The term “Metaverse” was the talk of the town not long ago, and although it does not affect our daily lives (if at all) for the time being, you may have heard or read another uncommon term - “Web 3” or “Web 3.0” from similar discussions or articles concerning the Metaverse.

What is Web 3.0?

Web 3.0 is what the public in general are tentatively calling the next iteration of the internet. In brief, Web 1.0 is defined as a largely read only image and text-based internet, where users only read content on simple webpages whereas Web 2.0 is defined as the current internet we know, where we not only consume content but also interact through social media and create content which adds to the internet.

Whilst Web 3.0 does not exist yet, it is theoretically supposed to be (1) decentralised and leveraging the same technology of blockchains; (2) in some way powered or optimised by AI; (3) inclusive of metaverse spaces and experiences; and (4) actively integrating or using other blockchain-based technology which includes cryptocurrency, NFTs and the like.

Brand protection for NFTs and Web 3.0

In general, brand owners can adopt similar brand protection strategies for Web 3.0 as those applied to the Metaverse (and by extension NFTs). However, a transition from Web 2.0, which is largely regulated by Internet Corporation for Assigned Names and Numbers (“ICANN”) to a decentralised, blockchain-based Web 3.0 would require some extended steps to be taken by brand owners to protect their IPRs in anticipation of Web 3.0. For instance, it is anticipated that there will be new top-level domains for trademark owners to cover, such as .eth, .sol etc. Essentially, ICANN will not be able to stop such domains from coming into existence because they do not form part of the internet which ICANN regulates.

Brand protection steps that can be taken

The following are some simple steps that brands owners can take in the protection of their IPRs.

1. Registering your trademark in additional classes

A generally recommended first step is to register the brand’s trademarks under the appropriate classes to prevent unauthorised NFTs or other digital goods bearing the trademarks (albeit in their digital form) from being produced. The main class that brand owners typically aim to protect is Class 9 for downloadable digital goods. Other classes which brand owners can consider are Class 35 for the provision of online marketplaces (to buy and sell NFTs); Class 36 for the provision of financial services, including digital tokens; and Class 41 for providing non-downloadable electronic publications or games through the internet and others.

2. Claiming blockchain domain

It may be beneficial for brands to look into claiming their domains under the various larger or more popular blockchains such as Ethereum’s .eth, Solana’s .sol, .crypto, .nft or other top-level domains, now known as blockchain domains. It is still relatively inexpensive and would prevent the same thing as .com squatting from happening.

While the use cases for a blockchain domains such as .eth are relatively limited today, there may come a day where .eth or other blockchain domains are more popular than .com domains. It is worth noting that due to the current nature of the blockchain and how blockchain domains are claimed, it will likely be impossible to identify the owner of a blockchain domain.

3. Utilise additional NFT/Crypto-friendly safeguards

Given NFTs are immutable, meaning unlike a listing for counterfeit products online, they cannot be deleted from the blockchain. As such, there may be situations whereby a brand owner successfully takes action against someone producing NFTs bearing their trademark but is unable to delete the infringing copy. The owner can however hold on to the NFTs produced by the infringer indefinitely in a designated digital wallet within the brand owner’s control.

4. Regular monitoring and enforcement

Depending on resources, brand owners can monitor popular NFT platforms or marketplaces such as Opensea, Axie Marketplace or others for NFTs that infringe their trademarks. Some platforms have a takedown procedure whereby brand owners may submit an application to the marketplace or platform and have the infringing listing taken down. However, such action does not delete the existence of the NFT as mentioned above.

5. Building a presence in the Metaverse and Web 3.0

Given the underlying technology of NFTs as a ledger of ownership is likely here to stay, it may be worthwhile for brand owners to build a presence, even if minor, on popular Metaverse platforms. Brands such as Nike has established presence in the NFT space through its RTFKT acquisition in 2021 which in turn has brought in other brands and artists to the space such as Takeshi Murakami and more recently Rimowa through a collaboration. Further, while it has yet to be tested in the Malaysian Courts, the actual use of the brands in the Metaverse by the brand owners may assist in determining the issue of likelihood of confusion in cases of trademark infringement given the Trademarks Act 2019 requires the Courts to take into account all relevant factors including the circumstance of the use of the alleged infringing mark and the registered mark.

Hopefully with some of the above steps, brand owners may take a small and relatively inexpensive step towards future proofing and protecting their brands against the steady advancement of the Metaverse and the possible future of Web 3.0.

Marcus is an Associate at Wong Jin Nee & Teo. His practice predominantly focuses on brand protection and enforcement, licensing and franchising, as well as advertising compliance work.