What is the metaverse and why is it important?

The metaverse is a place where our digital and physical lives come together. This may sound as if it belongs in a sci-fi movie, but technology is changing and developing at such a rate that fiction is becoming reality.

A number of new technologies will allow the metaverse to be franchised in future. These include:

• Augmented reality (AR): an enhanced version of the world achieved through visual, aural and other sensory stimuli
• Virtual reality (VR): computer-generated environments with scenes and objects which appear real
• Cryptocurrencies
• Blockchain – a system in which a record of transactions made in bitcoin or another cryptocurrency are maintained
• Non-fungible tokens (NFTs): non-interchangeable units of data

These may seem as though they are years away. However, McDonald’s recently revealed that it has filed a patent application in the US Patent and Trademark Office to cover new metaverse services including a virtual restaurant and goods, as well as operating virtual home delivery.

Large gaming companies are also moving towards the metaverse, with Minecraft, Animal Crossing and Fortnite all associated with virtual worlds. They are also working towards using or allowing the use of cryptocurrencies in their virtual lands. Other companies are purchasing large sections of digital space in the metaverse for offices and/or franchise locations.

Trade mark lawyers are likely to see a spike in trade mark applications from all types of brands, in every sector of industry, to protect digital versions of their products and services in the metaverse. This is likely to occur on a global scale and, as with most things, it will be important to act quickly especially in “first to file” locations.

As in the ‘real’ world, the metaverse is likely to be a catalyst for new cases of infringement and counterfeiting. Any counterfeit goods are likely to only be traceable via usernames, account names or locations, making recovery and litigation very difficult, as well as creating additional difficulties in relation to jurisdiction.

In addition, the process of selling virtual goods and getting paid in cryptocurrency is instantaneous, without postage, delivery or payment processing delays. This can cause additional issues for consumers and users as there is no option to hold or stop a payment – and no bank account to freeze.

There is no doubt that the metaverse is intriguing and full of possibility, and it is clear that franchising is coming in the future. However, there is no question that a significant amount of planning, investment and thought will need to be given to how it should happen, be maintained, protected and regulated.

If the metaverse interests you, ensure that you obtain early specialist advice in relation to the best way in which to ensure that your business is protected as far as possible before embarking on the journey.