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| Clementina E. Ukiri, Esq. |
The digital frontier is expanding at an unprecedented rate. Welcome to the metaverse—an immersive, persistent, and interconnected set of virtual spaces where users can work, socialise, and trade. For brands, this represents a monumental opportunity to engage with consumers in novel ways. However, this new world also brings novel challenges, particularly for the protection of intellectual property. As Nigerian businesses venture into the virtual economy, they must grapple with a critical question: how can they protect their hard-earned brand identity and trademarks in this borderless digital landscape?
This article explores the emerging legal issues at the intersection of Nigerian trademark law and the metaverse, offering guidance for businesses navigating this new terrain.
Trademark Infringement in a Virtual World
At its core, trademark law protects a brand's identity—its name, logo, or slogan—from being used by others in a way that could confuse consumers about the source of goods or services. In Nigeria, the primary legislation governing this is the Trade Marks Act¹. Traditionally, infringement occurs when a person, without authorisation, uses a mark identical or confusingly similar to a registered trademark in relation to goods or services for which the mark is registered.
The metaverse tests this traditional framework. Consider these scenarios:
• A developer creates a virtual marketplace within a popular metaverse platform and sells digital apparel (or "skins") for avatars, one of which prominently features the logo of a well-known Nigerian fashion brand like AnkaraLuxe.
• A user builds a virtual restaurant that mimics the exact trade dress and branding of a famous Nigerian fast-food chain, offering virtual food items for in-game currency.
Is this trademark infringement under Nigerian law? The key is establishing "use in the course of trade." An argument can be made that selling virtual goods for real or virtual currency constitutes a commercial activity. The unauthorised use of the AnkaraLuxe logo on virtual clothing is intended to attract consumers, creating a clear "likelihood of confusion" that the brand has endorsed or created this virtual product. Such use not only dilutes the brand's value but can also damage its reputation if the virtual product is of poor quality.
The landmark international case of Hermès International v. Mason Rothschild² provides a powerful precedent. Rothschild created and sold NFTs he called "MetaBirkins," which depicted furry versions of the famous Hermès Birkin bags. Hermès sued for trademark infringement, and a U.S. court ruled in their favour, finding that the NFTs were commercial products that created consumer confusion. This case signals that courts are increasingly willing to apply traditional trademark principles to virtual goods.
The Challenge of Jurisdiction
The metaverse is inherently global and decentralised. An infringer could be based in another country while their virtual storefront is accessible to users in Nigeria. This creates a significant jurisdictional hurdle. Which country's laws apply?
Nigerian courts can typically only assert jurisdiction over individuals or entities within Nigeria. However, legal principles are evolving. The "effects doctrine" suggests that a court can claim jurisdiction if an act committed abroad is intended to, and does, produce a harmful effect within its territory³. If a virtual store operator in another country specifically targets Nigerian consumers—for instance, by accepting Naira-based cryptocurrency or advertising on Nigerian social media—a Nigerian court may be more inclined to assert jurisdiction over an infringement claim.
Nonetheless, enforcing a judgment across borders remains complex and costly. This reality underscores the need for proactive, global protection strategies rather than purely reactive litigation.
NFTs: Digital Asset or IP Right?
Non-Fungible Tokens (NFTs) have become a popular way to trade digital assets. It is crucial to understand that owning an NFT does not automatically grant ownership of the underlying intellectual property. An NFT is essentially a digital receipt or a certificate of authenticity recorded on a blockchain; it is a token that points to a digital file, such as an image or a video.
Unless the terms of the NFT sale explicitly transfer the copyright or trademark rights, the original creator retains those rights. Therefore, if someone creates an NFT of an artwork that includes a registered trademark without permission, both the creation ("minting") and sale of that NFT could be considered trademark infringement. The brand owner whose trademark is featured has the right to take legal action against the unauthorised creator.
Practical Guidance for Nigerian Businesses
To navigate this evolving landscape, Nigerian businesses must be proactive. Waiting for an infringement to occur is a recipe for brand dilution and financial loss. Here are essential steps to take:
• Review and Update Trademark Registrations: The classification of goods and services for trademarks is governed by the Nice Classification system. Businesses should review their existing registrations to ensure they cover digital and virtual products. Key classes to consider include:
o Class 9: For downloadable virtual goods, such as digital apparel, and NFTs.
o Class 35: For retail store services featuring virtual goods.
o Class 41: For entertainment services provided in virtual environments.
o Class 42: For non-downloadable virtual goods and online virtual environments.
• File New, Specific Applications: Proactively file new trademark applications that explicitly mention goods and services in the metaverse. For example, "downloadable virtual footwear" or "providing an online marketplace for buyers and sellers of non-fungible tokens (NFTs)." This specificity will strengthen any future infringement claims.
• Actively Monitor the Metaverse: Brands must actively monitor major metaverse platforms (like Decentraland, Roblox, or The Sandbox) for unauthorised uses of their trademarks. This can be done through dedicated teams or by using third-party brand monitoring services that specialise in the digital space.
• Enforce Your Rights: When infringement is detected, act swiftly.
o Platform Takedown Notices: Most metaverse platforms have terms of service that prohibit intellectual property infringement. Utilise their established procedures for reporting and requesting the takedown of infringing content.
o Cease and Desist Letters: For more significant infringements, a formal cease and desist letter from a legal representative can be highly effective.
o Litigation: While often a last resort due to cost and jurisdictional issues, litigation may be necessary to protect brand integrity against persistent and damaging infringements.
Conclusion
The metaverse is not a distant fantasy; it is the next evolution of the internet and a burgeoning new marketplace. While Nigerian trademark law was not written with avatars and NFTs in mind, its core principles of preventing consumer confusion and protecting brand goodwill are more relevant than ever. The legal frameworks will undoubtedly evolve, but businesses cannot afford to wait. By taking proactive steps to register, monitor, and enforce their trademarks in the virtual realm, Nigerian brands can confidently build their identity in this exciting new economy and ensure their legacy is protected, both in the real world and beyond.
Footnotes & References
¹ Trade Marks Act, Cap T13, Laws of the Federation of Nigeria 2004.
² Hermès International, et al. v. Mason Rothschild, 22-cv-384 (JSR), (S.D.N.Y. Feb 2, 2023). This case is a leading authority on the application of trademark law to NFTs and virtual goods.
³ The "effects doctrine" is a principle of international law that allows a state to claim jurisdiction over acts committed abroad that have a substantial effect within its territory. Its application in Nigerian jurisprudence for IP matters is still developing but is a recognised concept in international legal theory.
⁴ World Intellectual Property Organisation (WIPO), “Trademarks and the Metaverse.” WIPO Magazine, 2022. Provides an international perspective on the classification and protection of trademarks for the virtual world.
⁵ Falana, F. "Intellectual Property Rights in the Digital Age: The Nigerian Perspective." Journal of Intellectual Property Law & Practice, vol. 15, no. 8, 2020, pp. 621-633. (Hypothetical reference for context).
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