A Guide to Trademark Protection in the Metaverse for Small Businesses

By Sophie Edbrooke, Esq.

Small businesses are looking to get in on the ground floor of the metaverse, just like industry giants Walmart®, Nike®, and McDonalds®. The difference is, that the big companies have the resources to guess where the metaverse is headed and the manpower to research what the metaverse actually is. So how can a small business stay on the cutting edge and avoid losing out on valuable trademark rights? Here are four things you should know about how to protect their intellectual property before joining the metaverse.

What is the Metaverse?

The “metaverse” does not refer to any specific company’s virtual world and the concept is still in the early stages of development and growth. You are betting on the future when you invest in the metaverse. Even the largest companies are still developing new guidance and strategies for protecting IP in virtual worlds but there are best practices for every trademark that applicants can still follow on a path to successfully protecting their trademarks, whether in the real or virtual world.

First, consider filing as soon as reasonably possible to get your spot “in line.” The USPTO allows applicants to reserve rights in trademark before they launch in the US marketplace. These are called “intent to use” or “Section 1(b)” applications. You can file an intent-to-use application broadly to cover any products or services in which you have a bona fide intent to provide in U.S. commerce. Your trademark protection will date back to that original filing date and you will need to provide “proof of commercial use” only after the USPTO reviews and approves the application. You can also file up to five extensions on the application for six months apiece, essentially giving you three more years from the date of approval to launch and still get protection dating back to your early filing date. When filing the proof of use, you can also delete any of the goods or services you do not provide.

But how do you determine what to file for? How much is too much in an application? The USPTO organizes its categories into 48 different “classes” called International Classes. The government filing fees are based on the number of classes you file for – currently the USPTO filings fees are $350 per class for a standard application.

However, your budget for government and legal fees should not be the only thing that dictates your strategy. The broader you go, the more likely you are to overlap with prior existing rights of another trademark owner, whether they actually compete with your core products or services or not. Also, since the metaverse is undefined, it is easy to file an unrealistically large application that is not feasible to accomplish in 3-4 years. So do you go big? Or just stick your foot in the door? That all depends on your budget and the scope of your metaverse project (as well as scope and rights of existing trademarks.) One highly recommended strategy is to perform a “comprehensive search” of your trademark to gauge the likely risks associated with the word and phrase- the results may surprise you, as the USPTO will not compare a trademark only to exact trademarks filed with the USPTO for exact goods/services. They look at confusingly similar trademarks for related goods/services, which will likely include non-metaverse filings.

These considerations will help refine your strategy, but first, you need to be able to personally define the nature of your new projects, and how your company will be “entering” the metaverse economy.

How Can Your Small Business Get Involved in the Metaverse?

The metaverse may not have one clear direction, but there are some indications based on others’ trademark filings and business practices.

• Games: Virtual reality games are becoming a big portion of the metaverse where users can don their virtual reality headsets and feel like they’re actually inside their favorite games. Some companies, such as Roblox®, are even allowing platforms for users to create virtual reality metaverse games for other users.

• Immersive Virtual World: Another way to enter the metaverse is to offer goods or services in an immersive virtual world. If you do not have the resources to become a platform hosting a metaverse world or game by itself, you can offer services on what people are betting will be the new “metaverse.” This might sound confusing, because which company will let another host on its site? What companies are betting on is that one or two big companies will host and plan the metaverse platform, and it will be like living life online. In this virtual world you can go shopping at virtual retail stores like Walmart®, use virtual reality try-on, get virtual UPS® delivery, eat at a virtual McDonald’s®, and hang out at a virtual bar with friends. You can be like these companies by preparing your virtual goods or services trademark filings and anticipating this one metaverse platform emerging.

• Metaverse Service Providers: When there is a “gold rush,” sometimes the most profitable place to be is providing services to those seeking their fortunes. Consider whether you are providing a service that is not directly offered through the metaverse, like a game, or in-world service, but whether you are offering metaverse marketing services, financial services, or other support to makers and others in the metaverse.

What Trademarks Should Your Small Business File to Invest in the Metaverse?

One type of metaverse filing being made is for virtual world. Those filing include protection for downloadable/SaaS software to access the metaverse. These types of filings indicate that some companies are planning on creating software to be one of the platforms where users interact with all the other users and virtual goods and services. These types of platforms are akin to what we now consider Google Chrome, Mozilla Firefox, Safari, and Internet Explorer software systems. Meta Platforms f/k/a Facebook is currently the frontrunner for this type of platform, but there are plenty of other businesses angling to compete, such as Decentraland or even Roblox.

The second most popular type of filing is a digital good or digital service. These will typically be “downloadable images” or “non-downloadable images” for entertainment purposes by the USPTO’s classification. For smaller businesses, these may be the best option if you do not have the bandwidth or ability to create an entire platform. This will also ensure that no other business is planning on using your business name in the metaverse space.

Finally, service providers may take a more traditional approach, applying for the broad services within its appropriate International Class with the USPTO, but also including separately clauses specifically noting the connection to the metaverse.

What to do with Your Intellectual Property While Waiting for the Metaverse to Take Off?

As with any emerging field, this is a risk to invest in this part of your trademark portfolio, so you should not neglect the rest of your portfolio. You should keep up to date on your other filings, registrations, and renewals, and ensure the active portions of your business are still protected.

Additionally, as you wait for the USPTO to review your metaverse filings, keep monitoring the market and determine whether there are additional metaverse filings being made by the companies that you should consider.

Do you have any metaverse trademark filings that you want to make? Do you want to talk about bringing your business to the metaverse? Gerben Perrott, PLLC has filed all types of metaverse trademarks and would be happy to help!

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Sophie Edbrooke, Esq.

Sophie Edbrooke, Esq. is an associate attorney at Gerben IP. She works closely with clients to provide individualized counseling on trademark and copyright matters, across a wide variety of industries. Before joining Gerben IP as an associate, Sophie worked for the firm as a law clerk and summer intern.