Tomorrow is the start of Metaverse Fashion Week (MVFW), at which Dolce & Gabbana, Paco Rabanne, Elie Saab, Tommy Hilfiger and Cavalli will showcase their collections virtually. MVFW’22 is an immersive shopping experience where buying virtual clothing in the 3D virtual-world platform “Decentraland” also sees a physical twin shipped for your real wardrobe. Here are some considerations for fashion brands before their Metaverse debut:
1. Consider the territorial scope of your current trade mark protection
The Metaverse can be joined by anyone in the world that has access to the internet. A trade mark registration is a property right and its scope is determined by the country/territory in which it is registered. Selling physical products via the Metaverse to a customer in a territory where a brand has no existing trade mark protection, or where no due diligence has taken place (i.e. a clearance ‘search’ to determine whether third parties have any earlier rights), could leave brands exposed to infringement proceedings. Well-known fashion brands selling physical and virtual products via Decentraland this week may be able to rely on their reputation in a trade mark infringement dispute. However, smaller fashion brands may struggle to do the same. It may be necessary for fashion brands to put controls in place to halt the sale of physical and/or virtual items via the Metaverse where the location from which the product is being purchased is a new market and is a territory in which no assessment has yet been undertaken of the risks involved in use of the brand.
2. Consider whether your brand needs to expand its existing trade mark protection to other goods and/or services
Pending or registered trade marks cover categories (or “classes”) of goods and services. Whilst the sale of physical fashion items via the Metaverse may be protected by “clothing; headgear; footwear” in class 25, if a fashion brand is intending to sell virtual goods via the Metaverse, there is a question mark over whether the virtual version would be covered by class 25 or whether it may fall under a different class of goods. Fashion brands may therefore wish to consider extending their current trade mark protection to cover virtual goods and services – by way of example, on 8 March 2022 Red Bull GmbH applied for a US trade mark application for the sign ‘RED BULL’ and its ‘fighting bull logo’ to cover ‘downloadable virtual goods , namely computer programmes featuring clothing, footwear, headwear’ in class 9 plus ‘retail store services featuring virtual goods, namely, clothing, footwear, headwear’ in class 35.
3. Conduct a clearance search before use in the Metaverse
Since it is uncertain whether providing virtual fashion items via the Metaverse constitutes diversifying the product range of an existing brand, it is important to carry out “top-up” searches to ensure that there are no legal issues in using the brand in relation to the virtual goods. Given that trade marks are territorial, it may be necessary for fashion brands to seek local advice on whether to search in each territory in which the virtual fashion items will be sold. If there are plans to sell physical fashion goods to new markets via the Metaverse, searching in class 25 (“clothing; headgear; footwear” ) may also be necessary (subject to local advice). In addition, it may be necessary to file a new application to ensure you have registered trade mark protection for the new product range.
4. Consider whether your brand has any coexistence agreements in place which may impact their entry into the Metaverse
An agreement between two or more companies agreeing to limit their use of the same or a similar trade mark in certain territories in order to coexist may prevent the respective parties selling to certain consumers in the Metaverse. The uncertainty surrounding whether virtual goods would be classified in class 9, class 25 or any other class, may also impact agreements where the parties have agreed to limit their use of the same or a similar trade mark to specific classes/goods/services. Fashion brands should therefore consider seeking local advice to determine whether the planned use may constitute breach of contract.
Marks & Clerk act on behalf of a wide range of clients operating in the fashion industry and are well placed to advise further on any of the above issues.