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METAVERSE: How to protect trademarks and designs in a virtual universe?
The Metaverse is a new place of exchange, not only for playful activities but also for commercial ones. Brands and products known on the traditional markets are offered to Metaverse users.
A new trend is to use the Metaverse as a base for launching new products, in particular through a NFT (Non Fungible Token) which represents the virtual image of a product offered for sale on the traditional market. Thus, the purchaser of a NFT representing the image of a product, will be able to get the product upon presentation of the NFT, the NFT being used as proof to establish the property of the purchased product, proof of authenticity and the right to have the product delivered on request.
There is thus a certain porosity between the traditional markets and the virtual world of Metaverse.
Therefore, how to prevent the use of a trademark or a design in the Metaverse? Conversely, how to protect a trademark or a representation of a product which has been created in the Metaverse in order to prevent third parties from using it on the traditional markets?
Given this new economic challenge, which is the strategy to protect trademarks and creations?
Trademarks are registered for the products in respect of which they are intended to be used, e.g. clothing, shoes, perfumes, sports goods. Is this protection sufficient for a trademark use in the Metaverse?
The use of a trademark in the Metaverse can be done in different ways:
- Use for the promotion of a product sold on the traditional market, and/or
- Use for the offer or sale of a NFT representing the virtual image of a product, on the Metaverse,
A company could offer for sale with the same mark both the real product and the NFT representing the virtual image of this product.
In such a case, the protection of the trademark must be adapted to the market on which it is to be used, this use being a use in the course of trade. Thus, it will be appropriate to extend the protection of the trademark to goods and services offered on the Metaverse, such as digital images of footwear, computer programs, services for the presentation of goods through virtual images for sale and services for the presentation of virtual images of goods for recreational or educational purposes.
The trademarks used on the Metaverse will also have to be protected against their use in the virtual world and on the traditional market too.
As regards designs, if they are new and have an individual character, we shall have to examine the opportunity to register them not only for the physical product (e.g. for shoes) but also for the digital representation of the image of the product (e.g. the virtual image of the shoe).
Designs may also be registered for the representation of avatars, virtual environments, and also logos when these are used for decorative purposes in the Metaverse.
Watch is also recommended to ensure that third parties are not using the trademark or design without the owner’s consent.
Watch of marketplaces such as Amazon or Alibaba must be complemented by a watch of NFTs’ sales platforms, such as OpenSea, in order to identify and stop the sale of NFTs representing virtual images of trademarked products, often proposed under accounts identified with the owner’s trademark, without its consent.
Lavoix remains available to discuss the above at your best convenience.
EPO survey on grace period
1. The European Patent Office published recently the result of a survey regarding a grace period for novelty.
The EPC requires to date strict novelty for the subject matter of EP patents, rendering publication of claimed subject matter before filing of the EP patent application opposable to the patent irrespective of the question whether the publication stems from the applicant.
Other jurisdictions (e.g. US and JP) provide grace period systems that permit obtaining valid patents even if the claimed subject matter was published by the applicant before filing the patent application.
The survey assesses the impact of the current strict system and the possible impact of a system with grace period.
2. Most of the users of the EPO grant system are aware of the constraints and comply if needed by postponing disclosure of an invention. The highest rate of negative impact of the current system is borne by research organizations (universities), due to their need of early publication of research results.
Universities also have the highest rate of EP applications that are prevented due to the subject matter being disclosed before the possibility to file. Second to universities, applications from US companies are prevented due to pre-filing disclosure.
3. European SMEs, universities and Japanese/Korean companies suffer most from postponed disclosures with a negative impact rate of 68%, 71% and 82% respectively.
Public research organizations (PRO), European universities and Japanese/Korean companies are most impacted by pre-filing disclosures with a negative impact rate of 100%, 95% and 99% respectively.
4. The report also presents possible advantages and inconvenients of four grace period systems: an unrestricted grace period system in which the applicant does not need to accomplish any supplementary act in order to benefit from the grace period; a declaration based system in which the applicant has to declare the pre-filing disclosure; a prior user rights system in which use based on the pre-filing disclosure is not infringing; and a safety net system which combines the two latter systems.
Whether the EPC will be amended in the future, and if so in which way, needs to be seen.
The whole survey is available here
This IP Alert is for information purposes only and does not constitute legal advice.
EPO publishes second edition of the Unitary Patent Guide
Background
It is expected that the Agreement on a Unified Patent Court (UPCA) will enter into force end of 2022 or beginning of 2023. At the same time the European Union regulation 1257/2012 and 1260/2012 will enter into force relating to the European patent with unitary effect (Unitary Patent) and the translation arrangements.
The Select Committee of the Administrative Council of the European Patent Organisation has prepared the secondary legislation, in particular the Rules of procedure relating to Unitary Patent Protection and the Rules relating to the Fees for Unitary Patent Protection. Recently, some of the rules have been updated together with the Unitary Patent Guide.
Unitary Patent Guide
The Unitary Patent Guide explains in detail the procedure at the EPO for obtaining a Unitary Patent and the annex procedures.
In particular, it provides:
• General information about the Unitary Patent (Section A);
• Details how and when the request for unitary patent protection has to be filed and which information has to be provided to the EPO (Section B)
• The compensation scheme for specific SME and organisations (Section C);
• How and when the renewal fees have to be paid (Section D);
• The publication of the EPO regarding the Unitary patent, in particular the content of the register and a file inspection (Section E);
• Details how to register transfers, licences and other rights and file statements on licences of right (Section F);
• Other procedural questions like the language regime, representation and fee payment (Section G);
• Legal remedies against the EPO decisions, in particular the role of the Unified Patent Court and interlocutory revision by the EPO (Section H); and
• Transitional Measures.
The Unitary Patent Guide is regularly updated in its HTML version.
Record Filings at the European Patent Office in 2021
Despite the pandemic filings of European patent applications increased again. 188 600 patent applications were received by European Patent Office (EPO) in 2021, which is an increase of 4.5% in comparison to the previous year.
This is the highest number of applications ever filed in one year. The EPO’s Patent Index 2021 shows that patent filings rebounded significantly last year after a slight dip in 2020 (-0.6%).
In general the number of patent applications is seen as an early indicator of how the budgets of research and development investments of companies worldwide evolve. 
Source website of EPO
For applications in 2021 the top countries of origin were the US (25% of total filings), Germany (14%), Japan (11%), China (9%) and France (6%). Wherein patent applications are concentrated in a few countries, with five countries accounting for 64% of European patent applications in 2021, and the top 20 countries accounting for 95%.
The strongest growth in patent applications at the EPO in 2021 was happened due to filings from China (+24% in comparison to 2020) and the US (+5.2%). Applications from South Korea were also increased in 2021 (+3.4%), while Japan experienced a slight decrease filings (-1.2%). Patent applications from the 38 European Patent Organization countries experienced an slight increase last year (+2.8%). However, the number of applications from Europe continued to decline, falling from 50% of the total in 2013 to 44% in 2021. This trend shows that the European market is considered as relevant to companies outside Europe. Especially companies from Asia, seek to protect their inventions on the European market.
In accordance with the general numbers Huawei was the leading patent applicant at the EPO in 2021 (as in 2019), wherein Samsung, and LG were in second and third place. Ericsson and Siemens both moved up a position, to fourth and fifth respectively. The top ten includes four companies from Europe, two from South Korea, two from the US, and one from each of China and Japan.
This IP Alert is for information purposes only and does not constitute legal advice.
Transfer of IP rights for free: the downside of gratuity
The transfer of intellectual property rights free of charge must be qualified as a donation, and as such must comply with the requirements specific to the matter (Decision of the Paris Court of Justice, February 8, 2022, No. 19/14142).
This case involved a trademark and Community designs owned by two individuals, Mr. X and Mr. Z. The rights were transferred in 2015 to company A, of which Mr. Z is the sole partner and manager.
In 2018, Mr. X criticized the transfer that took place in 2015 and sued Mr. Z and the company A for nullity of the transfer.
The Paris Court of Justice granted Mr. X’s requests and ruled that:
- The trademark and design assignment shall be requalified as a donation;
- The contract is void since it did not comply with the formalities imposed by Article 931 of the Civil Code.
The reclassification as a donation is justified by the fact that the contract concluded in 2015 explicitly entails the transfer of ownership of the trademark and designs “free of charge”.
With respect to the formalism to be observed, article 931 CC provides that “All acts involving inter-vivos donation shall be executed before a notary in the ordinary form of contracts; and a copy of the same shall remain noted, under penalty of nullity”
The case law allows two exceptions to this formalism. The first is the case of manual donation which require the physical delivery of the thing given. The second concerns disguised or indirect donation, for which it is accepted that the conditions of form follow the act from which they take on the appearance.
The code of the intellectual property does not provide for any additional exemption, but only that the transfer of property must be done in writing (article L. 714-1, paragraph 4 of the CPI in its then drafting)
In this case, the things transferred being intangible rights and therefore not susceptible of physical delivery, and the deed of transfer clearly mentioning that the transfer of ownership of the trademark and the models “free of charge”, the contested deed could not benefit from either of the two exemptions.
The court rightly concluded that it was therefore, by definition, an undisguised donation of intangible rights, so that it should have been concluded before a notary. The assignment contract is therefore declared null and void.
The transfer in question concerned physical donors, but an identical solution could have been pronounced, in our opinion, if it had been a question of legal entities as donors. Indeed, the article 902 of the CC provides that “All persons may dispose of and receive either by donation inter-vivos or by will, except those whom the law declares incapable of doing so”, which does not exclude legal entities. The Court of Cassation (C. Cass, com., May 7, 2019, appeal n ° 17-15.621) has confirmed such an assessment.
We recommend to be particularly vigilant when transferring your intellectual property rights, and in particular in the case of intra-group transfers for which it may be tempting to avoid the payment of a price for the transfer. LAVOIX’s team of experts are available to assist you in these procedures.
National, regional and international offices to implement the standard WIPO ST.26 for the sequence listings as of july 1, 2022
The Committee on WIPO Standards (CWS) adopted new WIPO Standard ST.26, which represents nucleotide and amino acid sequences listings in XML, replacing WIPO Standard ST.25.
The representation of sequence listings in XML format rather than TXT format intends to improve access to international sequence databases. The new standard further harmonizes sequence listing practice among patent offices and requires mandatory annotation of additional sequence types (nucleotide analogues, D-amino acids, branched sequences), so that more sequence data will be searchable.
The filing date (not the priority date) is the reference date that determines if the new ST.26 rules apply. Refiling a sequencing listing when a divisional application is made is a matter of national or regional law. As of today, the EPO is understood to require filing a divisional application filed on or after July 1, 2022 in the new ST.26 format.
A newly developed global software tool “WIPO Sequence” that enables the preparation amino acid and nucleotide sequence listings according WIPO Standard ST.26 is provided on the WIPO homepage.
More details on the standard WIPO ST.26 may be found under the WIPO and EPO websites.