An Introduction to the Metaverse and its Potential Legal Issues
An Overview of the Metaverse
Last Thursday, Facebook announced its rebranding pivot and changed its name to Meta to reflect its new focus on developing the metaverse.
The term ‘metaverse’ is typically used to describe the concept of a fully immersive virtual universe, in which you can interact with people and places using avatars. Although it is currently unrealised, it has proved a hot topic of discussion, and various businesses have come up with their own conceptions of what the metaverse will look like. In its rebranding event, Meta stated that it sees the metaverse as being the successor to the mobile internet as we know it today. Law firm Morgan Lewis describes the idea as ‘an ultimate culmination of virtual reality and augmented reality’.[1]
For context, we have already had a glimpse of what this new online age could look like. Musicians were able to perform through virtual reality concerts during the pandemic, and five years ago Pokémon Go showed the world how digital content can be combined with the real world (albeit in a rudimentary way). It should also be noted that the idea of an immersive virtual universe is not a new one.[2] One can find articles discussing similar concepts from over ten years ago.[3]
Tied into the development of the metaverse is the increasing popularity of non-fungible tokens (NFTs). While at this stage, NFTs are popularly seen as a way of decorating your house within the metaverse with digital art, Thomson Reuters have discussed other ways in which they could be used – as tickets for a virtual concert, for example.[4] To really understand the power behind the metaverse concept, consider that Facebook’s rebranding caused the native token (MANA) of a 3D virtual reality platform called Decentraland – which can be used to pay for virtual plots of land – to spike 400%.
Legal Implications
Naturally, such a massive and innovative project will pose many legal questions. One obvious concern is privacy. Facebook’s reputation in this regard is far from perfect. A writer from Reuters queries, ‘which privacy rules will apply in the metaverse?’[5] There has also been discussion of aspects such as environments being created by AI in the metaverse. In a recent AI case,[6] the US District Court for the Eastern District of Virginia held that an AI system cannot be listed as an inventor on a patent. Unless the law changes, this may mean that AI-created aspects of the metaverse will not be allowed certain types of intellectual property protection. Clearly, the implications of the Metaverse for the legal community and within the regulatory community are enormous.[7]
In the face of such legal concerns, law firm Reed Smith released “Reed Smith’s Guide to the Metaverse” in May this year, a 76-page white paper aiming to offer a ‘small and humble overview of some of the legal issues affecting and arising from [the metaverse]’.[8] For some areas of law (namely, privacy), the firm has concluded that the metaverse ‘could well prove to be a stretch too far’.[9] However, in others (namely, intellectual property), one of the paper’s authors has said that he anticipates that the existing law ‘will prove flexible enough to handle emerging metaverse issues’.[10]
Therefore, although it seems clear that the metaverse would have a huge effect on the legal community, the exact extent and nature of this effect remains to be seen. Nevertheless, should the metaverse become a reality, aspiring lawyers should certainly expect to see it factor into their work in the future.
[1] Rahul Kapoor and Shokoh H. Yaghoubi, ‘A Brief Overview of the Metaverse and the Legal Challenges It Will Present’ (Morgan Lewis, 12 October 2021) <https://www.morganlewis.com/blogs/sourcingatmorganlewis/2021/10/a-brief-overview-of-the-metaverse-and-the-legal-challenges-it-will-present> accessed 1 November 2021
[2] Gregor Pryor et al., ‘Reed Smith Guide to the Metaverse’ (Reed Smith, 19 May 2021) < https://www.reedsmith.com/en/perspectives/2021/05/reed-smith-guide-to-the-metaverse> accessed 1 November 2021
[3] Richard Tromans, ‘The world is not enough: law for a virtual universe’ (2007) 70 European Lawyer 21.
[4] Joseph Raczynski, ‘The Metaverse is coming: Is the legal market prepared?’ (Thomson Reuters, 11 October 2021) <https://www.thomsonreuters.com/en-us/posts/legal/legal-metaverse/> accessed 1 November 2021
[5] Jenna Greene, ‘Reed Smith boldly goes where no law firm has gone before – the metaverse’ (Reuters, 20 May 2021) < https://www.reuters.com/business/legal/reed-smith-boldly-goes-where-no-law-firm-has-gone-before-metaverse-2021-05-20/?> accessed 1 November 2021
[6] Thaler v. Hirshfeld, 1:20-cv-903(LMB/TCB) (E.D. Va. Sep. 2, 2021)
[7] Raczynski (n4).
[8] Pryor (n2).
[9] ibid.
[10] Greene (n5).
