WIPO Conversation
IP and FrontierTechnologies

Metaverse

Metaverse“A world where surgeons and engineers, even in the remotest areas,
are able to access the most advanced training. Where digital twin
technologies optimize low-emission industrial designs and repairs. Where
healthcare is just one virtual appointment. Where education is one clickaway.” WIPO Director General Daren Tang

What is the Metaverse?
The term “Metaverse” was first introduced in Neal Stephenson’s
cyberpunk novel, “Snow Crash” and the Metaverse has not quite made it
from science fiction into reality yet.
The Metaverse is still evolving, and its realization is a subject ofongoing development. It has the potential to revolutionize how weinteract with technology and experience digital content.
The Metaverse is still in its early stages of development. Some believethat it represents a significant and transformative revolution in how
we engage with technology and experience life. Others view it as an
unremarkable extension of existing video game platforms or a conceptthat may never come to fruition.
Although there is currently no agreed definition of the Metaverse,
most agree on some of its essential characteristics: an immersive 3D
virtual space, interoperability, and real-time operation. Experiencing
the Metaverse is predicted to allow a seamless switch between virtual,augmented, and physical worlds that will change how we work, play andlive.
Whether one single Metaverse will emerge or a multitude of parallel
Metaverses is part of a lively debate.

Another area for discussion is whether the Metaverse should lean towards
centralization or decentralization. The key differentiation is the degreeof control and ownership of content and virtual assets between theplatform/Metaverse provider and the individual users. A decentralized
Metaverse is community-oriented, has a decentralized approach to
governance, uses cryptocurrency, non-fungible tokens (NFTs), smart
contracts, and blockchain technology, and is operated and run bydecentralized autonomous organizations (DAOs). Some examples ofdecentralized Metaverses are Decentraland, Sandbox, and Africarare, thefirst African Metaverse marketplace launched in 2021.

Decentralized autonomous organizations (DAOs)
DAOs are blockchain-based community-built structures with nocentralized leadership. Some 12,000 DAOs were registered in 2021.
However, they remain vulnerable structures that are not recognized aslegal entities and cannot enter into contracts with traditional entities,
open bank accounts, or hold IP.

Components of the Metaverse
Many of the foundational technologies for the Metaverse are being
developed, such as VR, AR, XR, and artificial intelligence (AI). However,for the Metaverse to reach its full potential and attract a wide range ofcontent, there remains a need for ongoing technological advancements
to enable true 3D experiences in VR, sensory interaction and haptic
feedback, and user-friendly interfaces. These include high-speed
networks, powerful servers, and cloud computing capabilities to handle
the computational demands of the virtual environment.

RelatedTechnologies

blockchain

NFTs

FoundationalTechnologies
EnablersAI
digital twins
standards

ARVR

interoperability

Infrastructure

scaleable
infrastructuredataWhat are VR, AR, and XR?
VR, AR, and XR are technologies that enhance our perception of reality
through computer-generated information and are some of the important
technologies to help users interact with the Metaverse.
Augmented reality (AR) overlays computer-generated information onto
our view of the real world, enhancing our perception of the environment.
Virtual reality (VR) creates a fully immersive experience by replacing auser’s view with a computer-generated virtual environment.
Extended Reality (XR) is a term that encompasses AR and VR. XR
technologies blend the physical and digital worlds, overlaying computer
text and graphics onto real-world or virtual environments.

Potential economic impact
The Metaverse market is worth more than USD 680 billion globally. It isestimated to become a USD 5 trillion market as soon as 2030.
The Metaverse has the potential to boost the videogame industry, alreadyworth a hundred billion dollars, to global revenues of USD 360 billion by2027. Some suggest that over 25 % of people will spend at least an hour a
day in the Metaverse in just three years.
There are currently already 390,000 patent applications pending
worldwide on core technologies such as VR, AR, and XR-related
technologies, showing a remarkable investment trend. Metaverse
terminals and wearable devices represent a promising electronic device
market, with the top 20 applicants filing nearly 8,000 patent applications.
As well as representing a significant potential for economic growth,
the metaverse has the potential to change the world.

Challenges
The Metaverse has the potential to bring many benefits to society, inareas such as health, education and cultural preservation, but also raises
many challenges and concerns.
Legal and ethical challenges include how to ensure inclusivity, security,privacy, safety, data protection, respect for intellectual property rights,
and enforcement of IP rights, particularly for virtual goods, avatars, anddigital items. Technical challenges include how to allow for interoperability
and how to provide standards that are at the heart of the continuity ofdata and create an immersive, realistic, and fun virtual world.
Many voices are concerned about the potential concentration of power inplatform ownership and operation. These voices highlight the possibility
that certain entities or companies could gain significant control anddominance over aspects of the Metaverse, including data. This could
lead to stifling competition and innovation and impact the diversity andinclusivity of the Metaverse.
Policymakers should be aware of and keep a close eye on thechallenges. While the Metaverse is still in its infancy, there is awindow of opportunity to establish clear, fair, and transparent rules
to shape an inclusive, safe Metaverse that benefits all.

Key IP Considerations
Overview
The Metaverse raises IP questions across the full breadth of IP rights, IPregistration, and IP enforcement.
Copyright

In the Metaverse, copyright laws will still apply. However,the virtual nature of assets and content that are notconfined to a jurisdiction introduces a significant level oflegal uncertainty. Similarly, there are questions about how
existing exceptions and limitations to copyright wouldapply. In the absence of clear rules, private contractual
terms between platforms, content providers, and users
may play a crucial role. Additionally, licensing content,
and collecting royalties will introduce another layer ofcomplexity when dealing with a multiverse of Metaverses.

Trademarks The Metaverse poses questions for both the registrationand enforcement of trademarks.
Trademarks are registered for goods and services and,typically, trademark registrations indicate the class orclasses into which goods and services fall. A number ofchanges and new entries for NFTs and the Metaverse willenter into force on January 1, 2024, for the next version of
the Nice Classification (NCL 12-2024).
Far from being theoretical, virtual marketplaces offering forexample sneaker and designer handbag NFTs are becoming
real business models. This is raising complex issues forbrand protection and several trademark infringement
litigation matters are ongoing globally. IP questions
to consider include discussions about jurisdiction andapplicable laws, non-commercial and fair use defenses, andthe likelihood of confusion.

Designrights

Virtual designs such as graphical user interfaces (GUIs), icon
designs, typeface designs, and three-dimensional designs
will be key in shaping the Metaverse and are specificallycreated for virtual environments.
This raises questions about whether such virtual designs
can be protected by design rights.
In some countries, protection for virtual designs is available,
although it may be necessary to file design applications forthe physical products that embody these designs.
In those countries, virtual designs themselves cannot befiled without a connection to physical embodiments. Other
countries have separated virtual designs from physicalproducts.
Designers often file for protection for both virtual andphysical designs to manage the legal uncertainties
they face.

Patents

The back end of the Metaverse, which includes networked
computer systems like distributed ledgers and blockchain,presents challenges for obtaining patents. Patenting in thisarea can be difficult, as it typically requires a demonstrable
technical effect and software as such is usually excluded
from protection. Moreover, while AI plays a central rolein the Metaverse, inventions relating to AI methods oralgorithms may not meet the criteria for patent eligibility
and raise questions relating to their sufficient disclosure.

TraditionalKnowledge

Virtual tourism and the replication and appropriation oflandscapes, traditional crafts, characters, designs andlanguages that reflect cultural identity or significanceare among the situations that raise concerns about theprotection of the traditional knowledge (TK) and traditional
cultural expressions (TCEs) of Indigenous Peoples. It isessential to ensure that Indigenous Peoples have both theopportunity to express and share their TK and TCEs in theMetaverse themselves and to control whether and how
their TK and TCEs are used by others.

When considering the options available for their IP ecosystems
policymakers may want to consider the whole breadth of IP issues
relevant to the Metaverse. While the Metaverse is still evolving,
innovators and creators already face many uncertainties in the IP
field and may require proactive guidance from IP Offices, such as
trademark or patent examination guidelines.

IP protection of digital twins
A digital twin is a virtual copy or simulation of a physical object, system,or process. It is created by integrating sensor data into computer
simulations. Digital twins monitor, analyze, and enhance the performanceof the corresponding real-world object or system and are also increasingly
being used in engineering design.
Digital twins showcase that Metaverse technologies can be protected by amesh of IP rights:
Copyright

Sui generis
database rights

Patents

Trade secrets

software(expression ofa computerprogram)

input data

hardwarehardwareoutput data

simulationand models,depending ontechnical effectsimulationand models

application

application

Enforcing IP rights in Metaverse
As a fully virtual world with virtual assets and transactions, the Metaverse
raises complex questions regarding applicable laws and the infringement/enforcement of IP rights, which by their nature are territorial rights.
The large amount of user-generated content, and the promise of
the Metaverse to benefit creators and content makers more directly,
complicate enforcement leading to potentially many more but lower-value
disputes.
To avoid some of these uncertainties, online platforms are starting tocreate frameworks for dispute resolution in their terms and conditions.
These often include license provisions for user-uploaded content
to address copyright infringement concerns and dispute resolution
mechanisms including procedures for notice and takedown. Smartcontracts can also play a role in facilitating the enforcement of IP and fairroyalty payments, providing additional security for IP owners.
The legal uncertainties concerning jurisdiction, applicable laws, andenforcement of IP rights are leading to online platforms creating
contractual enforcement frameworks.

Case studies
The video games industry is well-suited to leverage the potential of
the Metaverse due to its extensive experience in handling virtualworld challenges, fostering engagement, and building communities.
Game developers possess valuable expertise in creating meaningfulsocial interactions and providing enhanced life services within virtualenvironments but gaming platforms are generally not set up to beinteroperable.
Many other industries are stepping into the Metaverse and new businessmodels that are calling for more interoperability are emerging.
Examples of new forays into the Metaverse include digital financial
solutions, education applications, virtual influencers, virtual designs,
event platforms, and tourism. The breadth of new business models is also
reflected in the diversity of IP challenges and questions.

Application

IP Challenges/Questions

A one-stop
decentralized
platform to allow
people to build theirown community,socialize and havetheir own businesses

How can IP rights and obligations be defined indecentralized systems like web3?
How can IP rights and obligations be defined in
the case of collaborative creation between users
who have never met?
What are the copyright considerations forthe content uploaded and shared by users on
the platform?
What are the differences between licensing
content in the Metaverse compared to the realworld?

A platform
to organize
Metaverse eventsin a secure and fully
customizable way

What measures can be taken to ensure that nothird-party IP rights are being infringed?
How can the platform facilitate the creation andsale of digital assets or NFTs within events while
addressing ownership and licensing concerns?
Do IP rights attach to NFTs and do they transfer
with the NFT in case of a sale?
How can the platform ensure that it has the rightto use musical works for Metaverse concerts?

A virtual influencer
and an interactive
CGI character

What measures can be taken to safeguard the IPrights of virtual influencers in the Metaverse?
What is the process for registering trademarksfor virtual goods?

The digitization ofheritage and cultural
practices for display
in the virtual world

Can IP protect history and cultural heritage, andcan licenses to any such IP rights be granted?
How can IP protect heritage to ensure theunderlying people and populations benefit fromtheir heritage in the virtual world?

A Metaverse videogame

Are existing IP rights sufficient to protectinnovations and creations in the virtual world?
What steps can be taken to handle copyrightand ownership of user-generated content withingames in the Metaverse?

Further reading

The discussion in the seventh session of the WIPO Conversation focusedon the IP and the Metaverse to help policymakers understand potential
policy choices. More information about the seventh session of the WIPO
Conversation, including the program, presentations, and webcast, can befound on the meeting page.
More information about IP and frontier technologies is available on theWIPO website: www.wipo.int/ai.

Next steps
To keep informed about the next session of the WIPO Conversation, signup for the IP and Frontier Technologies Division’s newsletter by sending
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© WIPO, 2024 /Attribution 4.0 International (CC BY 4.0) / The CC license does not apply to non-WIPO content in this publication. / Cover: Getty Images /luza studios, Damir Khabirov, salihkilic, gorodenkoff, AnuStudio, BlackJack3D; Unsplash / Richard Horvath, mediamodifier / WIPO Reference RN2023-31EN
DOI: 10.34667/tind.49114

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