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Branding the Metaverse: First U.S. Lawsuits May Define Scope of IRL Trademarks

The luxury and fashion industries have already embraced non-fungible tokens (NFTs)—unique digital assets (often a photo or video file), whose authenticity and ownership are immutably recorded on a blockchain—as forward-looking marketing, consumer engagement and brand-building tools. Global NFT sales have already reached the cryptocurrency equivalent of billions of dollars. Because NFTs can serve to authenticate identity as well as ownership of digital possessions and “unreal” property in virtual realms, the prevalence of NFTs is likely to grow as engagement with and in the metaverse expands.

Confusion and conflict have arisen over what rights NFT creators and metaverse builders have to incorporate the trademarks, artwork, writings and other intellectual property owned by others in the physical world, and what bundle of rights purchasers of NFTs and other digital assets actually acquire.

Lawsuits recently filed in U.S. federal courts by luxury and fashion brands challenge whether the creation, marketing and sale of NFTs incorporating third-party trademarks and trade dress without authorization violate U.S. intellectual property laws. In this article written by Melanie Howard, chair of Loeb’s Intellectual Property Protection and Luxury Brands practices and deputy chair of the Advanced Media and Technology department, and published by the Luxury Law Alliance, Melanie explains how and why these initial cases have the potential to establish precedent for whether and how these laws will govern the use and enforcement of branding assets in the metaverse.

Click here to read the full article on the Luxury Law Alliance’s website.