Fashion in the Metaverse: How NFTs are Changing the Fashion Industry | Caldwell Intellectual Property Law

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Internet fashion versus the metaverse

The Internet impacts many areas of our lives. Fashion is certainly not immune to such an impact and well suited to this medium – information such as what we wear, how we wear it and how to buy it is available to everyone in a plethora of electronic appliances.

The internet, however, is evolving. The Internet remains a medium to search for information, to communicate with anyone else in the world and to interact on social media platforms such as Facebook®, Instagram®. With the advent of the metaverse, however, these interactions are becoming more immersive, enhancing digital interactions with other people on the Internet. This is made possible by a combination of several technological elements, including virtual reality and augmented reality where users “live” in a digital universe. In the metaverse, users are part of the action.

The fashion industry is also evolving in the metaverse. For example, anyone can sit down at their computer, go to a website, and find an item of clothing to buy – this is an example of a user interacting on the Internet. Now suppose you can try on this item of clothing before buying it. In the metaverse, it is possible for a user to “try before you buy” an item of clothing in a digital showroom. Users can get a 360 degree view of a product. They can zoom in and look at every detail of this garment. Consumers can now even virtually try on items by dragging one or more products over photos of themselves. In other words, in the metaverse, one may be required to bring the dressing room right into their home and have the same look and feel experience as in a physical store. Nowhere is the intersection of fashion and the metaverse more apparent than in the current explosion of fashion-related NFTs.

NFTs in fashion

At their most basic level, NFTs or “non-fungible tokens” are cryptographic tokens that are stored on a blockchain. These tokens allow someone to buy, sell or trade real objects such as works of art or real estate. Please refer to my previous article for fundamental information on NFTs. NFTs are particularly suitable when they symbolize collectibles and unique items. In the fashion industry, NFTs now bring a new level of exclusivity and an opportunity to transform digital designs and collections into very rare, precious, luxurious and unique collectibles.

For example, Burberry has partnered with Mythical Games to launch a collection of non-fungible tokens (NFTs) in their flagship title, Blankos Block Party¹. Collaborating with Mythical Games’ Blankos Block Party on a shark, known as Blanko, which can be bought, upgraded and sold in-game, the brand jumped into the digital space after the success of its own game , B Bounce², launched in 2019. .

At the end of August 2021, the Milan-based luxury fashion brand Dolce & Gabbana launched its own collection of NFTs on the Polygon blockchain (CRYPTO:MATIC). Appointed Collezione Genesi³ The 9-piece, Domenico Dolce and Stefano Gabbana have personally designed a one-of-a-kind collection exclusively for UNXD. It features museum-quality objects that are entirely handcrafted through High Fashion (women), Upper Sartoria (men), and Upper Gioielleria (fine jewelry).

In another example, a “Baby Birkin” NFT, which was an animation of a growing baby in a Hermès Birkin bag, recently sold at a Basic.Space auction for the equivalent of $23,500⁴. It is important to note that Hermés, owner of the Birkin bag brand, was not involved in the issuance of the NFT and sent a cease and desist letter to the creator of the NFT. Recently, Hermès filed a lawsuit in the court for the Southern District of New York for trademark infringement and dilution. Hermès claims that the artist, Mason Rothchild, was trying to rip off the famous Birkin brand from Hermès by adding the generic prefix “meta” and calling the NFT “Metabirkin”.

From creating their own fashionable games in the metaverse, these fashion houses are establishing a new world of engagement with digital experience with users. Memorable items can increase customer loyalty. Customers can capture, exchange, and cherish unique experiences and unique moments in time, which all of these companies could use to establish a much more permanent connection with their customers.

Legal framework

Any fashion house or anyone wishing to launch an NFT should be aware of the potential issues that can arise regarding NFTs. For example, for an issuer, intellectual property rights may be involved, such as copyright in the design of a garment. Typically, the issuer retains copyright and other intellectual property rights, and the buyer receives a right to use the underlying asset. The issuer may license the rights to use the NFT rather than transfer ownership of the intellectual property. The issuer should exercise caution in licensing through the sale and subsequent transfer of the NFT. The issuer may prohibit any modification or exploitation of the asset subject to an NFT.

Buyers should be aware of the conditions contained in the “smart contract” which are the collection of code and data that effectively operate as self-executing programs that can stipulate the required conditions of the NFT. The buyer should be aware of the rights and obligations acquired, in particular if they may have an impact on the current or future value of the NFT and the underlying asset.

In terms of trademarks, fashion houses that have or seek to have a presence in the Metaverse must register their trademarks and service marks with the USPTO and foreign offices. A physical and metaverse strategy can be of the utmost importance to protect proprietary rights and avoid issues that can affect a brand, such as brand dilution.

Who owns the rights to an image residing in the metaverse? In December 2020, the USPTO requested comments on a change to what constituted the statutory subject matter of a design patent, as the design must be for a manufactured item ⁵. The PTO requested comment since “some new and emerging technologies, such as projections, holographic imagery, or virtual/augmented reality, do not require a physical display screen or other tangible item to be viewable” . Advice on this subject could be published.

Conclusion

We are on the threshold of a new digital revolution. NFTs and the metaverse open up new worlds of economic opportunity and risk. The fashion industry is at the forefront of many of these new developments.

1. https://www.burberryplc.com/en/news/brand/2021/Blankos.html

2. https://us.burberry.com/b-bounce/

3. https://unxd.com/drops/collezione-genesi-618a389640e4bb41a264c102

4. https://www-voguebusiness-com.cdn.ampproject.org/c/s/www.voguebusiness.com/technology/the-baby-birkin-nft-and-the-legal-scrutiny-on-digital- mode/amp

5. https://www.govinfo.gov/content/pkg/FR-2020-12-21/pdf/2020-28110.pdf

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