Where’s the IP in Meta’s metaverse?

Facebook’s shift to the metaverse has jump-started a new tech eco-system—and IP must change to keep up, says Ed White of Clarivate.

If you were looking, by June 2020, you would have spotted that Facebook, as it was then, was fundamentally changing its research strategy and technical focus (figure 1).

Since the acquisition of start-up Oculus VR in 2014 for $2 billion, the company’s emphasis on virtual, augmented and mixed reality patent activity had steadily climbed until for the first time in 2018, it outnumbered annual filings focused on social media technology.

On October 28, 2021, 16 months later, the company’s founder Mark Zuckerberg announced a switch in focus to development of the metaverse and renamed the company Meta. On the same day, it filed a trademark registration for the new brand at the US Patent and Trademark Office.

With this announcement, intense discussion about the nature of this shift, the fundamentals of the technology, the basic question of what is the metaverse, and the role of intellectual property in an even more online world all are naturally asked.

Figure 1: Inventions by Meta (source: Derwent World Patents Index from Clarivate)

Defining the metaverse

At a fundamental level, metaverse-esque technology has been around since the 1950s and 1960s as head-up displays (HUDs) in military aircraft. By overlaying information and parameters in the pilots’ line of sight, the safety of low-visibility or low altitude flying was fundamentally enhanced, as pilots no longer had to adjust their vision from instruments to the outside world.

In essence, the metaverse is a catch all term for the integration of additional information over reality (augmented or mixed reality technologies) or an entirely virtual world you can navigate and explore (virtual reality). The augmented or virtual world occurs right in front of your vision via a head mounted display, alongside additional audio or haptic sensory feedback via worn devices.

Following a common development pathway with much of computing innovation, VR technology found early adoption and commercialisation in the gaming space. The creation of entirely virtual worlds which players can explore and, in case of Massively Multiplayer Online (MMO) games, interact with each other, is now common.

The metaverse is the extension of this idea to a far more ambitious environment—everyday interactions across the board. In some ways, it can be thought of as a natural development of how people access the online world. At first via a computer, now via a smartphone, the metaverse would essentially see the deletion of the phone.

The level of immersion corresponds to the terminology in use: a HUD-like overlay being augmented reality; the ability to interact with both the virtual and the physical simultaneously being mixed reality; and entirely artificial environments, virtual reality.

Figure 2: Trends in metaverse technologies (source: Derwent World Patents Index from Clarivate)

When Clarivate looks at the innovation trends within these technologies (figure 2), the current trend is a fundamental shift from the gaming world to the professional. This “expertise at a distance” is seeing intense development pressure, in several industries where physical separation is either desirable for safety reasons, or it provides a benefit of access.

For example, education, training and simulation support in a sandbox environment, operating industrial equipment from the safety of a control room, performing surgery from another continent or indeed any remote/robotic manipulation that still requires a skilled human operator.

Underlying the development of the metaverse is significant hardware and software technical development. From:

• the optical devices needed to safely and comfortably display an image close to the eye;
• the fundamentals of connectivity and networking to access a persistent online environment;
• the way a small, wearable piece of equipment is powered, packaged, charged and cooled, and is comfortable to wear;
• through to the image and video processing and generation technologies needed to make an extended reality world come to life.

These technologies are occurring in patent applications at a rapid pace, and through our usual innovation observatory techniques, we can map changes in emphasis and problem solving in these enabling technologies. Ultimately, the metaverse is a further outcome of already in-flight technology convergence of display and connectivity technology.

But this underlying enablement gives rise to a new connectivity commercial universe. Just as the development of the internet in the 1990s, and the mobile internet in the 2000s, completely changed how commerce and interaction occurs in our society—changing the access point and consumer experience of the online world to light, medium and full immersion will produce a further round of business and commercial change.

The blurring of assets and property

For the technology supporting the way users and consumers access the metaverse, it does appear traditional patent assets will remain fundamental. The growth projections we see in the development of metaverse access all follow typical s-curve innovation patterns, with expected transitions from current to future platforms, use cases and solutions.

It is likely that the same interoperability requirements that exist for the internet and mobile communication—standards, essentially—will also emerge: a siloed virtual world along the lines of Apple vs Android is possible, but in early planning undesirable. That means that metaverse protocols are likely to emerge, and as currently, there will be patent assets which underpin those standards.

Where IP theory and strategy is likely to be more greatly impacted is the creation, ownership and management of virtual items, artifacts and belongings. Designed spaces featuring exciting vistas or fantastical environments, skins and virtual clothing, the purchase of these items and the far-easier copying of them in an entirely coded environment will be top of mind for companies as they look to how their business models can pivot.

If I were to buy a pair of Nike-designed and branded virtual shoes, how does Nike protect the value and uniqueness of that design in a virtual world? Here, we begin to see the applicability of technologies such as non-fungible tokens (NFTs) and an application of blockchain technology, that maintain the provenance of items.

While gamers today can buy and, in some cases, swap virtual items that cost real-world currency, these marketplaces exist within the contractual environment of that game, or the wider gaming platform. They have restraint and remedies to abuse built into those contracts—such as the removal of access or user privileges.

In a metaverse, where the virtual world is a mirror or parallel to the wider economy, or indeed becomes a major part of the economy itself, these restrictions become more problematic or impossible to enforce and therefore the value of assets and their protection likely needs to become much more closely associated with the artifact itself.

Similarly, the emergence of domains and digital brands we have seen over the past 25 years will likely go through a further round of evolution as they shift to virtual “real” estate. A Hermes shop, a BMW showroom, a Walmart supermarket—control and access rights to these spaces today rests on the laws of the physical jurisdiction in which they sit.

If brand theft occurs in a virtual environment, enabled by the removal of traditional physical logistics of materials and distribution and the lack of customs and borders, it raises questions of jurisdiction and enforcement location. There are questions of whether copyright and trademark law (the assumed basis on which virtual artifacts will sit) still provide the required protection when these are border-bound rights, in an environment without borders.

How this happens in an entirely virtual world is a good question, and the definition of location and law quite fundamental, and opens a discussion of whether entirely new intellectual property asset classes are either needed or desirable.

Your digital twin, and who controls it

Lastly, one of the biggest question surrounds data, data privacy and online safety. Clearly, this is already acute in the simpler mobile connected world and we have seen development of new statutes (eg, General Data Protection Regulation) that shift the balance of control over data towards people. When your representation in the metaverse is all-encompassing, who you are, who you meet and who has access to the information you leave behind as you immerse in the metaverse is going to be even more critical than today.

Zuckerberg talks in his vision for the metaverse of building privacy and safety in from day one, but to a degree the development genie is already out of the bottle—the patent information we track shows that the technical underpinnings of the metaverse is already racing ahead.

Leaving the definition of rights, assets and responsibilities to the drafters of commercial contracts—essentially how the metaverse in a gaming construct occurs today—would on the face of it feel undesirable.

As the metaverse comes to life over the next five or 10 years, as we swap our phones for smartglasses and wearable computers, and as the commerce and economics of an ever-more virtual economy become reality, IP and the wider laws of property ownership will need to evolve. As is now tradition, statute and regulation faces a race against technology.

Ed White is chief analyst and VP, IP and innovation research at Clarivate. He can be contacted at: ed.white@clarivate.com