Can Virtual Digital Humans Use Trademarks? 

What New Challenges Does the Development of the Metaverse Bring to Trademark Protection? The metaverse, as an emerging field blending virtual and real worlds, is attracting the attention of global businesses. In August 2023, China introduced the “Three-Year Action Plan for the Innovative Development of the Metaverse Industry (2023-2025),” and in 2024, the financing scale in the metaverse-related sector reached 19.96 billion yuan, a year-on-year increase of 32.3%. With the vigorous development of the metaverse industry, it has posed new challenges to the trademark legal system.

Challenges in Metaverse-related Trademark Protection

In terms of trademark registration, virtual space-related trademark registration applications face difficulties in classifying goods and services. The variety of virtual goods and services in the metaverse cannot be promptly accommodated by the latest version of China’s “Similar Goods and Services Classification Table” (hereinafter referred to as the “Classification Table”). Some metaverse-related trademark registration applications have been rejected because they could not clearly specify the category of their goods or services, failing to meet existing trademark classification standards. The large number of non-existing norm types of goods and services outside the Classification Table has brought new challenges to trademark examination. Additionally, the widespread attention the metaverse industry has received has increased the demand for defensive trademark registration. Some companies, to prevent malicious trademark squatting or dilution, tend to register defensive trademarks, often in the form of “well-known enterprise name + metaverse” combinations.

In terms of trademark use, the use scenarios of metaverse trademarks are more realistic, and the entities using them are more diversified, including not only traditional enterprises and users but also new entities such as virtual digital humans, making the definition of trademark use behavior more complex. In the virtual space of the metaverse, the dissemination of virtual goods and services is not geographically limited, with users spread across the globe, making it difficult to define the scope of use based on the territorial standards in traditional trademark law.

In terms of trademark infringement determination, the lack of clear rules for judging the similarity between virtual goods and real goods, as well as virtual services and real services, leads to significant controversy in determining trademark infringement. Secondly, the determination of the likelihood of confusion is more complex. The diversity and virtuality of trademark use in the metaverse undoubtedly make the identification of the source of goods or services more complicated, increasing the difficulty of judging confusion. Finally, the development of the metaverse industry may lead to a large number of parodies of real-world trademarks, involving complex issues such as goodwill protection, which pose new challenges to trademark infringement determination.

New types of trademark conflicts arising from this

Conflicts between virtual space trademarks and real-world trademarks are manifested in the crossover of trademark usage scenarios, such as using real-world trademarks in virtual spaces, which is essentially a boundary issue of trademark exclusive right protection. The MetaBirkins case is a landmark case globally involving trademark infringement of non-fungible tokens (NFTs), attracting widespread attention. In December 2021, American digital artist Mason Rothschild created and released 100 NFT digital handbags inspired by the classic Hermès铂金包 (Birkin), named “MetaBirkins,” and openly sold them on multiple platforms. In January 2022, Hermès S.A. sued Mason Rothschild, accusing him of unauthorized use of the “Birkin” trademark, constituting trademark infringement, trademark dilution, and domain name hijacking. In June 2023, a jury in the U.S. District Court for the Southern District of New York ruled that the “MetaBirkins” NFTs created by Mason Rothschild constituted trademark infringement and trademark dilution, requiring him to pay compensation to Hermès. Regarding this case, some argue that the scope of trademark protection in the real world can be extended to virtual goods and services, while others believe that the scope of trademark protection in virtual spaces is different from that in the real world and should be registered separately.

Regarding the conflict between virtual space trademarks and virtual space trademarks, a typical case is the Minsky v. Linden Research Inc. case. In 2006, plaintiff Minsky joined the virtual world game Second Life and opened a virtual art gallery named “SLART” within it, subsequently filing a trademark registration application with the U.S. Patent and Trademark Office. Later, Minsky discovered another user had opened an art gallery named “SLART Garden” in Second Life. Minsky then filed a trademark infringement lawsuit against the operator of Second Life and the user in the U.S. District Court for the Northern District of New York, accusing the operator and the user of infringing and diluting his trademark rights. Although the case was settled, the court did not issue a clear ruling on the issue of trademark infringement, but it had issued a temporary restraining order in September 2008, prohibiting users of Second Life from continuing to infringe on the “SLART” trademark, thereby confirming that Minsky’s “SLART” trademark was protected in the virtual world. Although the case has concluded, the effectiveness and scope of protection for virtual space trademarks remain unresolved. Whether virtual space trademarks can be protected across platforms, what their similar product categories are, and other such issues must be addressed as the metaverse industry further develops.

To address the classification challenges related to virtual trademark registration applications arising from the hype of the metaverse, the European Union Intellectual Property Office (EUIPO) released guidelines on the classification of virtual goods and NFTs in June 2022, which specify the definitions of virtual goods and NFTs and their relevant registration categories. The guidelines state that “virtual goods” and “NFTs” should be classified under Class 9 of the Nice Classification and require that the content of virtual goods and NFT digital items must be specific and defined. China can draw on the EU’s classification methods by adding subcategories for virtual items and NFTs under Class 9. By establishing dedicated subcategories, the specific scope of various virtual goods and services can be clarified, providing clearer guidance for trademark registration.

Metaverse Trademark Protection Recommendations

Regarding the determination of trademark infringement in virtual environments, the premise should still be based on trademark use behavior. For the characterization of trademark use in virtual spaces, it must be judged whether the trademark use has commercial purposes. If it is used to promote goods or services in virtual spaces and such use may cause consumers to be confused about the origin of the goods or services, it should be recognized as trademark use behavior. At the same time, the reputation and distinctiveness of the trademark should be considered. High-reputation and highly distinctive trademarks should receive a higher degree of protection.

The standard for determining trademark confusion in virtual environments can draw on traditional trademark confusion theories and be adjusted based on the characteristics of virtual spaces. Confusion in virtual spaces may exhibit “cross-scenario” characteristics, where users, due to misidentification of virtual goods, affect real-world consumption decisions. We can learn from typical practices abroad. First, determine whether the trademark use has “artistic relevance” with the content of the involved work. If there is no relevance, it constitutes trademark infringement. If there is a minimum level of artistic relevance, further judgment is required. Second, does the use of the trademark create “obvious misguidance” for consumers? Does it induce consumers to believe that the work is produced or authorized by the plaintiff? If so, it constitutes trademark infringement; otherwise, it does not. Finally, we can further refine the theory of infringement judgment for trademark dilution, reputation damage, and reputation riding, thereby forming trademark infringement judgment standards adapted to the development of virtual environments in the metaverse.