Navigating the Metaverse Business and Legal Challenges: Intellectual Property, Privacy, and Jurisdiction

Abstract

The metaverse, a virtual space where users can interact, create, and transact with digital assets, represents a new frontier in human interaction and commerce. However, the legal landscape of the metaverse is complex and still developing, and it presents several challenges and considerations for intellectual property, privacy, and jurisdiction. This paper aims to provide an overview of the legal challenges associated with the metaverse and to identify potential solutions for addressing them. Applying legislation for intellectual property in the metaverse is a complex issue, as virtual worlds and online communities can involve collecting and sharing large amounts of personal data. A combination of technical, organizational, and legal measures may be necessary to protect intellectual property. Finally, it is still being determined who has jurisdiction in the metaverse, as virtual worlds and online communities can cross international boundaries and involve multiple legal systems. Jurisdiction in the metaverse can refer to the authority of a government or legal system to regulate and enforce laws in virtual environments. The paper concludes by highlighting the need for interdisciplinary approaches to understanding and addressing the legal challenges of the metaverse and the importance of creating specific laws, regulations, and policies that will balance the competing interests of different stakeholders.

Keywords

• Metaverse
• Intellectual Property
• Privacy
• Jurisdiction
• Business

References

1. N. Stephenson, “Snow crash,” Futures, vol. 26, no. 7, pp. 798–800, 1992, doi: 10.1016/0016-3287(94)90052-3.
2. L. Lessig, Code: And Other Laws of Cyberspace. 1999.
3. J. Goldsmith, “Who Controls the Internet? Illusions of a Borderless World,” Strateg. Dir., vol. 23, no. 11, pp. 44–50, Jan. 2007, doi: 10.1108/sd.2007.05623kae.001.
4. H. Snee, C. Hine, Y. Morey, S. Roberts, and H. Watson, “Digital Methods as Mainstream Methodology: An Introduction,” in Digital Methods for Social Science, Palgrave Macmillan UK, 2016, pp. 1–11.
5. A. Yemenici, “Entrepreneurship in The World of Metaverse: Virtual or Real?,” J. Metaverse, vol. 2, no. 2, pp. 71–82, 2022.
6. V. Lehdonvirta, “Real-Money Trade of Virtual Assets: Ten Different User Perceptions,” SSRN Electron. J., Dec. 2011, doi: 10.2139/ssrn.1351772.
7. D. P. Sheldon, “Claiming ownership, but getting owned: Contractual limitations on asserting property interests in virtual goods,” UCLA Law Review, vol. 54, no. 3. pp. 751–787, 2007, Accessed: Jan. 17, 2023. [Online]. Available: https://heinonline.org/HOL/Page?handle=hein.journals/uclalr54&id=762&div=&collection=.
8. K. Cornelius, “Responsibility under Criminal Law in Virtual Worlds,” in Virtual Worlds and Criminality, Springer, Berlin, Heidelberg, 2011, pp. 95–119.

9. R. Belk, M. Humayun, and M. Brouard, “Money, possessions, and ownership in the Metaverse: NFTs, cryptocurrencies, Web3 and Wild Markets,” J. Bus. Res., vol. 153, pp. 198–205, Dec. 2022, doi: 10.1016/J.JBUSRES.2022.08.031.
10. S. Kasiyanto and M. R. Kilinc, “Legal Conundrums of the Metaverse,” J. Cent. Bank. Law Institutions, vol. 1, no. 2, pp. 299–322, May 2022, doi: 10.21098/jcli.v1i2.25.
11. GDPR, “What is GDPR, the EU’s new data protection law? - GDPR.eu,” What is GDPR, the EU’s new data protection law? - GDPR.eu, 2021. https://gdpr.eu/what-is-gdpr/ (accessed Jan. 17, 2023).
12. G. Stobbs, “The Digital Millennium Copyright Act,” in Multimedia Security Technologies for Digital Rights Management, 2006, pp. 457–482.
13. “e-Commerce Directive | Shaping Europe’s digital future.” https://digital-strategy.ec.europa.eu/en/policies/e-commerce-directive (accessed Jan. 17, 2023).
14. “Homepage | CNIL.” https://www.cnil.fr/en/home (accessed Jan. 17, 2023).
15. “Cyberspace Administration of China Launches the Initiative on China-Africa Jointly Building a Community with a Shared Future in Cyberspace,” 2021. http://www.cac.gov.cn/2021-08/25/c_1631480920680924.htm (accessed Jan. 17, 2023).
16. D. S. Siegel and M. Wright, “Intellectual property: The assessment,” Oxford Rev. Econ. Policy, vol. 23, no. 4, pp. 529–540, Dec. 2007, doi: 10.1093/oxrep/grm033.
17. “Intellectual Property in the Metaverse. Episode III: Patents.” https://intellectual-property-helpdesk.ec.europa.eu/news-events/news/intellectual-property-metaverse-episode-iii-patents-2022-05-30_en (accessed Jan. 17, 2023).
18. “Flavored ready-to-eat breakfast cereal,” Jun. 1969, Accessed: Jul. 13, 2018. [Online]. Available: https://patents.google.com/patent/US3686001A/en.
19. A. Greenberg, “Protecting Virtual Things: Patentability of Artificial Intelligence Technology for the Internet of Things,” IDEA Law Rev. Franklin Pierce Cent. Intellect. Prop., vol. 60, 2020, Accessed: Jan. 17, 2023. [Online]. Available: https://heinonline.org/HOL/Page?handle=hein.journals/idea60&id=340&div=&collection=.
20. B. S. Noveck, “Trademark Law and the Social Construction of Trust: Creating the Legal Framework for On-Line Identity,” p. 1733, 2005, Accessed: Jan. 17, 2023. [Online]. Available: http://www.shadowbane.com/.
21. “What Facebook’s Patents Reveal About the Metaverse | Founders Legal | Bekiares Eliezer LLP.” https://founderslegal.com/what-facebooks-patents-reveal-about-the-metaverse/#1637611077732-966f5af5-9bb9 (accessed Jan. 17, 2023).
22. “Facebook Buys 100 Patents To Spur Virtual Reality, Video, Speech.” https://www.forbes.com/sites/georgeanders/2014/09/02/facebook-buys-100-patents-tied-to-video-printing-and-speech/?sh=311e9a8f6b94 (accessed Jan. 17, 2023).
23. “Facebook’s New Patents Reveal Vision for Hyperrealistic Metaverse.” https://www.businessinsider.com/facebook-meta-patents-show-vision-for-hyperrealistic-metaverse-2022-1 (accessed Jan. 17, 2023).
24. “Linden Lab Trademark List.” https://secondlife.com/corporate/linden-lab-trademarks-list (accessed Jan. 17, 2023).
25. “Guidelines for Using Linden Lab’s Trademarks.” https://secondlife.com/corporate/trademark (accessed Jan. 17, 2023).
26. “Licensed content | Minecraft.” https://www.minecraft.net/en-us/licensed-content (accessed Jan. 17, 2023).
27. “Roblox Name and Logo - Community Usage Guidelines – Roblox Support.” https://en.help.roblox.com/hc/en-us/articles/115001708126-Roblox-Name-and-Logo-Community-Usage-Guidelines (accessed Jan. 17, 2023).
28. Blizzard, “Blizzard End User License Agreement - Legal – Blizzard Entertainment,” 2020. https://www.blizzard.com/en-us/legal/fba4d00f-c7e4-4883-b8b9-1b4500a402ea/blizzard-end-user-license-agreement (accessed Jan. 17, 2023).
29. United States Copyright Office, “Copyright Law of the United States | U.S. Copyright Office,” copyright.gov, 2020. https://www.copyright.gov/title17/ (accessed Jan. 17, 2023).
30. State of California Department of Justice, “California Consumer Privacy Act (CCPA) | State of California - Department of Justice - Office of the Attorney General,” State of California Department of Justice, 2018. https://oag.ca.gov/privacy/ccpa (accessed Jan. 17, 2023).
31. “Health Insurance Portability and Accountability Act of 1996 | CMS.” https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/Privacy/Health _Insurance_Portability_and_Accountability_Act_of_1996 (accessed Jan. 17, 2023).
32. “The Personal Information Protection and Electronic Documents Act (PIPEDA) - Office of the Privacy Commissioner of Canada,” Office of the Privacy Commissioner of Canada., 2019. https://www.priv.gc.ca/en/privacy-topics/privacy-laws-in-canada/the-personal-information-protection-and-electronic-documents-act-pipeda/ (accessed Jan. 17, 2023).
33. “Children’s Online Privacy Protection Rule (‘COPPA’) | Federal Trade Commission.” https://www.ftc.gov/legal-library/browse/rules/childrens-online-privacy-protection-rule-coppa (accessed Jan. 17, 2023).
34. S. Yong, H.-Y. Moon, Y. Sohn, and M. Fernandes, “A Survey of Security issues in Collaborative Virtual Environment,” Ijcsns, vol. 8, no. 1, pp. 14–19, 2008, Accessed: Jan. 17, 2023. [Online]. Available: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.115.5260&rep=rep1&type=pdf.
35. N. J. Gervassis, “From Laws for Cyberspace to Cyber Laws (literally): Integration of Legal Norms into Internet Protocols and Law for Closed Digital Management Communities,” SCRIPT-ed, vol. 1, no. 2, pp. 259–271, Jun. 2004, doi: 10.2966/scrip.010204.259.
36. V. Furashev, D. Zhuravlov, O. Dniprov Oleksii Kostenko, D. Zhuravlov DSc, and O. Dniprov, “Genesis of Legal Regulation Web and the Model of the Electronic Jurisdiction of the Metaverse,” Bratislava Law Rev., vol. 6, no. 2, pp. 21–36, Dec. 2022, doi: 10.46282/BLR.2022.6.2.316.
37. “Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Recast),” in Brussels Ibis Regulation - Commentary, 2022, pp. 1–6.
38. “FEDERAL COURTS JURISDICTION AND VENUE CLARIFICATION ACT OF 2011,” 2008.
39. “Budapest Convention - Cybercrime.” https://www.coe.int/en/web/cybercrime/the-budapest-convention (accessed Jan. 17, 2023).
40. U. States, D. Court, and C. Eduaro, “BRAGG v. LINDEN RESEARCH, INC.,” vol. 593, pp. 593–613, 2007, Accessed: Jan. 17, 2023. [Online]. Available: https://h2o.law.harvard.edu/cases/4435.
41. “Six Unaddressed Legal Concerns For The Metaverse.” https://www.forbes.com/sites/forbestechcouncil/2022/02/17/six-unaddressed-legal-concerns-for-the-metaverse/?sh=7fb552ee7a94 (accessed Jan. 17, 2023).
42. FreemanGuo and MaloneyDivine, “Body, Avatar, and Me,” Proc. ACM Human-Computer Interact., vol. 4, no. CSCW3, pp. 1–27, Jan. 2021, doi: 10.1145/3432938.
43. L. Procter and G. Studies, “I Am/We Are: Exploring the Online Self-Avatar Relationship,” https://doi-org.ezproxy.mnsu.edu/10.1177/0196859920961041, vol. 45, no. 1, pp. 45–64, Oct. 2020, doi: 10.1177/0196859920961041.
44. S. Papagiannidis, M. Bourlakis, and F. Li, “Making real money in virtual worlds: MMORPGs and emerging business opportunities, challenges and ethical implications in metaverses,” Technol. Forecast. Soc. Change, vol. 75, no. 5, pp. 610–622, Jun. 2008, doi: 10.1016/J.TECHFORE.2007.04.007.
45. D. Lucatch, “Digital Identity In The Metaverse,” Forbes, 2021, Accessed: Jan. 17, 2023. [Online]. Available: https://www.forbes.com/sites/forbesbusinesscouncil/2021/12/28/digital-identity-in-the-metaverse/?sh=5a56168f1fb6.
46. E. Union, “Agreement between Interpol and Europol,” Exch. Organ. Behav. Teach. J., pp. 1–10.
47. “Terms of Service and Community Standards - English - Second Life Community.” https://community.secondlife.com/knowledgebase/english/terms-of-service-and-community-standards-r1035/ (accessed Nov. 07, 2022).