【Expert’s Commentary of the Commercial Times】Legal Concerns to the Metaverse

February 21, 2022

The men’s final of the Australia Open this year made tennis fans all over the world buzzing with excitement. Rafael Nadal showed his strong mental strength and came back from 2 games down to take 3 games in a row. By beating young-talented Russian player Medvedev, Nadal not only won another Grand Sl

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By Yow-Lun Su, Senior Partner of Formosan Brothers, Attorneys-at-Law

The men’s final of the Australia Open this year made tennis fans all over the world buzzing with excitement. Rafael Nadal showed his strong mental strength and came back from 2 games down to take 3 games in a row. By beating young-talented Russian player Medvedev, Nadal not only won another Grand Slam title but also took the lead in the numbers with the 21st Grand Slam title. In addition to making the fans buy the tickets to watch the match, Australia Open unprecedentedly brought the games into the metaverse. Fans all over the world can watch the matches, play the game in the tennis tournament through virtual reality, and buy NFT memorabilia collection.  
The metaverse became popular since the second half of 2021. Some people think that the metaverse simply means virtual reality in other words, others say that the metaverse is similar to the augmented reality or virtual reality presented by the video game, and others believe that it is similar to the fusion of the real and virtual worlds depicted in the movie “Ready Player One.” If the final goal of the metaverse is to move the real world to the virtual world and make all the things in the real world can be done in the metaverse, can the law in the real world be applicable in the metaverse directly? It seems that this is not quite the case.
You can buy cars, land, build a house in the metaverse, or even open a store and start a business. However, the basic concept of “ownership” in the real world hardly seems to exist in the metaverse. If you bought a Tesla in the real world, you may own the title of the car and park the car in your garage. But, while you can buy a Tesla in the metaverse and enjoy your ride in the metaverse as much as you want, once you take off your virtual reality headset to back to the real world, your Tesla is still in the metaverse and can never be in your garage. Everything in the metaverse is composed of computer programs, including your Tesla in the metaverse. Therefore, when you buy a Tesla in the metaverse, you may not have the title you have in the real world. Instead, what you get is a right or license to access the computer program and allow you to use that Tesla or set of computer programs in the metaverse.
Purchase of land is also possible in the metaverse. The virtual land on Decentraland can be sold at the price of 2.43 million USD, and the virtual land on Sandbox can be sold for up to 4.3 million USD. These virtual lands are all NFT (Non-Fungible Token). NFTs of these lands are analogous to the title of the land, proving that you own the virtual land in a certain metaverse. However, the virtual land is composed of computer programs. Thus, what you get may be the right to access this computer program rather than the ownership of the virtual land.
There may be more than one metaverse. If metaverse A which I participated in was acquired by metaverse B, is it possible for me to take all my virtual land, Tesla, stores, and goods to metaverse C? If the answer is no, can I claim for a payment paid by B metaverse in order to acquire all NFT land or other virtual assets which I “owned” in metaverse A? However, if I did not actually have the ownership of these assets, what kind of rights may I claim? Is it possible for me to claim that metaverse B cannot utilize these virtual assets without my authorization? These questions may not be answered until the metaverse is more developed.
Intellectual property rights are also another important topic. If you already started a business in the metaverse, yet the name or the design of the commodities you used was like the trademark or copyright that someone else already has in the real world, you still run the risk of infringement and will not be exempt from liability just because it takes place in the metaverse. Besides, if the A.I. (Artificial Intelligence) residents of the metaverse may create new work or invention in the metaverse, is this work or invention the creation of “humans” or A.I.? At present, the mainstream opinion around the world still holds that only “human” creations can enjoy copyright or patent protection, but not A.I. creations. Along with the development of the metaverse or the technology of A.I., there will be a challenge to the current legal system of the right of intellectual property.
May the dispute raised in the metaverse be solved in the real world court? Of course, it can be. Nevertheless, the metaverse seems like a borderless realm. The first problem to solve is which country or city in the real world should be the venue for disputes in this virtual realm and which country's laws should be used to resolve them. Additionally, how to present the evidence and documents for the disputes that happened in the virtual world before the judge in the real world to conduct an oral argument will be a real headache for attorneys. Perhaps the disputes that happened in the metaverse may be solved in the metaverse one day. Attorneys, judges, and the parties would wear the virtual reality headsets and take on virtual characters' roles to attack and defend in the court of the metaverse.
The metaverse is an emerging concept. With it, the wave of technology will bring new life experiences and create new legal disputes and criminal practices that will continue to impact the real world legal system.

(This article was published in the Expert’s Commentary Column of the Commercial Times:https://view.ctee.com.tw/processing/37105.html