Legal Issues to Watch With the Metaverse for Businesses That Don’t Want to Go There

Friday, June 24th, 2022

Do you plan to take your business into the metaverse? Even if you don’t, it presents legal issues you should think about.

Let’s first look at where it stands. There is no singular metaverse, and it’s under construction.

There isn’t even agreement as to what a metaverse is. I consider it to be a persistent, multi-person, online 3D virtual world, typically experienced wearing virtual-reality goggles, where an individual can carry out, often through an avatar, many activities that can be done in the real world (and some that can’t).

From a business perspective, it could become a place where you do work on a virtual computer, hold meetings, network, make sales pitches and deals, attend trade shows and conferences, and deliver digital services and content.

Several companies are building their own walled-garden metaverses. Facebook has attracted the most attention by changing its name to “Meta” and promoting its metaverse development. Microsoft is working on a metaverse that mostly builds on its Teams video conferencing. Virtual worlds called “The Sandbox” and “Decentraland” have gotten some traction.

These will be separate virtual worlds for a long time. It is a huge computing challenge to stitch these worlds together so that a person’s avatar could move between them. The big players haven’t tried to make that happen.

Business-oriented metaverses have far to go. So far, the main use is virtual meetings with some or all participants in legless avatar form.

While business metaverses are still in infancy, here is my brain-dump future-cast of the most important legal issues concerning them that a business should consider even if it won’t be setting up shop there:

Intellectual Property Rights

Your company’s trademarks – distinctive business, product, and service names, and slogans – could be infringed upon in metaverses by other businesses. If you don’t detect and stop that, it can hurt and eventually kill your trademarks. Your company might want to seek trademark registrations to cover its trademarks for possible future business use in metaverses.

Also watch out for counterfeiting, such as selling virtual goods in a metaverse that use the distinctive designs and brand names of popular products or pretending to be well-known businesses.

Personality Rights

A person may prohibit others from using that person’s name or likeness for a commercial purpose without permission. I expect metaverses to offer the equivalent of the Twitter blue checkmark – a verified online identity. You might want prominent people in your company to get verified identities in popular metaverses to preempt bad actors from stealing those identities to engage in impersonation or mockery.

Employment Issues

Even if your business isn’t in a metaverse, your employees might interact there, just as they do now in social media and texting. What if one of your employees claims he or she was harassed or discriminated against in a metaverse by another employee? As an employer, your company probably has a duty to investigate and act.

Are in-house or outside recruiters representing your company active in any metaverse? If so, are they complying with employment law, such as discrimination avoidance?

What if a person with a disability applies for a job or has a job with your company, and the person contends he or she cannot come to work due to the disability? Might your company have a duty to permit working virtually, perhaps through a metaverse, in order to provide a “reasonable accommodation” under the Americans with Disabilities Act or analogous state law?

Does your company have employees sign non-competes or agreements to not solicit your customers after leaving employment? Are those agreements written in a way to account for metaverse business activity?

Are your salespeople active in a metaverse? If so, do their activities comply with your company’s marketing guidelines, such ones addressing brand usage and avoiding false advertising?

Data Security

Are your employees doing anything on a metaverse that might leak your company’s confidential information?

You will be able to connect apps to a metaverse, either those made by the metaverse operator or perhaps popular third-party apps. For example, I expect a Google metaverse will integrate with Google Docs, Sheets, and Slides.
Beware of the risk that any information in integrated apps might flow to the metaverse operator or perhaps other metaverse participants. Also, if an app allows you to login with your metaverse ID and password, just like you can log in to some apps with your Facebook or Google ID, that could cause information about your metaverse activities to be fed to such apps.

Evolving cyberspace continuously presents new business challenges, including legal ones. The key is to stay current on the technology and think imaginatively about its opportunities and challenges.

Written on June 22, 2022

by John B. Farmer

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