Understanding IP Rights in Metaverse Buildings

Buildings are a common component of creating a virtual world. However, developers of metaverse properties may need to learn the legal rights in question. Can a representation of a real-world building be included in a virtual one without violating the rights of real-world property owners? Do the designer, owner, or user of a physical structure have any legal claims against a virtual counterpart of that same structure? How does a virtual building’s creator transfer it from one virtual environment to another?

Whether copyrights or trademarks are in question, whether any of these rights have been assigned to another party, and who is asserting the requests are all factors that could affect the answer.

Copyright Law

Although the issue has not yet been resolved under U.S. copyright law, the discussion in related circumstances offers valuable advice. The U.S. Copyright Act allows “displays” of architectural works that are visible from public areas, even though it does protect architectural works. This protection is different from other kinds of work, such as taking a picture, where the photographer might be able to stop someone else from showing it. The rights provided to the copyright owner for architectural works specifically exclude the display. (It is important to note that unless the architect assigns that copyright to the owner, the architect is the copyright owner of architectural work.)

3-D replicas are not covered by this limited exception. In this usage, a 3-D object refers to a real 3-D thing rather than a 2-D image intended to appear 3-D. Therefore, the owner of the underlying architectural work would need to provide a licence to, say, a vendor of model building memorabilia.

However, although the metaverse has grown to offer users a more lifelike, 3-D experience, existing legal precedent and legal scholarship agree that a computer-generated representation of a work, whether in conjunction with a CAD programme or a virtual environment, is not a 3-D copy as defined by the statute. Even in virtual worlds, on-screen representations have typically been regarded as 2-D displays rather than 3-D copies.

Nevertheless, the existing commentary is somewhat dated. A court might have a different perspective if it considered the issue in light of today’s more sophisticated virtual technologies, which genuinely convey the impression that one is in 3-D space. Since only scholars and not courts appear to have made judgments on the topic of 2-D versus 3-D categorisation of virtual worlds in this context, there is always a small risk that a court could decide the issue differently, even though those who make metaverse versions of real-world structures would probably have a solid reason to claim that they do not infringe on American rights.

The copyright laws may also apply differently to developers of metaverse “architecture” than real-world architecture developers. In the Metaverse, a separate architectural work would probably be regarded as a graphical creation (and the underlying code would also be protectable as a copyrighted software work). Therefore, compared to digital imitators of real-world architecture, digital imitators of metaverse architecture may face more limitations.

Trademark Law

While copyright may not be sufficient to protect architects from virtual representations of their buildings, trademark rights might. Buildings are frequently the subject of copyright and trademark protection. For instance, specific images of the Empire State Building are protected as registered trademarks, giving its owner the right to stop them from being used incongruously on various goods sold commercially.

The owners of any associated trademark rights in any distinctive real-world building replicated in the metaverse may claim that such uses are likely to confuse consumers and cause them to believe that the virtual user is related to, sponsored by, or affiliated with the real-world building’s owners. Additionally, we recently observed that courts have been hesitant to dismiss trademark lawsuits when a digital product contains a physical brand’s trademark.

Buildings can register their trademarks if they are used for a particular purpose. As an illustration, physical locations with registered trademarks include:

  • The recognisable spire of the Chrysler Building in New York is registered as a trademark in the United States under the term “leasing office space and attendant services to tenants.”
  • The Chicago Willis Tower (U.S. Trademark Registration No. 3,779,129) is used in conjunction with “[r]eal estate services, specifically listing, leasing, and managing commercial property and office buildings.”

As a result, a virtual shopping mall including a metaverse twin of the Chrysler Building or the Willis Tower won’t infringe on the trademark registration.

However, the analysis may become more challenging if the actual structure is recognised as a well-known trademark. Even against uses unrelated to the services for which the mark is registered, famous marks are protected.

Additionally, even less well-known marks can frequently prevent uses in the “natural zone of expansion” of the services for which they have been registered. Owners of buildings that rent out commercial space, for instance, might claim that since these structures frequently house shopping malls, using a trademarked building as a mall in the metaverse would lead users to mistakenly believe that the owners of the real-world mall are affiliated with, supporting, or endorsing the metaverse building.

Developers should exercise caution until the courts have a chance to weigh in on these questions because they are still unclear in the context of the metaverse.

Contract Law

Let’s say that a metaverse building developer is confident that the proposed structure won’t violate any real-world building developer’s copyright or trademark rights and qualifies as a visual work for U.S. copyright law. Even in this case, the developer must consider whether it preserves these intellectual property rights when creating the selected metaverse.

There must be a single, all-encompassing metaverse where creators can place their virtual structures. Instead, numerous distinct virtual environments—made, hosted, curated, and maintained by various organizations—invite developers to create metaverse-like properties within those environments.

These virtual worlds are accessible to users and developers on specified terms and conditions. It will be crucial for the developer to carefully read these provisions to decide whether to keep the U.S. intellectual property rights attached to any developed architectural works or transfer them to the virtual world operator. The developer’s choice of where to build may be influenced by knowing whether these rights are transferred, especially since the developer might be unable to stop others from copying the original work or moving the actual work to other virtual worlds.