IP: Food and Hospitality Operators Get Metaverse-Ready

By Marisa Broughton, partner and trade mark attorney at European intellectual property firm, Withers & Rogers (www.withersrogers.com)

Food and hospitality operators are among those debating whether or not to follow in McDonald’s footsteps by filing trade mark applications to protect their brands in the metaverse. Do they need to get metaverse-ready?

The metaverse is a rapidly growing interconnected network of virtual locations where users can hang out and meet up with popular businesses and brands. Using platforms such as Mark Zuckerberg’s Metaverse, The Sandbox and Decentraland, they can view artwork or the latest fashion and check out the latest releases from their favourite musicians. NFTs or ‘non-fungible tokens’ are digital assets that exist in the metaverse, representing a real-world object – for example, a jpeg image, an artwork or a piece of music. They can be bought and sold online, typically using a cryptocurrency.

Over the past year, the metaverse has seen a meteoric rise in popularity, and by 2024 it has been estimated that the metaverse marketplace will be worth $800 billion. Recognising the commercial opportunity it represents, many well-known consumer brands are already staking a claim to the metaverse, even if they haven’t yet worked out a way of using it commercially. Earlier this year, McDonald’s chose to file 10 trade mark applications at the US Patent and Trade Mark Office (USPTO) for virtual food and beverage products and a virtual restaurant. The fast food chain claims that it will soon be possible for visitors to its virtual restaurant to order food and choose for it to be delivered in person or online. Another US-based fast food giant, Wendy’s has also recently moved into the metaverse, creating an online base called the ‘Wendyverse’, where online consumers can come to meet the brand and order virtual products. Similarly, Panera Bread, the US bakery and café chain, has filed a trade mark application for the ‘Paneraverse’.

As more prominent brands decide to get metaverse-ready, a growing number of food and hospitality operators are expected to follow suit.

Increasingly, businesses in the sector view the metaverse as an opportunity to encourage brand engagement and promote their real-life products and services, but they also want to stop others from infringing their rights by copying their brand names and logos.

Finding a way to block infringers in the metaverse is not as straightforward as it might sound. Intellectual property rights, such as trade marks and registered designs, are limited to the territories in which they are protected, whereas the metaverse has no territorial boundaries. Therefore, to enforce a UK trade mark registration in the metaverse, the rights owner would need to prove that the infringer was targeting UK consumers. In some cases, it may be difficult to identify the infringer, as the metaverse allows a high level of anonymity to users. The lack of IP-related case law in this area is a growing cause of concern for brand owners and some are choosing to bolster their rights portfolios by filing specific registrations to protect their virtual goods and services.

The prevailing legal uncertainty has led to a number of legal disputes arising from user activities in the metaverse, and more disputes of this nature are likely. Earlier this year, Hermes filed a trade mark infringement claim in the US over the sale of ‘MetaBirkin NFTs’ by Mason Rothschild, due to their similarity to their world-famous Birkin bag. Nike is also suing StockX over the sale of NFTs that are apparently based on limited edition Nike footwear.

Regardless of whether food and drink operators want to enter the metaverse, or prevent copycats from diluting their online brand presence, it is important to be prepared. A key step is to ensure that they have sufficient protection for any virtual goods and services that they are offering in the metaverse or plan to introduce in the near future. For example, if a brand owner is intending to launch a new virtual product based on a real-life equivalent, they should file a trade mark registration in Class 9, which is the classification for all virtual goods. They should also keep an eye on all NFT marketplaces and be prepared to enforce their IP rights, seeking recourse through the courts if necessary.

Food and hospitality operators are right to view the metaverse as a new market opportunity and treat it with an open mind. However, they should also be aware that their brand will require protection. Securing trade mark or design registrations in the right classifications will ensure they are in a stronger position should they decide to enter the metaverse.