UAE authorities are investigating how to monitor the ‘dark side’ of the metaverse

Trademark, patent and intellectual property issues need proper legislation to decide legal disputes in the virtual world, experts said at a conference in Dubai.

Businesses should ensure their brands are protected in the new virtual world and ensure their unique assets are protected in the metaverse, a senior prosecutor said at the 12th

Ali bin Khatam, Senior Advocate General at Dubai Public Prosecution, said protecting intellectual property in the metaverse is “not an easy subject from a legal point of view”.

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Metaverse has a dark side and it needs regulation, legislation and enforcement procedures – like how to arrest a person in virtual reality

Brig Jassim Al Antali, Abu Dhabi Police Academy

“The Metaverse raises questions such as who protects the brands in virtual reality and whether companies need to register their brands in the Metaverse. We need laws and solutions to these problems,” he added.

“Right now, it’s easy to counterfeit items in Metaverse by copying an existing mark in real life in Metaverse.

“The most difficult situation is when there is a trademark in a certain virtual reality and someone copies it in another virtual reality, we need to have laws and protections for this problem.”

The landmark “MetaBirkin” case

A New York court clarified the matter earlier this month when luxury brand Hermes International won a lawsuit against the digital artist behind the non-fungible token “MetaBirkin.”

In the case – perhaps the first to consider how NFTs should be viewed through the lens of IP law – a federal jury in Manhattan ruled that Mason Rothschild’s sale of the NFTs violated Hermes’ rights to the “Birkin” trademark, reported Bloomberg.

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Physical Birkin bags can range in price from $12,000 to nearly $200,000. Rothschild initially sold the NFTs for about $450 each, but their resale value rose to tens of thousands of dollars.

A blockchain expert testified during the trial that Rothschild produced around 55.2 Ethereum tokens — worth around $87,700 today.

The nine-member jury awarded Hermes $133,000 in damages.

Mr bin Khatam said prosecutors were having trouble deciding jurisdiction over a criminal or civil trial taking place in the Metaverse.

“We do not know which jurisdiction to apply if the crime took place in the United Arab Emirates or in another country. This causes laws to become invalid,” he said.

He said cooperation between countries through an international monitoring body like Interpol would help provide some certainty about being able to adjudicate cases.

Brig Jassim Al Antali of the Abu Dhabi Police Academy said the increasing use of the metaverse meant proper legal mechanisms were needed to resolve any issues that arose.

“Metaverse has a dark side and it needs regulation, legislation and enforcement procedures like how to arrest a person in virtual reality because in case of a dispute we don’t know where the person is,” said Brig Al Antali .

“We need security, legal and judicial mechanisms and train law enforcement to fight crime in virtual reality.”

Counterfeit items recycled

Ahmed Musabih, director-general of Dubai Customs, said intellectual property rights protection will spur growth in the UAE’s non-oil foreign trade, which will reach Dh2.2 trillion in 2022 – a rise of more than 17 percent year-on-year – year gains in importance.

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“Dubai Customs handled around 400 intellectual property disputes involving 15 million counterfeit items with a street value of Dh110 million,” Mr Musabih said.

Around 173,000 counterfeit items – such as luxury bags, mobile phones and watches – were destroyed and recycled by the authorities last year.

The UAE updated their legislation and increased penalties in 2021 to tackle counterfeit items.

Fines for IP crimes range from Dh100,000 to Dh1 million – up from the previous range of Dh5,000 to Dh10,000.

Updated February 22, 2023 4:51 am