Cyprus IP Law In The Metaverse


Metaverse generally refers to a highly immersive virtual world where people gather to socialise, work, and play, the term originating from Neal Stephenson’s 1992 novel ‘Snow Crash’. The prefix ‘meta’ derives from Greek and means ‘after’, the term thus implies evolution from our common shared experience, our ‘universe’. The concept gained traction after Facebook relaunched as Meta and has prompted some to regard the metaverse as the Web 3.0.

According to analysts, the metaverse necessitates three different elements: i) the superposition of the digital world on the real world ii) a device which allows access to this enhanced reality and iii) real-time or collected information of the real world and/or the user which customises the user’s experience. The theory may point to the concept being somewhat exotic and remote, however real -world experiences have increasingly been migrating into the digital world, a phenomenon accelerated by physical restrictions imposed by the ongoing COVID pandemic. One can think of Zoom meetings, distance learning, virtual tours, flight simulators, interactive video games, and so on.

The metaverse offers exiting possibilities in an array of human activities, such as entertainment, education, commerce, manufacturing, and construction. From a legal point of view, it is just as fascinating, as it impacts a variety of areas of the Law, both civil and criminal. Moreover, existing laws may be inadequate to cover its many outlets, and its projected universal application lends itself to complex multijurisdictional disputes. One area of the law where the metaverse is expected to feature prominently is Intellectual Property (IP), especially regarding copyright and trademarks.

Copyright constitutes an intellectual property right that grants exclusive protection to the creator of the work, for instance an author, painter, computer designer, or database manufacturer. The right in Cyprus is acquired and can be exploited automatically with no need for registration. The Cypriot law of copyright is governed by the Copyright and Neighbouring Rights Law 1976, Cap. 59, as amended. (the ‘Copyright Law’).

Under Articles 3 and 4 the Copyright Law protects the rights of the owner of i) an original work ii) created/published in Cyprus, who at the time of creation of the work was iii) a Cyprus citizen or habitual resident, or a legal entity constituted in Cyprus, or an EU citizen.

Moreover, Cyprus has signed 5 international copyright agreements, such as the Berne Convention for the Protection of Literary and Artistic Works, the Universal Copyright Convention, and the WIPO Copyright Treaty. These offer protection to non-Cypriots and/or works not created in Cyprus between signatories. However, it is worth noting that Article 18 of the original 1976 Copyright Law which stipulated the Copyright Law applies to works protected under binding international agreements was removed in 2002.

The metaverse is bound to feature works which are copyrightable, such as software, pictures, graphics and music/sounds, in ever increasing quantities. Moreover, it is expected to feature Non-Fungible Tokens (NFTs), i.e., non-interchangeable units of data stored on blockchain that may be sold or traded. Copyright litigation involving NFTs is already here, for instance in 2021 record label Roc-A-Fella sued one of its co-founders for auctioning the cover of a Jay-Z album as an NFT. Moreover, IP litigation following the advent of new exploitation methods is historically common, for instance National Geographic was involved in a long dispute with its authors for the right to publish its magazines as a CD-ROM collection.

Though Cyprus recognises the creation of copyright without need for registration, registering and properly marking copyrights in metaverse assets and software is strongly advised, even if simply to be used as a means of evidence of origin. It is also important to review existing distribution licences to ensure they can be extended to the metaverse. Exclusive licences may be granted as written license agreements.

Trademark ™

A trademark is a distinctive element or combination of elements used to distinguish the products or services of an enterprise from those of other enterprises. These elements include for example words, letters, drawings, colours, shapes, and sounds. In Cyprus trademarks are governed by the Trademarks Law, Cap. 268 (as amended) (the ‘Trademarks Law’), which was recently amended to align with the EU Trademarks Directive (Directive (EU) 2015/2436). Unregistered rights in trademarks are also protected under s. 35 of the Cyprus Civil Wrongs Law, Cap. 148.

Electing to register a trademark confers exclusive rights over its use and exploitation, including supply of products and services under the trademark, and increases the likelihood of issuing interim measures and/or claiming damages over unauthorised use by third parties. Registration confers protection according to geographical area, i.e., a nationally registered trademark protects only in Cyprus. A registered trademark is valid for an initial period of 10 years, which can be renewed indefinitely for consecutive 10-year periods.

Trademarks are just as important elements in the virtual world as in the real world, and their deployment allows businesses to reach a wider consumer base. Case law originating from the US seems to suggest that enforcing trademark rights in the virtual world is quite tough, for instance in E.S.S. Entertainment 2000 Inc. v. Rock Star Videos Inc., virtual depiction of an actual strip club in the computer game Grand Theft Auto was held not to infringe trademark laws, as consumers were not likely to regard the club as the producer of the game. On the flip side, in the UK internet case British Telecommunications plc v. One in a Million Ltd, registration of famous trademarks as domain names by the defendant constituted trademark infringement, even though the defendant never intended to use the domain names, attempting to sell them to the trademark owners under threat of disposal.

Sound practice therefore commences with registration of the trademark in the appropriate geographical area(s). Moreover, the projected vastness and complexity of the metaverse advocates subscribing to some form of trademark infringement monitoring service. The Trademark Law under Article 4 places the ability to distinguish between products and services of different businesses at the centre of the definition of a trademark, therefore careful analysis on whether/how a suspected infringing activity affects this ability to distinguish between brands is key to successful litigation. Lastly, under Article 19 of the Trademark Law a trademark may be licensed or sublicensed, whether exclusively or not, and for part of or the whole of Cyprus, provided the licence agreement is in writing and notified to the Registrar, who must also be informed of any change and/or termination.

Author: Ioannis Generalis


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