The virtual world is not without its questionable business tactics, just like the real world. The same regulations apply online, but sometimes enforcing them is a challenge.
A three-dimensional online environment called the metaverse provides businesses and customers with fresh and creative marketing and consumption opportunities.
Sporting goods companies Adidas and Nike presented their own NFT collections. The first Metaverse Fashion Week took place in the 3D world “Decentraland”, featuring more than 70 brands, artists and designers, including Dolce & Gabbana and Forever 21.
H&M also presents a selection of collections in a virtual showroom. Customers can experience the Metaverse that is hardly imaginable in the real world. The metaverse, however, is not immune to questionable trading tactics from market participants, just like the real world.
Defend Against Trademark Infringement
In the Metaverse, offering counterfeit products and product theft are serious risks. A user discovers a deceptively real Rolex while shopping in the metaverse and can purchase it at very low cost.
Trading in counterfeit branded goods carries the risk of legal, criminal and administrative repercussions offline and on the conventional Internet. The Metaverse follows the same guidelines.
Because products are always made online, virtual businesses must be legally run like traditional sales platforms. The virtual world in which users communicate through avatars is the only distinction.
Consequently, the trademark owner can seek injunctive relief, removal, an appropriate fee, and damages against trademark infringements. The law allows for fines and even prison terms if a trademark is used commercially in an infringing manner.
Similar laws apply to copyright violations in the metaverse, such as when a copyrighted painting is “tokenized” and sold as an NFT without the creator’s permission.
With the help of the best crypto robot that helps to earn cryptocurrency, users can easily buy NFTs, which are virtual proofs of ownership that are not exchangeable for digital assets.
Litigation in the USA
Cases involving trademark infringement have recently generated controversy in US courts. Nike filed a lawsuit against StockX, a Metaverse marketplace that provided illegal photos of athletic shoes as NFTs.
Mason Rothschild, an artist who created Birkin bag fashion NFTs and sold his digital artwork on the Metaverse for a significant profit via OpenSea, an NFT marketplace, has been sued by high-end fashion firm Hermès.
A presence in the Metaverse offers a unique opportunity for companies to see themselves in this rapidly expanding digital community, even in its unreliable early stages. It provides access to a wide range of business options.
Companies need to ensure that one of their most precious assets, their brand, is secure in the Metaverse if they want to generate value comparable to what is found in the real world.
New or expanded trademark registries, as well as better enforcement and monitoring tools, are possible strategies. Also, the Metaverse has its own rules that sometimes apply to existence there.
Certain providers’ terms of service may restrict liability or assign jurisdiction to nations with less intellectual property protection, making asserting claims considerably more challenging.
Defending the Consumer
Customers are governed by the same strict consumer protection laws in the virtual world as in the past when it came to contracts for the sale of goods and services over the Internet.
The consumer has a full right to information about the goods when entering into such contracts (for example, when buying at an online retailer), as well as a right of withdrawal or termination within 14 days, which he can exercise without providing justification. .
By offering digital information and services like Coinobots, the business owner can limit the right of withdrawal, but only with the knowledge and permission of the client. As of January 2022, consumers who enter into digital service contracts are also subject to additional warranty requirements.
In the EU, the law of the consumer’s country of residence is required to apply, and consumers can bring legal action against providers in the metaverse in the courts of their home country.
It is not yet clear how effective legal action will be against illegal providers, particularly if they are based outside of the EU.
But again, a comparison with conventional online commerce can be made here: although there was initially a lot of skepticism about whether products purchased from an online store would actually be delivered with the promised quality, it is now impossible to imagine online retail as a viable alternative to stationary retail without it, especially in times of pandemic-related traffic restrictions.
Subscribe to our latest newsletter
To read our exclusive content, sign up now. $5/month, $50/year