Nike wants to bring sneakerheads to the Metaverse

Watch your feet. Many of you ( show of hands ) are wearing Nike at the moment. For the year ending May 31, 2021, Nike reported its rev...

Watch your feet. Many of you (show of hands) are wearing Nike at the moment. For the year ending May 31, 2021, Nike reported its revenue increased 19% to $ 44.5 billion for the year. But it’s here. And in the metaverse?

Why Nike is interested in the Metaverse

For those who are not yet familiar with the concept, the easiest – but very incomplete – way to imagine the Metaverse is to imagine yourself existing in an actual video game. Nike comes in and provides some really cool meta-stuff.

This is not a joke. Nike is very serious about the Metaverse.

Patent filings dating back to the pre-Metaverse universe in 2018 reveal that Nike has seriously stockpiled the tools it can do business with in the Metaverse. These digital tools will include sneakers but also avatars and other forms of virtual branding. Of course, Nike intends to sell you digital goods (and you’ll buy them because Nike knows how to make you want them), but the meta-plan revolves around entire digital worlds.

Is it just Nike who is Nike? Sure, but if we choose to define this as creating new sources of net income, as has been the case throughout its history, so much the better. Someone’s going to own the Metaverse loot, and it might as well be Nike.

The Metaverse has rules that will be new for Nike

Nike must be prepared for the concept of destruction by duplication. In this temporal world, Nike has been very litigious recently with its intellectual property (IP). Yet in the metaverse, the duplication will transcend our current conceptions of what is legal. The value of Nike’s meta-products will be absolutely affected by what the company would consider pirates others would call artists.

In the real world, there is a recent art project called the Museum of Counterfeits with significant commercial application. In short, the Brooklyn Mschf art collective bought an original Warhol for $ 20,000 and made 999 exact fakes. He then shuffled the original and sold the 1,000 “could be real” Warhols for $ 250 each for a total of $ 250,000, of which $ 230,000 was profit.

Related: Digital Goes Physical: The Best NFT Galleries To Visit In Person In 2021

The same will happen in the metaverse. Some rare Nike drops (what we call a new version of a shoe or even a color – known as the “colorway” – of a shoe) will be real, some may be real, and some will be knowingly or unknowingly fake.

The metaverse is new to the courts

As for how the courts will eventually handle these metaverse disputes, Samir Patel, Miami attorney and member of the Miami-Dade Cryptocurrency task force, recently tweeted:

I spoke to Patel about the realities of the new Metaverse and how it will be a quick and difficult discovery when the judges realize that common law precedent will be more of a hindrance than an aid in deciding Metaverse cases. As Patel said:

“Legal doctrine such as beneficial ownership rights, breach of wet contracts, and copyright infringement of human-made works will govern relationships in the Metaverse (MV). “

He continued, “So when Nike wants to participate in the MV, whether it’s with virtual storefronts, avatar gear or creating new products exclusively for the MV, then its lawyers have to link the violation or the legal claim. MV and meat area.

The mere fact that few or no judges (and very few lawyers) have used or even heard the term “meat space” is in itself a problem. The term refers to our physical world, as opposed to cyberspace or a virtual environment such as the metaverse.

So, yes, Metaverse’s claims will need to be simplified for the judges, at least initially written in such a mundane fashion, using such traditional language, so that the judges don’t get lost.

Can Nike help build a Metaverse legal structure?

Patel sees a real opportunity in this. “Nike has the resources to train judges through the trial because they can afford to pay their lawyers to drag out litigation, but other smaller petitioners would have a hard time convincing a judge that they have a virtual property that exists on a virtual land register, maintained by a decentralized blockchain, ”he said.

Patel explained to me that if he bought virtual land in the Metaverse, the judge would likely view the transaction as a sale of property and not a transfer of real estate. Because statutory regulations neither contain nor contemplate the notion of virtual real estate, this virtual land cannot be registered in a virtual land register because this register is not governed by a municipality or a sovereign.

“So if Nike sold a pair of virtual sneakers, but doesn’t deliver the sneakers to the buyer, then it’s a breach of contract in the sale of sneakers. But the negotiated exchange of value will still have to be articulated and eventually recorded in the meat space, ”Patel explained.

What this will mean in practice is a conundrum for the judges, where there is no evidence of an ongoing contract in the metaverse, such as a verbal contract entered into by two avatars. So how can a judge assign a decision to a party in this dispute? It is exactly the same as a verbal contract made in the meatspace. If an avatar can prove that he relies on the verbal contract in the metaverse, just as he can in the meatspace, then there may be some evidence to support a complainant’s claims.

Related: To work for everyone, the metaverse needs to be decentralized

The metaverse can be as contentious as the meatspace

And there will be a lot of complaints. If Nike has a problem with modifying its creations in the meat space without its permission and the defendants in the Nike lawsuits boldly reply that edits are art, not IP theft, just imagine the metaverse. Patel noted:

“Intellectual property laws will be tested in the MV, whether artificial intelligence is used to create landscapes or other virtual objects. “

He added, “This is because AI derivative work is not covered by US copyright laws. So if I were to deploy the AI ​​in the MV and the AI ​​creates something wonderful, I have no rights to the derivative work and someone else can imitate the work and claim the right to author for himself. It will be extremely difficult to protect its copyrights because the MV could be so vast and the infringer could be an entity deployed by the AI. Judges will address these issues using the copyright laws of meatspace. “

This leaves us the only viable way to change the way judges view and decide cases in the Metaverse: by modifying our existing laws to accommodate virtual reality. Without this change, seen through the eyes of the judges, everything is meaty space and virtual reality does not exist as legal reality.

The real legal reality, as Patel pointed out, is that “Nike would be prudent to hire lawyers who are familiar with, and I mean who are very familiar with, real estate, the Uniform Commercial Code, as well as experts in blockchain technology. . “

With the metaverse offering a new virtual world of opportunities to create, sell, buy and pursue, it will be fascinating to look through societal, business and legal lenses. The simple fact that Nike is gearing up to create, sell, and advocate in this new space means you should also be bracing for the reality of the Metaverse, which will soon be coming to a computer or phone near you.

This article does not contain any investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research before making a decision.

The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Aron Solomon is Esquire Digital’s chief legal analyst and has taught entrepreneurship at McGill University and the University of Pennsylvania. Solomon was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Her work has been featured in CBS News, CNBC, USA Today, TechCrunch, The Hill, BuzzFeed, Fortune, VentureBeat, Yahoo !, and many other top publications.