This article has been co-authored by Claire Keating, principal at Marks & Clerk.
‘Metaverse’ has been quite the buzzword in recent years, and generally brings to mind images of quirky digital wearables, collectibles, and innovative art pieces which defy all concept of real world physics.
In this dawn of Web3, similar to the early tech years when computers and other hardware were often prohibitively expensive, these virtual goods are often sold for mind-boggling sums of money which make most consumers hesitant to dip their toes into the metaphorical
metaverse pool. After all, most consumers would not be real-world art collectors and indeed are unfamiliar with the concept of owning virtual goods as opposed to their tangible physical counterparts, and it would understandably take some time to normalise
the practice of owning virtual goods, art and beyond.
Virtual experiences and services provided within the metaverse have been even slower to catch on, but
Fidelity International’s “Metaverse Campus” gives us a sneak peek as to what this could look like, and more importantly how this could be the first step towards the wider public embracing the metaverse as part of everyday life.
Based in Decentraland, one of the largest metaverse platforms, this campus serves as the gateway to interactive experiences centred around educating consumers to make smarter financial decisions. Users receive rewards such as limited edition NFTs and digital
collectibles. For example, users solving financial dilemmas in the ‘Game of Life Theatre’, are granted access to “Catopolis” where exclusive NFTs capturing the artwork of children from a school in Stratford can be admired.
As the metaverse becomes increasingly popular and accessible, there is clearly value for businesses to move with their audience into this new frontier. In terms of consumer attraction, the financial services sector is already well placed to move into the
metaverse – as financial and banking services are almost universally required and used, these institutions are likely to have an easier time of enticing their consumers into the metaverse. For example, banks have already proven successful in their first, and
arguably more difficult, transition from physical to online banking, so the tackling the metaverse would seem like the logical next step.
In recent years, consumers have increasingly sought memorable experiences beyond those which are merely transactional, as proven by the rise in challenger banks and fintech start-ups, whose offerings range from innovative SME loan structures to using gamification
to help customers manage their budgets.
By offering a chance for consumers to engage and gain rewards on top of standard banking services, banks have an opportunity to accelerate consumer acceptance of the metaverse. It appears that the days of high street banking may soon be behind us - it seems
only a matter of time before we will be walking into virtual banks and interacting with virtual employees and machines for all our banking needs.
The IP battles being fought in the metaverse cannot escape mention, and most would be familiar with the now-famous trade mark infringement case brought by Hermes against the artist Mason Rothschild for selling “Metabirkins”.
Cases like this are proving to be key in showing that trade marks covering physical goods are sufficient to protect the owners’ brands from infringement in the virtual world. The financial services sector is unlikely to face the same issues, since it would
not be a stretch to assume that ‘virtual’ services are a natural extension of the online services already offered.
Admittedly, many questions remain, particularly in terms of jurisdiction – trademarks are a territorial right, which places them at odds to the concept of the metaverse, which by definition does not physically exist anywhere. By contrast to online services,
which can be provided through country-specific websites or targeted at consumers in certain territories, such features are absent in the metaverse. This means that in theory, a trademark used in the metaverse could infringe trademarks in almost any country
worldwide, even where that trademark is well established in its home territory.
For any business, a new way of trading presents new opportunities, but where those opportunities exist in an entirely new environment, its legal framework will not be entirely clear. Given that financial services institutions are risk-averse by nature, any
expansion into the metaverse would need to be particularly carefully undertaken, and the possibility of infringing a third party trademark in a country where you never actually plan to trade could pose a significant barrier to entry.