IP Protection in the Chinese Metaverse

The topic of IP in the metaverse (metaverse) is gaining importance in China. The drivers are the Chinese technology groups, above all BaiduTencentAlibabaByteDance and NetEase, which are currently racing against each other with massive metaverse trademark applications. Tencent alone has filed around 100 applications. Baidu, for example, has applied for the term Metaapp as a trademark, Alibaba for the trademark Ali Metaverse, and NetEase for the NetEase MetaverseNetEase Group’s trademark applications include names that combine the word Metaverse with the names of the company and its artificial intelligence research and gaming units, such as Fuxi Metaverse and Leihuo Metaverse.

So far, more than 400 companies have registered trademarks in China for terms related to the metaverse, with many applications covering categories such as design research, communication services, and education and entertainment. Trademarks are also high on the agenda of China’s new metaverse industry group, the Metaverse Industry Committee. It is recognized that the metaverse will permanently change business in many industries and that brand competition will take place not least in the digital space – not only for profits, but also for cost reasons and additional reach. Add to that the traction that Metaverse pioneers among competitors.

Business application fields include virtual training and simulation, operating industrial equipment, digital twins, demo and sales interactions in virtual stores or showrooms, hybrid or purely virtual events such as trade shows, exhibitions or conferences, exchanges with customers in virtual conference rooms or the purchase of real or digital goods in virtual shopping environments. 

So far, Chinese applicants have concentrated on umbrella brands. Because Virtual Reality (VR) and Augmented Reality (AR) dominate in the metaverse, figurative marks in the form of symbols or designs will very quickly come into play in virtual creations. Color marks, sound marks and 3D marks will also gain in importance. In addition, there will be copyrights, trade dress and design patents as protection for digital artifacts. However, in borderless metaverses, IPR infringement raises issues of jurisdiction and place of enforcement, and cyber security and data protection issues are also gaining importance. Technical devices such as 3D glasses, haptic sensors or technologies for creating images and videos continue to be protected by patents on a large scale.

It is a foregone conclusion that the Chinese government will seal off the metaverse from the rest of the world just like the real economy and control it by the state. The country will proactively stake out strategic positions in the metaverse industry, occupying space and establishing its own standards to leverage first-mover advantages as it transitions into the new digital ecosystem. The blockchain, digital Yuan and non-fungible tokens (NFT) will act as catalysts, as will the rollout of 5G and the Digital Silk Road infrastructure. IP plays a prominent role in all of this.

Foreign companies that do not pay attention to this emerging economic space risk losing out in China. They should register trademarks in classes relevant to downloadable virtual goods, create new virtual assets, and allocate more resources to monitor and combat IP infringement in the digital space.

Picture: Reworld

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