Metaverset, a revolution with several legal challenges

Who owns what in the meta verse? And what law applies in these new immersive spaces? New technological frontiers, the metavers promised by Meta, Microsoft and others raise many legal issues. The first “cases” are already there. Earlier this year, when Hermès claimed he was the victim of intellectual property theft, Hermès filed a lawsuit in New York against an artist who had created NFTs – non-fungible tokens, digital goods that can be purchased in cryptocurrency, and whose property is based on blockchain – in the form of the Birkin bag, the star product of the famous luxury house.

Certainly, metavers do not come in a legal vacuum. On the contrary, between the European General Data Protection Regulation (GDPR) 2018 on personal data and the Digital Services Act-Digital Markets Act (DSA-DMA), the new Brussels legislation on Gafa, which enters into force in 2023, the legal framework governing platforms is even have been tightened in recent years. The difficulty becomes rather to adapt this law, knowing that case law will also be able to clarify the gray areas. For example, the Court of Cassation has long accepted that a theft may also relate to intangible property.

“In the meta-version, digital goods are sold on the basis of contracts. However, the principle of the contract stems from the Napoleon Code, recalls Eric Barbry, associate at the Racine firm in Paris. There will of course be scams and scams in the meta-verse. But again, the Godfrain law on computer fraud should suffice, as we have not changed it since 1988. “

Property rights are not always complete

However, there is something new. In the meta-verse, it is possible to buy and sell digital goods, these famous NFTs, and therefore to own – at least on paper. This is even the most important innovation of the metaverse: these new universes reintroduce the principle of property (and therefore rarity) into the infinite and almost free world of the web. Therefore, the question that arises is the question of the qualification of the digital object. In other words, “what do I buy and what do I sell?” sums up Eric Barbry.

If we have to be careful, it’s because, in the metaverse, “ownership is often not complete,” explains Claire Poirson, a partner at Bersay. In fact, it is necessary to distinguish NFT (the certificate that ensures authenticity) from the underlying (the digital good in question). However, in some cases, the buyer can acquire NFT, but without the underlying. “You have to be very vigilant, especially since NFTs play a lot on narcissistic reflexes. They create a sense of scarcity where there is none. It is speculative,” points out Emmanuel Ronco, partner at Eversheds Sutherland.

All these details are hidden away in the terms of use of large platforms like OpenSea (where NFTs are bought and sold). But also and above all in “smart contracts”, the document that the internet user signs during the transaction. In these contracts, for example, the platform can secure a lifetime operating license, which means that the buyer is not the full owner.

“It’s like in art photography: you can buy a copy knowing that the artist has the right to redo the prints,” explains Claire Poirson. In the case of resale of NFT, the contract may also include a commission (resale right) to pay the artist behind the digital work. And these contracts even set the rules for inheritance in case of divorce or death.

An avatar victim of bullying

In addition to classical property rights, the meta-verse also raises questions about intellectual property rights. “We can do NFTs on anything in the public domain,” explains Eric Barbry. On the other hand, digital goods that integrate intellectual property will fall under this regime. In the United States, it is the debate that opposes, for example, the Miramax studies to Quentin Tarantino. In late 2021, the studios filed a complaint against the director, who wanted to create NFTs … based on seven scenes from the handwritten script of pulp fiction not used in the film.

Finally, the meta-verse also raises questions about criminal law. Who is responsible when an avatar insults, harasses or even commits sexual intercourse with another avatar? At present, French law says nothing on the subject. “Pending specific regulation, we will reason analogously, as is often the case in law,” concludes Emmanuel Ronco. That is, by trusting … in the very real world.

>> Decodings, key figures, definitions … Discover Echoes of metaverset : The newsletter that will answer all your questions> Sign up

Leave a Comment