The Reed Smith Guide to the Metaverse - 2nd Edition

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We already understand that the known universe of the Internet has caused a great number of models that take advantage of intellectual property rights to converge – challenging owners and users of protected content in the areas of authorization, monetization, and enforcement. The metaverse and web3, conversely, will likely continue to challenge the relevance of some of our core IP mechanisms, put others – like interoperability - under the spotlight and redefine the proprietary nature of technology, virtual worlds, virtual assets and our ‘things’ in the metaverse.

Software interoperability

The purpose of interoperability is to enable different systems to “talk” and “understand” the information they pass to one another. Although it is valuable in any field, interoperability is especially relevant for the metaverse, where no single software will be used to build it.

In legal terms, interoperability is a concept that limits the rights of computer program rights holders, which are protected by copyright. In effect, their authorization is not required where copyright-relevant acts pertaining to the code are “indispensable” to obtaining the information necessary to achieve the interoperability of an independently created computer program with other programs, provided that certain conditions are met (legitimate access to the software, necessary acts only, etc.).

Today, the concept is increasingly coming to the fore, with the creation of the Metaverse Standards Forum by several big tech names (Meta, Adobe, Microsoft, Epic Games, Ikea, Sony, Nvidia, etc.) to "foster the development of open standards for the metaverse." "The Forum will explore where the lack of interoperability is holding back metaverse deployment and how the work of Standards Developing Organizations (SDOs) defining and evolving needed standards may be coordinated and accelerated," the group said in its announcement.

At its core, a metaverse is code: ones and zeros, overlaid with unfathomably vast amounts of data. In such a world, everything comes from code. From the clothes our avatars wear to the car that we drive in, our “things” can only exist in the metaverse after being coded.

Khronos, one of the groups promoting standards behind the MSF hopes that MSF's standards will make much of that data as easily interoperable as JPEG is today. This is particularly relevant in relation to 3D objects for which no Standard currently applies.

The creation of the MSF – just a year after we first published this guide – highlights the importance of interoperable, nonproprietary data exchange formats and can result in a fundamental shift with how we interact with the internet.

In a moment where the mere idea of proprietary technology is being challenged by the advent of web3, all eyes are turning to the architects of the metaverse as the decisions they will make in the forthcoming months will likely impact IP rights for years to come.


Copyrights and their use in the metaverse

Beyond software, copyright protection extends to “original works of authorship fixed in any tangible medium of expression.” As is evidenced by the colorful and content-full metaverses developed by Decentraland, The Sandbox or Second Life, there is seemingly no rock in the metaverse under which no copyright exists.

Collaboration and decentralization

There are many different aspects of the metaverse that will be impacted by copyright laws and this guide already touches on a number of them (see section on Artificial intelligence and on Games). One aspect however deserves special attention as it is probably one of most significant challenges that we see emerging from the adoption of web3. It lies in shifting from a world of centralized and controlled servers to a decentralized internet, where content is hosted using peer-to-peer technology, like IPFS links and traded by online intermediaries, hosting other people’s content. Rare are the rightsholders in music and film having worked through the nineties who won’t shiver at the thought of all the effort, money and time invested in shutting down peer-to-peer platforms like Grokster, Kasaa, Limewire or The Pirate Bay. Assuming that blockchain, a technology that does not (yet) allow the storage of content, will cure the internet and vaccinate it against new copyright challenges would be naïve and short-sighted. The capacity of copyright to adapt and survive technological revolutions has been demonstrated time and time again, yet for all its transformations it has always been used to enforce a rightholder’s monopoly. How copyright will fare in a world governed by DAOs and decentralized storage is anyone’s guess but certainly something that we will be watching closely.

Key takeaways
  • The metaverse and web3 challenge traditional thinking about the scope and use of copyrights, trademarks and patents.
  • Increasing user-generated content has given rise to new issues around the use of third-party trademarks, patents , and copyrights.
  • The creation of the Metaverse Standards Forum highlights the importance of interoperable, non-proprietary data exchange formats.
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