, it may be time to get past the learning curve, as more technology companies are talking about creating the “metaverse.”

Although vaguely defined, the term “metaverse” is typically used to describe the concept of a future iteration of the internet, made up of shared, 3D virtual spaces linked into a perceived virtual universe. In simpler terms, the metaverse refers to a virtual world in which you can interact with other people and places using avatars. Technology companies are envisioning various types of metaverse platforms. One such platform would be based on blockchain and allow users to purchase land and build environments using non-fungible tokens and cryptocurrencies. Another type of platform may be a more general virtual world where people can work, play, or socialize. Both artificial intelligence (AI) and machine learning will play a key role in the development of a metaverse, as the point of the metaverse will be to merge our physical reality into the digital universe using avatars. Essentially, the metaverse will be an ultimate culmination of virtual reality and augmented reality.

The new era of the metaverse will have implications on all aspects of our society, including entertainment, advertising, and the economy. For example, imagine a metaverse in which you can use your avatar to go into a virtual mall, try on clothes offered by real clothing companies, and then purchase the outfits that look best on your avatar (and therefore on you) without even leaving your house. During the pandemic, musicians have been able to put on virtual concerts using virtual reality akin to what a metaverse would be like. New ways of virtual interactions will provide ample opportunity for marketing, sales, and events without the need for physical presence.

The metaverse will also have legal implications. One issue will be collaboration and interoperability among different metaverse creators. If the purpose of the metaverse is to allow people to interact in a digital world, each metaverse should be accessible from all devices and headsets. This may involve technology companies having to agree to certain standards for a metaverse so that they can interoperate among different creators, or each company will have to comply with the technology constraints built by its predecessors and license the rights to use another company’s underlying technology in order to build its own metaverse.

Another issue will be intellectual property ownership. In a prior blog post, we discussed the recent artificial intelligence case, in which the US District Court for the Eastern District of Virginia held that an AI system cannot be named as an inventor on a patent. Unlike US patent law, US copyright law does not have an express requirement of human authorship; however, US courts and the US Copyright Office generally operate on the basis of this requirement and deny registrations of works not created by humans. In fact, the Compendium of US Copyright Office Practices—a manual produced by the US Copyright Office, intended for use primarily by the Copyright Office staff as a general guide to policies and procedures such as registration, deposit and recordation—states, “the term ‘authorship’ implies that, for a work to be copyrightable, it must owe its origin to a human being”. Materials produced solely by nature, by plants, or by animals are not copyrightable. The metaverse could have virtual creations by avatars and AI aspects built into them. If such creations are deemed to be AI creations and not human creations, they may not be allowed certain types of intellectual property protection.

The metaverse could also pose issues for content owners, as it will be difficult to police copyright infringement in the metaverse. Content licensees will also need to carefully review their license agreements to ensure that they have the right to use the licensed content in the metaverse, as many license agreements may not have considered the use of licensed content in such forums.

The foregoing issues are just a handful of legal issues that will be posed by the creation of a metaverse, and other key issues such as data protection and privacy will come to the forefront immediately as metaverses are developed and more people begin to interact within them.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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