Ineffective copyright protection in the metaverse

By Anushree Yewale and Krishi Shah, TMT Law Practice

Pooja Entertainment recently purchased virtual land, naming it Poojaverse, to promote its release of Bade Miyan Chote Miyan, the first Hindi film released in the metaverse. This unprecedented move proves film producers are tapping into and utilising new and evolving mediums and markets to maximise the viewership of their content.

The metaverse is the digital twin of the physical world, where people can create avatars, place them in virtual spaces, and manipulate them with virtual reality, augmented reality and artificial intelligence tools, effectively living a virtual life. To understand copyright issues in the metaverse, it is important to distinguish between an open and closed metaverse. An open metaverse consists of platforms where users can create new features such as buildings and marketplaces, such as Decentraland. A closed metaverse features platforms where users cannot create additional elements, and one company owns and manages all aspects of a platform such as the video game Fortnite.

As the metaverse is itself a software computer programme, it enjoys copyright protection under the Indian Copyright Act, 1957 (act). What remains to be ascertained and assessed is the copyright protection in the elements created in the metaverse. In answering this it can be said that in a closed metaverse, the platform owner owns all the elements within that platform since the users do not have autonomy to create any works/features. However, the challenge is to ascertain who owns the copyright in works created in an open metaverse – Whether it is the platform owners or the real-world creators, or whether through avatars or otherwise, or both may claim to be the owners of such works.

Anushree Yewale
Associate partner
TMT Law Practice

Under the act, unless there is any contract to the contrary limiting the use of the platform, the author of the works is the owner of the copyright. Accordingly, the real person or entity creating the work is to be regarded as the author of the work, and hence its owner. Logically, it is in the interests of open metaverse platform owners that the users are indeed the owners of the copyright of the works they create, thus making platform owners intermediaries only and absolving them of liability for any infringement.

To complicate matters further, in the metaverse, the boundaries of content exploitation are blurred as multiple rights of several persons are being exploited simultaneously. For example, a metaverse music concert may require a public performance licence as well as a reproduction licence, since the concert is being streamed in the real world albeit virtually. It may therefore be difficult to identify the rights to be granted for exploitation of content in the metaverse given the overlap of rights and use. If a third party shares any work generated outside the metaverse, that is in the real world, within the metaverse, without permission from the copyright owner, such exploitation would amount to copyright infringement. One such example of infringement was where luxury brand Hermès sued an artist for making and selling copies in the metaverse as NFTs.

Krishi Shah
TMT Law Practice

However, the position changes for works created within the metaverse. The identities of those claiming to be copyright owners and of the infringer are usually unknown, making it extremely difficult for real-world copyright owners to identify and pursue the individuals involved. Further, if copyright owners bring infringement cases where they are domiciled, any relief granted may be restricted within territorial boundaries and therefore ineffective. There is a need for jurisdictions to put in place international agreements and guidelines to regulate such matters.

Given the absence of boundaries in the metaverse, it is also difficult to determine whether any use of content without permission amounts to fair use. The extent and co-existence of multiple metaverses may lead to the real-world tests of fair use, that is the purpose and character of the work, the nature of the work, the portion of the work used and the effect on market value, losing their effect.

The challenges in the metaverse are to identify the owner of the copyright of the content in the metaverse, to ascertain the manner and extent of infringement and to know who the infringer is. It is also difficult to decide which forums should hear cases and the extent of the remedies to be granted to copyright owners. It is urgent that existing legal mechanisms be amended in order to protect copyright holders in the ever-expanding and unregulated virtual space that is the metaverse.

Anushree Yewale is an associate partner and Krishi Shah is an associate at TMT Law Practice.

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