International - How the move towards free content will impact trademark policing in virtual worlds
By Jack Ellis
February 14 2012
As online virtual worlds move away from a subscription-based revenue model, developers will increasingly seek advertising spend. While these virtual worlds offer a potentially huge platform to market products and services, trademark protection issues in the virtual world will mirror those in real life.
Previously, the most popular virtual worlds – such as Second Life and massively multiplayer online role-playing game (MMORPG) World of Warcraft – have primarily relied on revenue raised from subscription fees paid by their users, though some have already allowed brands in to varying degrees. However, according to an article from Joystiq, the growing trend of offering a free service to users by handing space over to advertisers has caught the attention of virtual world developers, who are seeking to attract a wider audience than the cult following that many currently rely upon.
As social media and smartphone apps have demonstrated, offering brands an advertising platform is a hugely effective way of bringing free content to users. And the extensive and detailed virtual worlds offered in MMORPGs could offer brand owners breath-taking scope for marketing their products and services. “Virtual world advertising and marketing gives the brand owner the ability to afford the user sensory immersion through the interactive experience of branded product ownership, without even having to ship the product anywhere,” says Theodore C Max, a partner at Sheppard Mullin Richter & Hampton LLP. “Brand owners also are able to demonstrate virtual products or services in real time. These abilities enable the brand owner to form an immediate association between the media and the message, since users are a part of the media through the emotional interaction of virtual reality. The brand owner has the opportunity to share its goods or services and to entertain, inform, persuade, and interact with any potential consumers throughout the world.”
As virtual worlds are intended to be analogues to the real world, interactivity and engagement between brand and consumer is possible to an almost unprecedented level. In Second Life, avatars can already purchase their favourite brands of clothes, foods and so on. Virtual fashion shows, movie releases and music concerts are all. However, since the virtual world is an imitation of the real world, the same trademark and trade dress protection issues are likely to arise, with similar danger of infringement and counterfeiting of those goods as in the real world. “The same level of care one employs in the real world should be employed in virtual reality,” explains Max. “If the virtual good or service is not user-friendly or suffers from consumer dissatisfaction in the virtual world, this may harm real-life consumer goodwill which is at the heart of the advertisement, and could reflect poorly on the brand. Simply put, the translation of real-life goods and services into virtual reality is key to selling or promoting branded goods in the virtual world. There are numerous designers who design specifically for virtual reality, and consumers are extremely demanding in their expectations of quality. The level of technology, care, and quality control should be commensurate with the audience's brand expectations.”
Some brands may have concerns about the level of control they can retain over their trademarks once they have entered the virtual world, and there is the prospect that marks might be portrayed or used in ways which could be potentially damaging. “When IP rights are being licensed for use in multiple regions or worlds, or through an agent or a master licensee, care should be taken to maintain control and approval,” adds Max. “This applies not only of the licensed products and the particular sites, but also the manner and context of the display, use of, and interaction with the licensed property.”
Brand owners should be sure to check with virtual world providers that they have sufficient rules in place to offer adequate protection for their marks. “In some cases, a particular site may have limitations or restrictions for its residents that might eliminate the need for approval of the manner and context of the display, use and interactivity of the licensed IP,” explains Max. “This level of quality control is especially needed where the contract or licence is not directly negotiated with the site.”
It is therefore important to make sure that adequate protections for trademarks are included in any contract made with a virtual world provider. “The grant of rights is critical,” concludes Max. “The extent to which the licensee has the ability to remove licensed products from a site may be an important consideration, depending upon the nature of the use in a game format by avatars. Certain sites have greater control over the use of products by consumers and will have the ability to revoke prior purchases, disable the use of licensed products by a consumer, and affect immediate take-downs. Care should be taken in terms of deciding which sites will be granted a licence, to anticipate and avoid potential difficulties in the future.”
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Counterfeiting Virtual worlds Related rights Confusion Internet issues Ownership changes Infringement BrandShare article
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