Posted on March 30, 2023
The Metaverse as a borderless virtual world encompassing work, play, entertainment, and more, is the next evolution of the Internet as we know it. It’s a real opportunity to drive economic growth and bring its benefits to everyone, everywhere. With digitalization going forward, there’s no doubt that IP will be one of the key drivers in this field.
But what exactly are the IP issues that arise within the Metaverse?
This is what we recently explored at a panel on “A multitude of IP issues” as part of the Seventh Session of the WIPO Conversation – Intellectual Property and the Metaverse. There were over 3,000 registrants from more than 140 countries for the conference, and 450 showing up for the panel.
I’m thrilled to have been invited to join this all-star lineup:
- Moderator: Konstantinos Georgaras, Chief Executive Officer, Canadian Intellectual Property Office, Canada
- Raquel Xalabarder Plantada, Chair of Intellectual Property, Professor and Director of the Law and Political Science Department, Universitat Oberta de Catalunya, Spain
- Rasha Al-Ardah, Legal Counsel, Al-Tamimi & Associates Advocates and Legal Consultants, UAE
- Mitchell Adams, Senior Lecturer and LLB Course Director, Swinburne Law School, Australia
- Bastian Best, Patent Attorney, BESTPATENT, Germany
- Andres Guadamuz, Reader in Intellectual Property Law, University of Sussex., UK
- Jean-Marc Deltorn, Associate Professor, Center for International Intellectual Property Studies (CEIPI), France
- Jesse Wrensch, Michalsons Law Firm, South Africa
- Patricia Adjei, First Nations arts and culture director, Australia Council for the Arts, Australia
The panel’s task was to explore what the various intellectual property issues are that arise within the metaverse, and how these might be addressed through a combination of existing IP protections and new approaches to IP management. By considering these issues in a holistic manner, the goal of the panel was to provide a nuanced and well-rounded view of the role of IP in the metaverse, and help to identify key challenges and opportunities for innovation and economic growth in this space.
I took on the topic of patenting platforms, AI and software in the Metaverse. What follows is a reprint of my speaking notes:
Patenting platforms, AI and software in the Metaverse
Thank you very much for the opportunity to present on patents in the Metaverse, including platforms, AI and software. So, each of platforms, AI and software are huge topics in themselves, and I’ve given multi-day workshops on patenting AI alone, so bear with me that this 7-minute presentation can only give a very high-level overview of these topics.
But to give you a feeling of why patents are indeed relevant in the Metaverse, I went on Espacenet this morning and I searched for the term “Metaverse”. And there were 2,392 hits. So, roughly 2.5 thousand published patent documents which mention the Metaverse. That’s a lot of patent documents to consider when you’re trying to figure out if you have freedom-to-operate in this space, right? Not to mention the patents that don’t even mention the term “Metaverse” but still cover technologies applicable in this field, of course.
Now, I’d like to structure my presentation along two aspects of the Metaverse, or let’s think about them as layers. The first one being the platform layer, meaning the technical infrastructure on top of which the second layer runs, namely Metaverse applications. So, we have the platform layer and on top we have the application layer. And I will try to sketch out some unique challenges of patents on each of these two layers.
Patenting the platform layer
Now, on the platform layer, we can distinguish between the backend and the frontend.
On the backend, we’re basically talking about networked computer systems, including more traditional client/server architectures and communication protocols, but also things like distributed ledgers and the blockchain.
On the front end, we’re talking about user devices to access the Metaverse, including computers, smartphones and also things like virtual reality and augmented reality devices, smart glasses, heads-up displays, and even smart sensors and IoT devices.
Obtaining patents on the front end of the platform layer is actually relatively straight-forward in my experience, and the patent systems around the world are generally capable of dealing with these things properly, as far as the “hard” technical aspects of the devices are concerned. We’re basically talking about hardware innovations here.
On the other hand, obtaining patents gets more interesting on the backend of the platform layer, for a number of reasons:
Are patent offices ready for the really new technologies?
One reason is that, as soon as you’re thinking about innovating on the backend part, you will come into contact with filing patents for things like blockchain or DLT architectures, which are still relatively new for patent offices given the timelines we’re dealing with in the patent system. And the way how different patent offices around the world deal with these new technologies may differ from office to office. As one example, the European Patent Office has in my experience quite a stable patentability framework for tackling the technical aspects of blockchain, for example, but this might be different in other jurisdictions.
And this is a real challenge for patent applicants, because the Metaverse naturally executes on the Internet, or “in the cloud”, and it can basically execute anywhere, so you’re immediately faced with the challenge that today’s patent systems are territorial while the technical infrastructure of the Metaverse is truly global.
Beware of divided infringement!
And this then extends also to the enforcement side of patents, where issues like divided infringement come up immediately. What you need here as a patent applicant is a careful approach to drafting your patents so that they can actually be infringed in such a globally networked scenario. One of the mistakes I see all the time is that some applicants tend to focus too much on the backend side and later have trouble enforcing their patents because you just don’t know where your competitors’ servers are located. So one thing I’m always looking into when I’m drafting these types of patents is to try to also cover the functionality which happens on the user devices, because there you know where they are executing and the chance of figuring out what’s actually happening is higher.
So, to sum up the platform layer, what is needed is a truly global patent filing strategy right from the beginning and a deep understanding and careful selection of which of the interacting components to protect.
Patenting the application layer – use cases, applications and business models
Turning to the application layer, things even get more complex because by definition we’re moving up the abstraction layers and things get less tangible, less physical, by nature.
And here it gets really interesting because clever innovators in the space will of course try to patent all sorts of use cases, applications and even business models in the Metaverse which by definition happen to a large extent virtually, because the Metaverse is a virtual world, right?
Here, we’re talking about things like chat bots, which might be difficult to patent in certain jurisdictions. For example, the EPO has this strong notion of a required technical effect, which regularly boils down to exploiting computing resources in a clever way, such as processing power and storage space, but if the effect, or purpose, of a unique novel chat bot is merely a more intuitive and natural interaction with the user, this may hardly qualify as a technical effect at the EPO.
The same with AI or machine-learning inventions. While AI-based inventions are perfectly patentable at the EPO if they are applied to, and restricted to, solving “hard” technical problems, for example for controlling an industrial robot, using the same AI to control a virtual bot in the Metaverse so that it behaves like a human, is probably considered a non-technical use of AI.
We’re basically entering the arena of simulation programs here, which are difficult to patent at the EPO right now. However, these restrictions do not apply globally, and in my experience patents for these things are currently easier to obtain in the U.S., which, very roughly speaking, requires only a “practical” application, not a “hard technical” one.
So, to sum it all up, in my experience the Metaverse is particularly challenging in terms of patent protection, but also an exciting playground to really think hard about global patent drafting and enforcement strategies.
In case you’re an IP professional and you’re interested in actually working on these topics, you may consider joining I3PM, the International Institute for IP Management, where we have a dedicated committee for Software Patents and we will soon also have a committee dedicated to AI and IP specifically.
So, as a take home message, here are three key challenges I tried to outline in my presentation today:
- The definition of patentable subject-matter: The Metaverse is a relatively new concept, and patent offices are still grappling with what kinds of inventions can be patented in this space, in particular with regards to the definition and boundaries of the notion of “technical effect”
- Distributed patent infringement: In the Metaverse, it may be challenging to identify instances of patent infringement given the decentralized and oftentimes anonymous nature of many Metaverse platforms.
- International considerations: Patents are granted on a country-by-country basis, which can make it challenging to protect inventions that operate across physical boundaries in the Metaverse.
Posted on January 23, 2023
Recently, I had the opportunity to speak at an incredible conference in Paris called “Blockchain/Web3 & IP: What the Heck?” and let me tell you, it was a blast! The conference brought together some of the brightest minds in the intellectual property field as it relates to blockchain and web3, and I was humbled to be a part of the discussion panel alongside the heavy hitters Oliver Scherenberg, Alessio Balbo, Laurent Nowak, and the moderator Raffaele Battaglini.
Introduction to key terms and definitions
The event began with an introduction to key terms and definitions in the field of blockchain and intellectual property. The panelists discussed the historical background of web1, web2, and web3, and how the use case of bitcoin played a major role in the evolution of the technology. They delved into the various aspects of blockchain technology, including cryptocurrency, self-sovereign identity, and the role of smart contracts. Additionally, they discussed NFTs, or non-fungible tokens, which are used to represent digital assets in a unique way. Finally, they touched on the topic of the metaverse, which is a virtual world where users can interact in a decentralized and autonomous manner.
Smart contracts and oracles
In this first part of the event, my job was to explain the concept of smart contracts and oracles . I began by defining a smart contract as a “contract” that is “smart”, meaning it is codified in a program that is stored on a blockchain and runs automatically when a certain condition is met. I highlighted the purpose of smart contracts, which is to automate the execution of an agreement or automate a workflow.
I provided examples of automatic actions that can be triggered by smart contracts such as releasing funds to someone, sending a notification, or issuing a ticket. I also emphasized that smart contracts can provide transparency and trustworthiness because all the information is on the blockchain.
I also discussed the different capabilities of smart contracts on different blockchain platforms. For example, the bitcoin blockchain has limited capabilities for security reasons, it has no loops for eample, whereas the Ethereum blockchain has a Turing complete programming language. However, I also highlighted that smart contracts can only access on-chain data and the need for external data flowing into blockchains and smart contracts.
To address this issue, I explained the concept of oracles which are applications that feed data from outside the blockchain into a smart contract. Oracles can source, verify, and transmit external information. They can also trigger actions in the real world, such as unlocking a smart lock.
I provided examples of the types of data that can be accessed by oracles such as sensor readings, satellite images, web APIs, and also legal data. I highlighted that oracles enable use cases for smart contracts that go far beyond cryptocurrency.
I also briefly discussed the Oracle problem which is how to verify that the data that is injected is correct and the need for trustlessness. I explained two types of Oracles, centralized and decentralized Oracles, where centralized Oracles are controlled by a single entity, and decentralized Oracles find a consensus on off-chain data before it is sent to the blockchain.
Key topics and issues related to the web3 industry
In the second part of the event, the panelists discussed specific topics and issues related to the Web3 industry. Some of the key topics discussed included:
- Licensing NFTs and the “can’t be evil” standard licenses
- Trademark protection in the Metaverse
- Safeguarding/enforcing IP rights in the web3
- Case law on trademark and copyright infringements in the Web3 industry
- New licensing models using blockchain/NFTs, monetization/tokenization of IP assets
Regarding licensing NFTs, the panelists discussed the importance of having standard licenses for NFTs to ensure that they are not used for malicious purposes. They also talked about the “can’t be evil” standard license which is a set of guidelines that should be followed when creating and using NFTs.
The panelists also discussed the challenges and opportunities in terms of trademark protection in the Metaverse. They discussed the importance of safeguarding and enforcing IP rights in the web3, and provided examples of case law on trademark and copyright infringements in the Web3 industry.
The tokenization of IP assets
My job in this part was to discuss new licensing models that are emerging as a result of blockchain and NFTs, and how they can be used to monetize and tokenize IP assets. I began by discussing the concept of tokenization of IP assets, which involves representing an IP right such as a trademark, patent, or copyright with a token (for instance an NFT). I highlighted that this can provide a way to digitally display ownership of IP in a secure, transparent, and immutable manner.
I also discussed the concept of proof of ownership of IP, and provided examples of platforms that use blockchain technology to create a timestamped trail of an innovation process. For example, Bernstein.io creates a timestamped trail of an innovation process on the blockchain, providing proof of possession of information (for instance an invention) at a point in time. Binded is another platform that uses blockchain to automate copyright registration and licensing for photographers and other creators.
New licensing models using blockchain and NFTs
Furthermore, I talked about controlling licensing agreements with blockchain-based smart contracts. I explained that this can be used to automate the licensing process, reduce the need for intermediaries, increase transparency, and trust.
I provided an example of IPwe, a smart blockchain-based patent transaction marketplace, where patents are represented by NFTs that encapsulate information about the IP right, including public data and private data. This allows for a transparent and secure way to manage IP rights and automate the licensing process.
Overall, I discussed how blockchain and NFTs can help facilitate new licensing models for IP assets and provide a secure, transparent, and efficient way to manage and monetize IP rights.
Patents for blockchain innovations
In the third part of the event, the focus was on patent protection in relation to blockchain and DLT-based technologies. I had the honor to discuss various aspects of patent protection in this area, including statistics, trends, patentability aspects, and the interplay between patents and open-source, with my mate Romain Vidal, who is the President of YMC LES France, Regional Ambassador of Global Blockchain Business Council (GBBC), and Senior Account Executive at IPRally.
We centered our discussion around three questions:
What exactly do patents protect anyway in the blockchain space?
The first question was “What exactly do patents protect anyway and how do they differ from other IP rights like trademarks and copyright?” I explained that the similarity between the different IP rights is that the owner can force others to stop using the protected thing or allow them to use it in return for a license fee.
However, the difference is what “the thing” that’s protected is. Trademarks and copyrights protect a specific thing in the real world such as a name, a logo, or a piece of code. Patents, on the other hand, protect more abstract things, namely inventions, i.e., a unique way of doing something, a unique functionality.
I also highlighted that patents are not directly tied to a concrete product and there is no patent on Ethereum and nor it the Bitcoin whitepaper patented. Rather, patents can protect specific innovative functionalities such as cryptographic inventions to improve security, computer networking inventions to improve performance, scalability, and detecting malicious events, and all sorts of innovative applications of blockchain technology. I also discussed the patentability requirements for blockchain inventions, which are essentially CIIs, so that the EPO’s typical requirements of novelty and inventive step focussing on the technical contribution apply.
Do patents even play a role in the blockchain space?
The second question was “Do patents even play a role in the blockchain space?” I explained that patents play an important role in the blockchain space.
There are roughly 50,000 patent documents that mention “blockchain” and the number of filings has been growing exponentially since 2018. The top applicants include interesting players from diverse industries:
- tech giants like Alibaba Group and IBM
- pure blockchain companies like nChain
- FinTech companies like Mastercard, Visa, and Bank of America
What should web3 startups do with their IP when they start building their business?
The third question was “What should startups do when they start building their business in the blockchain space?” I recommended startups get some basic understanding of patents and not to fall for the common misconceptions that “software isn’t patentable anyway” or “we use open source so we’re safe”. I also recommended that startups check if their competitors have patents that need to be considered or worked around through a Freedom to operate (FTO) search.
I also emphasized that startups should understand that patents are ultimately business assets and can typically improve the company valuation during a funding round or an exit, but it’s important to start early as a patent portfolio takes years to build up and once something is published, it can no longer be patented.
A typical startup patent strategy, I suggested, would be to file as early as possible and then delay the costly decisions as much as possible.
Get ready for the main event
The conference “Blockchain/Web3 & IP: what the heck?” was a great opportunity for me to dive into the complexities of intellectual property in the blockchain and web3 space. I was honored to be a part of the panel and share my insights on patents for blockchain and web3 innovations.
At the same time, this was only the intro to a bigger event in autumn, where we will delve deeper into various aspects of intellectual property in the blockchain and web3 space. Can’t wait!
Which of the topics above did you find most helpful? Which one should I write more about?
UPDATE: Here’s a blog post I compiled from my conference notes.
Let’s meet in Paris 🇫🇷 to geek out over blockchain, DLT, web3, NFTs, smart contracts, patents and IP!
I’m super excited to be part of a top-notch lineup at the conference Blockchain/Web3 & IP: what the heck?. Many thanks to Romain Vidal and Claire Le Floch for having us at LES France – Licensing Executives Society.
👉 Join us on Tuesday 17 January 2023 in Paris or by Zoom. Register here.
(Picture made by DALL·E 2)
If you want to learn how the European Patent Office deals with patent applications for blockchain innovations, this presentation by the EPO’s Koen Lievens is a good starting point:
His slide deck is here.
The EPO also has recordings of a full-day conference on patenting blockchain.