Metaverse Fashion Week – or MVFW – got its start on Thursday, with Dolce & Gabbana, Paco Rabanne, Elie Saab, Tommy Hilfiger, Etro, Dundas, Cavalli, Cider, and The Fabricant among the many established brands and digitally-native fashion startups that announced that they would showcase their collections virtually during the first of its kind event. An immersive shopping experience, consumers are able to not only view virtual runway collections during MVFW on 3D virtual-world platform Decentraland, but they will have the opportunity to buy virtual clothing for their online avatars, and in some cases, receive a physical twin of that garment for their “real” world wardrobe.
In light of the enduring rise of consumer interest in virtual fashion and brands’ willingness to test the waters by way of events like MVFW (which is not only a sign that “virtual fashion is here to stay and virtual fashion will continue to become something that is of interest for brands,” future-focused consultant Cathy Hackl told the WSJ, it is also a notable step (a first step in many cases) for brands that are dipping their toes in the virtual space), here are some considerations for brands as many make their metaverse debut …
1. The territorial scope of existing trademarks
A trademark registration is a property right, and its scope is determined by the country/territory in which it is registered. Selling physical products via the metaverse to a customer in a territory where a brand has no existing trademark protection, or where no due diligence has taken place (i.e., a clearance “search” to determine whether third parties have any earlier rights), could expose brands to infringement proceedings. Well-known fashion brands selling physical and virtual products via Decentraland this week may be able to rely on their already-established reputation in a trademark infringement dispute. However, smaller, lesser-known fashion brands may struggle to do the same.
As such, and given that the metaverse can be joined by anyone in the world that has access to the internet, it may be necessary for fashion brands to put controls in place to halt the sale of physical and/or virtual items via the metaverse where the location from which the product is being purchased is a new market and is a territory in which no assessment has yet been undertaken of the risks involved in use of the brand.
2. Whether your brand needs to expand
Pending or registered trademarks cover categories (or “classes”) of goods and services. While the sale of physical fashion items via the metaverse may be protected by “clothing; headgear; footwear” in Class 25, if a fashion brand is intending to sell virtual goods via the metaverse, there is a question mark over whether the virtual version could be covered by Class 25 or whether it may fall under a different class of goods.
Fashion brands may, therefore, wish to consider extending their current trademark protections to cover virtual goods and services. By way of example, on March 8, Red Bull GmbH applied for a U.S. trademark application for the sign “RED BULL” and its “fighting bull logo” for use in connection with “downloadable virtual goods, namely computer programs featuring clothing, footwear, headwear” in Class 9, as well as “retail store services featuring virtual goods, namely, clothing, footwear, headwear” in Class 35. In doing so, Red Bull GmbH joins a long list of brands that have sought out registrations for their marks for use in metaverse-focused classes of goods/services.
3. Clearance searches before use in the metaverse
Since it is not entirely clear whether providing virtual fashion items via the metaverse constitutes diversifying the product range of an existing brand, it is important to carry out “top-up” searches to ensure that there are no legal issues in using the brand in relation to the virtual goods. Given that trademarks are territorial, it may be necessary for fashion brands to seek local advice on whether to search in each territory in which the virtual fashion items will be sold.
If there are plans to sell physical fashion goods to new markets in the metaverse, searching in Class 25 (“clothing; headgear; footwear”), for example, may also be necessary (subject to local advice). In addition, it may be necessary to file a new application to ensure you have registered trademark protection for the new product range.
4. Coexistence agreements
Finally, an agreement between two or more companies agreeing to limit their use of the same or a similar trademark in certain territories in order to coexist (this issue is at the heart of the ongoing Valentino v. Mario Valentino case) may prevent the respective parties from selling to certain consumers in the metaverse. The uncertainty surrounding whether virtual goods would be classified in Class 9, Class 25 or some other class may also impact agreements where the parties have agreed to limit their use of the same or a similar trademark to specific classes/goods/services.
Fashion brands should, therefore, consider seeking local advice to determine whether the planned use may constitute breach of contract.
Michael Shaw is a Partner at Marks & Clerk, with experience in all aspects of trademark, copyright, and design work. John Ferdinand is a Partner at Marks & Clerk who works with a portfolio of national and international clients on developing a strategy for their trademark protection. Eve Brown is an Associate at Marks & Clerk, where she advises clients on issues concerning worldwide brand strategy and trademark protection.
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