October 18, 2022

Intellectual Property Enforcement in the Metaverse, Part 3

Bigger-Picture Considerations
Holland & Knight Masters of the Metaverse Blog
Andrew N. Choi | Cynthia A. Gierhart
Masters of the Metaverse Blog

In Part 1 of this three-part blog series, we examined how intellectual property (IP) online is normally enforced and how that model may translate to the metaverse. Part 2 focused on the implications for IP enforcement of certain metaverse properties linked to the blockchain. We now conclude with a bigger-picture analysis of the future of IP enforcement in the metaverse.

Regardless of whether a metaverse property is on the blockchain or adheres to traditional notions of land ownership, there is a number of other issues that could affect how intellectual property rights are enforced in the metaverse.


Entities such as YouTube have a fairly substantial ability to identify infringing content, as videos uploaded to YouTube are scanned against a database of audio and visual content prior to publication. It's unclear that a similar ability to automatically scan items for content exists (or could exist) in the metaverse, especially where metaverse equivalents of real-world items could have only a vague similarity due to graphical limitations of the platform. This could hinder the ability of companies and individuals to enforce their intellectual property rights. Conversely, metaverses such as the Sandbox have special clauses relating to in-metaverse objects, whereby an asset is removed if it exhibits "obvious visual similarities" to a pre-existing asset. Where comparison of in-metaverse objects might be much easier to accomplish, this could enhance the ability of companies to enforce their intellectual property rights.


Outside of the metaverse, given that infringing goods don't keep a record of their previous owners and creators, it can be easy for the creator of infringing goods to profit off the sale of that content without being identified. However, the creator of a non-fungible token (NFT) that infringes on intellectual property rights, as well as the future owners of the infringing content, can easily be found, given that such information is stored on the blockchain. This would seemingly create long-term negative incentives to infringe that don't exist outside of the metaverse. The blockchain also makes it easier for potential buyers to spot a counterfeit in the metaverse. After all,  it is fairly easy to determine whether a good is a counterfeit or not by looking at the blockchain.

Perverse Voting Incentives

While we earlier noted the possibility that entities with large amounts of voting power could enforce IP rights through a decentralized autonomous organization (DAO), it also seems possible that voting power could be used in perverse ways – say, to extend existing intellectual property rights beyond legitimate boundaries. At least at first glance, there is nothing that ensures that metaverse participants will vote "the right way" when it comes to the enforcement of IP rights, especially if they have an interest in the outcome.


The above scenarios all rely on the metaverses self-policing. But if a claim of infringement is not adequately resolved and the rights owner sues, there is likely to be a question as to whether U.S. courts have personal jurisdiction over a metaverse or metaverse landowner located outside the U.S. Similar to cases involving the internet, courts may look to whether the metaverse land aimed its content and activity toward the forum state to determine whether the court has jurisdiction. But cases challenging metaverse jurisdiction in U.S. courts are sure to come.


This is all to say that, based on an examination of Terms of Service, enforcement of intellectual property in the metaverse may look quite similar to enforcement outside the metaverse, though there are many factors that may require creators to adjust how they enforce intellectual property rights in the metaverse.

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