Monique M. Couture
Partner
Trademark Agent
On-demand webinar
63
[AUDIO LOGO] MONIQUE COUTURE: Welcome to our attendees and panelists to our webinar today, and the hot topic of the metaverse. We will be looking at the evolution of the metaverse over the last year. We've gone from, what is this? And how does it work? Should I get involved? And where is it going? And what's it really good for? My name is Monique Couture. I'm a partner and a trademark agent, working in brand protection with Gowling WLG in Canada. I'm your moderator today, and I look forward to discussing this with my today's panelists and colleagues.
We welcome Brent Arnold. Brent is a partner in our Toronto office where he works as a commercial litigator and a data breach coach. We. Also welcome Harleen Khanijoun. Harleen is an IP lawyer, and a registered trademark and patent agent in Canada. She's the author of Some Of The Thought Leadership Pieces Relating To The Metaverse. We also welcome John Parker, IP partner in the UAE, and co-head of our global brand protection team.
He has been practicing in the Middle East since 2006, and has deep insights into the current state regarding the metaverse platforms in the UAE, who are undisputedly leading the way and regulating online financial transactions. And last but certainly not least, we welcome Vincent Tan from JurisAsia, with whom we have an exclusive referral arrangement. Vincent is a corporate lawyer, and best placed to inform us about the developments in Singapore in this space.
Thank you so much for joining us today. Please use the Q&A section for any questions you may have. We'll try to answer them as we go. Over the last year, we've been increasingly invited to speak and advise clients to guide them through this new digital world. This has allowed us to observe some very interesting trends over the last year. The research firm, Gartner, projects that by 2026, one in every four people will spend at least an hour a day in the metaverse. Work, to study, to shop, to socialize, according to Gartner.
The most interesting developments shaping the way companies use the metaverse is the evolution of different types of multiverses that we've seen over the last year. There's an industrial metaverse, a consumer metaverse, and an enterprise metaverse. And while many people associate the term, metaverse, with a colorful virtual world for entertainment and shopping, we would think of that as a consumer metaverse. The industrial metaverse is actually very much developing rapidly.
Industrial metaverse mirrors and simulates machines, factories, buildings, cities, and vehicles, and entire traffic systems even, can be mirrored and simulated. This enables virtual testing that conserves resources in a material way. In this way, the industrial metaverse has the potential to allow everyone to innovate with much more lower risks, and costs. And I would note to anyone interested in this development that Siemens has a very, very good paper on this that has recently been published.
And then finally, we have the enterprise metaverse, which is an immersive virtual space for businesses to promote their digital tools and services. Some unique ways that this technology has been utilized for business includes house viewings, work meetings. In Canada, the Vancouver Airport itself has a digital twin that is used for training and other things. In law enforcement, we've seen increased attention to policing and privacy in the metaverse, and Interpol has developed a reproduction of its French headquarters, delivering training.
Interpol foresees many benefits in terms of remote work, networking, collecting and preserving evidence from prime crime scenes, which is a whole new way the metaverse can be used for law enforcement. On the health care front, we see important initiatives. The Department of Health launches the Abu Dhabi Life Science Hub in the metaverse, and XRP Health Care Partners as a United Networks of America with access to 120 million members to deliver health care. In the sports world-- in the sports world, sports leagues are becoming more active with the NBA, the NFL, and golf all venturing into this space.
With all of these developments, and only one hour to discuss, we really have to choose what we're going to focus on. And so we're going to discuss the lay of the land of the metaverse, the vibrant metaverse of developments in Singapore and the UAE. Specific actions taken by brands and fashion houses in the metaverse, and legal developments and IP, and otherwise. And so moving now to Brent, a lot has been happening, Brent, but can you kick us off with a very basic primer of the metaverse. Thank you.
BRENT ARNOLD: Happy to do that. So there's a couple of things to bear in mind when we talk about the metaverse because the coverage on this in the media isn't always clear on this. First of all, there isn't a metaverse. It's a concept, the metaverse. Not a particular place. Not even with a singular virtual place yet, we may get there. There's two streams of metaverse technology. One is what's called AR or augmented reality. And that is where you move through life, but using devices like Google Glass.
We've seen other interactive wearable technology, for instance. You have an overlay-- a digital overlay of a metaverse on top of your actual reality. So you're going about your day, moving through your actual world, but you have an overlay of information that allows you to make choices and find things that you need. That's AR. You also have virtual reality, where you are-- and this is more familiar to most people. You are immersing yourself in a digital platform sitting at your computer.
You may be using virtual reality glasses like the Meta Oculus 2, but you are not going outside and walking around with it. You are still sitting at a computer, and you are an avatar moving through a virtual world as opposed to your self moving through a world with the virtual imposed on top of it. So that's VR. And there's several competing platforms for VR for-- at the moment. There's for instance, Roblox, which anyone with-- anyone who has a young kid will have seen already.
It's a gaming platform where you set up an avatar, and move seamlessly through different games. Meta has its virtual workspaces where soon people will have legs, I'm told. They don't at the moment. You have other platforms like Decentraland and Sandbox. Decentraland is one of the ones we hear the most about because that's where you've heard things like people buying real estate to live next to virtual estates of celebrities like Snoop Dogg.
It's going to be some time before we know whether or not, there's going to be-- it's like the early days of the browser wars, or social media, where you've got a lot of competing products, and we're waiting to see whether or not one is going to be a dominant player or whether several are going to coexist and offer slightly different things now. Several of those platforms have banded together so that they'll-- developing common standards and interoperability. So you should be able to move with your avatar seamlessly through one environment and another.
But it's hard to say whether or not people will make that choice because at the moment a lot of those platforms are similar. One of the interesting developments over the last year, we've seen them, people will be familiar with this, is with the bottom falling out of the crypto market. We've seen a bit of a cooling on spending on the commercial side of the commercial side of this. That's sort of the entertainment version that I've been talking about, and that people will be most familiar with these platforms where you go to concerts, and game, and walk around in the virtual world.
Companies like Meta and others have pulled a lot of their research pipeline funding for this technology, which may just mean that the winners in this end up being companies we are expecting, not necessarily the ones that are the best funded going in. Now how would you get started with this? It sounds-- it can sound daunting. It sounds overwhelming. It doesn't need to be, and you can do it for the most part with technology you have. You just need a decent computer with good graphics, and a good internet connection.
To start off, in most of these platforms, and I'll show you an example now. You can simply set up a guest account. You don't have to give the platform very much at all in the way of personal information. You don't have to, at this stage, have a crypto wallet or have cryptocurrency, because that's sort of the barrier for lots of people when they're thinking about getting into this, but here you can see this is my avatar in Decentraland. So I set up my guest account for free at first.
I chose representation that looks exactly like me, only in the digital world, with various pants choices. So I then can use this avatar to walk through the platform, and sort of poke around and experience things. And among the things that I could show you that I've seen in that space. Here is a virtual event space for Samsung that it uses to launch its products. And here is a virtual gallery for the art dealer.
An auction house, Sotheby's, where you can walk in, and actually tour the gallery. So these are the kinds of experiences you can have with just that free account. Now the next level would be you link it to a crypto wallet. You get some cryptocurrency. That's a bit of a process as those of us have done it will tell you. And then you can actually start transacting. Sort of buying things for your avatar, buying real goods through virtual stores, that sort of a thing.
Now the next level would be, if you're going to be a business transacting in the metaverse, and this is where you might actually either start advertising on virtual billboards, for instance. You may actually take out virtual real estate and build a virtual storefront, or office. We've seen, and everyone we've seen doing this from again, Samsung, who you've just seen, right down to smaller law firms where they've set up virtual offices where the avatars of potential customers can walk in and inquire about legal services. So that's sort of what the gamut of experiences you can have on this, depending on how far you want to commit to it.
MONIQUE COUTURE: Brent, thanks so much. I've got to say, I'm waiting for the day where you catch up to your avatar in real life. Over the last year, Brent, we've seen a lot more enforcement action from authorities as it relates, for example, to pump and dump schemes. We saw the Securities Exchange Commission fined Kim Kardashian 1.26 million to settle civil charges after she was found to have touted Ethereum maps and Instagram. Has all of this had an impact on the development of the metaverse, in your view?
BRENT ARNOLD: I think the part-- yes. Short answer, yes. Now I think the part of it that has had the real impact-- has been impact has been the depression of the crypto market and-- the enforcement action is part of it, but it's really more something that, for instance, celebrities need to worry about. The basis of those actions-- those enforcement actions was, they weren't telling people they were being paid to promote a product. But this is part of an overall problem we've seen over the last year, which is that the value of crypto is depressed significantly, and crypto is the medium of exchange for these metaverse platforms.
So if your crypto isn't worth anything, it's hard to buy and sell. So to some extent, the parts of this technology that are dependent on commerce, and the buying and selling of things using crypto, ride that wave of the value of cryptocurrency. Now the good news for that is that hope springs eternal in the crypto community, and we've already seen that there's been a bounce in the price of various cryptocurrencies. And I'm speaking here from a Western's perspective. We're going to talk about a global perspective.
This sounds monolithic as I present it, but we'll hear some other perspectives as well. But even in the West where we saw that sort of-- the chilliest to the chilling effects, we're starting to see a bounce, I think. And there's nothing stopping us in this environment from continuing to use the technology, and leverage it in ways that are dependent on those commerce based things, or using other commerce models.
The roadblocks platform I was talking about before, that kids used to play games in and just sort interact. Those are the coin of the realm. There are gift cards that you can buy in a Shopper's Drug Mart, and you just use the code like a gift card. So that's not even dependent on crypto, and there's been no slowing down on the use of that platform.
MONIQUE COUTURE: That's a very interesting distinction to make, and that in the gaming world it's maybe not such a material connection. But as you say, Brent, the world is a big place, and just because there's a chilling effect in North America, doesn't necessarily translate for the rest of the world. So Vincent, I'd like to ask you. What is the current situation in Singapore? Where do you see the opportunities?
VINCENT TAN: Thanks, Monique. We think that things are really getting interesting in Singapore. We are undeniably affected by the global dampening of sentiments towards the crypto industry. But I think that is still a very strong confidence that the digital economy is a key pillar that will drive future growth in the region, and globally. So Singapore is part of the Southeast Asian region, which is a very big market with a rising middle class and very tech savvy demographic.
The total population size is about 687 million, which is around 2 times the total population of the United States. The median age of the region is also very low number at 30.2, compared to the 38.3 in the United States. So there is very big interest in metaverse in this region, and firms are interested in integrating the metaverse into their products and services to give a more immersive experience for the customers. So for example, the Changi Airport Group, launched the ChangiVerse, as you can see on the screen, on the Roblox platform earlier this month.
This is a digital twin of the airport, and allows users to explore iconic landmarks of the Changi Airport, and to access a range of fun-filled activities and social activity experiences. So another example that we can give is the launch of the Translucia, which is a metaverse platform created by an entertainment and media company. And one of the first partners is a prominent real estate group in Thailand.
So Translucia aims to drive and transform business in every sector in Thailand, including entertainment, real estate, retail, and health care. And one of the partners of Translucia is Sygnum Bank, which is the world's first digital assets-only bank, which harnesses the distributed ledger technology to embed digital assets into regulated banking. So this Sygnum Bank the, whole banking license in Switzerland, and also a capital markets license in Singapore.
And this allows their customers to securely invest in digital assets such as Bitcoin, Ethereum, tokenized securities, and other types of innovative digital assets investment products. So we see that, generally the push to drive growth in this area is led mainly by the private sector, but the public sector is also observing very carefully to see how they can leverage on the metaverse to provide government services.
The lockdown in Singapore was a huge factor in pushing government services to go online as the sense of willingness, and ability of the public to access services online. So in Singapore, the Ministry of Law, Edwin Tong, has suggested that government services in the future will be provided virtually, perhaps in the metaverse, and that dispute resolution may eventually be held in the metaverse itself.
And in Indonesia, the government launched the Indonesia Metaverse Collaboration Initiative in March this year. So this is a national level public to private partnership, which aims to promote the digital economy as a key pillar for Indonesia to become one of the key economies of the world by 2030.
[INTERPOSING VOICES]
BRENT ARNOLD: Go ahead.
VINCENT TAN: Sorry?
BRENT ARNOLD: Go ahead
VINCENT TAN: Yeah, so just to end up, all and all, we think that there are a lot of opportunities and potential for growth in this region.
BRENT ARNOLD: Thank you. It's a really good reminder to our clients who operate multinational, or globally, that don't put on your North America blinders because there are parts of the world that are far ahead of us in this, and I think, are frankly seeing opportunities that we're still years away from really embracing.
MONIQUE COUTURE: That's an excellent point, Brent. To think globally on these issues is absolutely imperative. So on that note, turning to the UAE. John Parker, what is the current situation, and what are the developments there? What do you see as the opportunities?
JOHN PARKER: Thanks Monique. I think, generally speaking with similar to Singapore in that we have a very tech savvy population with a high number of mobile phone users, et cetera. I think it's an average number of three per person. But I think, unlike Singapore in relation to the metaverse and crypto, it's been very much a public sector push here. So it's very much the government trying to take the lead and bring about a metaverse economy here in the UAE, and also a crypto asset economy.
And so in particular, within UAE government and Dubai itself, they've seen this has been a significant opportunity in and around the metaverse and virtual assets. Let's try and attract both companies here in the region to develop in this area, but also let's bring in the international players. And that's something I'll touch on shortly. There are a number of government backed initiatives already. So as you see on screen, last year we had the Dubai Metaverse assembly in September 2022, which attracted attendees from around the world here to Dubai to run through the assembly.
This came about shortly after Dubai releasing the metaverse strategy, which I think was one of the first government publicly announced strategies that have been made available. And what we are seeing already is that there are a number of training and educational activities. So something Brent touched on earlier. Already we are having training being conducted in part, if not fully, through the metaverse. For example, we've actually carried out some of our professional training through the legal affairs department, which is partly been held through the metaverse already here in Dubai.
And I think the plan is for even more of that to be rolled out. Dubai is also put in place the VARA, which is the virtual assets regulatory authority. This came into being early last year, and was established for regulating virtual assets here in the UAE and virtual asset service providers. It also became the first regulator on the metaverse, or on a metaverse platform. The platform it picked in May 22 was Sandbox.
And what they are looking to do, through the metaverse platform with Sandbox, is to promote a borderless audience. So has it been touched on metaverse being borderless as such, let's use that to have a borderless audience to attract people through here to the UAE, but also to promote engagement with virtual asset service providers, and also international regulators. Going back to the metaverse strategy, there are some strong plans around this.
So Dubai, for example, is aiming to be a top 10 global metaverse economy, and also a global hub for the metaverse community. Through this by 2030, it's looking to create 40,000 jobs within the virtual world for Dubai-based entities, and to boost the UAE economy to the tune of 4 billion US dollars with the contribution of the metaverse community here in the UAE. There's also been significant development around Web3 technologies in key Dubai sectors, and some of these are a common theme.
I think we'll hear today, such as tourism, education, training, retail, health care. So you touched yourself earlier, Monique, on the Abu Dhabi Health Initiative and legal. So already in the UAE and Abu Dhabi, the ADGM jurisdiction has already deployed mediation in the metaverse just a few months ago. And again, this all comes around through the full deployment of 5G networks here in country.
MONIQUE COUTURE: John, those are some pretty incredible initiatives and plans that you've just detailed. Where do you see the opportunities?
JOHN PARKER: There are significant opportunities. And I think some companies are already looking to take advantage of these. So already we're assisting global businesses in coming to the UAE to look at obtaining their viral license, setting up businesses here as well in order to look at whether it's FinTech, gaming, education, or even retail. To date, VARA have issued a handful of licenses, but it expects through this year, to have over 300 license applications.
And hopefully, we'll see more and more being granted through the next 12 months. But there have been a number of provisional licenses to date. So the opportunities are here and now.
MONIQUE COUTURE: Very, very interesting. And as you said, the UAE is the first country for online finance regulations. Do you think other countries might follow your example?
JOHN PARKER: I mean, I think some other companies, countries even, have already put a regulatory framework in place with an eye to crypto assets. So Bahamas, Bahrain, Cayman Islands, Gibraltar, Japan, Switzerland, and others have adapted their regulatory provisions in order to take account of this. I understand the EU is in advanced stages of finalizing the new markets and crypto assets regulation also.
But I think, it's what we're also seeing is not just around regulation, but these opportunities and the country level plan. So already as we heard from Vincent, Indonesia, Singapore are already exploring their metaverse, as are South Korea. So the mayor of Seoul has actually put a metaverse platform in place in which they are offering public services to Seoul residents. Barbados was the first country to put a diplomatic embassy on Decentraland on the metaverse platform.
Spain is offering grants to startups and innovators in and around metaverse. I think the funding is to the total of around $8.5 million through to the end of 2023. And then within China, we've seen Shanghai developing or looking to develop their economy, their metaverse based economy to the tune of an additional $52 million. And we'll see more and more follow in this.
MONIQUE COUTURE: It's just incredible to see how governments have been seizing the opportunity because they see it as a way of delivering services to their people and boosting the economy. It's absolutely fascinating. Thank you, John, for all of that insight for the UAE. We're going to move now back to North America with Harleen. Harleen, you are actively advising clients on questions around the metaverse. Why companies should do business in the metaverse, and who is already there. Brands or NFTs.
We've seen an increase in the brands in the metaverse for marketing and entertainment purposes. We know there's a Metaverse Fashion Show. We know that Macy's actually has a virtual version of its annual Thanksgiving parade. We know that iHeartMedia plans to host several events in their metaverse concert arena. What are you seeing?
HARLEEN KHANIJOUN: That's right, Monique. Thank you, and you're right. As expected, brands, fashion houses, and entertainment are leading the way as early adopters, and they're doing it in a really interesting way by combining digital and virtual worlds, and presenting a brand new way of interacting with consumers. So what happens with the metaverse is that the opportunities for consumer engagement are increased, because you can shed the physical constraints of the real world and enter this potentially fantastical realm that's guided by your imagination.
I see here on the slide that we have Travis Scott's surreal concert that racked up a live audience of 12 million viewers, and it had all these vibrant colors and graphics. There was another concert. This is an all 2020, 21, Ariana Grande had a concert inside Fortnite's metaverse that showed the suspension of physical reality. Her avatars wearing icy blue gear, angel wings, and she's flying through the sky, which shatters at one point. These are one way that entertainment is doing it.
But another way that brands are engaging with consumers, is they're creating entirely new physical products that are inspired from the virtual world. So in one example, Nike acquired RTFKT, which created virtual sneakers including those called crypto kicks. Now it's released physical sneakers originating from the virtual ones called crypto kicks IRL. And for those of you who know, IRL is in real life.
And these physical shoes come with wireless charging, customizable lights, Bluetooth pairing with a mobile app for control, NFC chip, and all they're doing is they're increasingly blurring the lines between what is physical and what is virtual. So this opportunity for consumer engagement was rooted in the metaverse because the physical goods followed what was originally born in the metaverse. Another way of interacting with the consumers is the creation of concurrent physical and virtual spaces.
So for example, Gucci paired its physical space in Florence, Italy, where people could enter and have this immersive digital experience, and explore different rooms. And at the same time, they launched a virtual space. And in this virtual space, they could also enter using a headset and explore all the rooms. Now these brands are not limiting this to one metaverse platform. Originally Gucci did this on Roblox, and it's now hosting a virtual fashion house in the Sandbox, thus allowing users to purchase luxury items for their avatars. This is just providing a new way for brands to engage with their consumers.
MONIQUE COUTURE: Oh, Harleen, that's absolutely fascinating. I love the idea of the creativity that's unleashed because of the lack of physical constraints. It's fascinating. But turning now to the idea of an intangible asset, as we've heard, there are a number of brands already very active on various platforms, and many are filing trademarks in the metaverse field. We also know that the news classification has added language to address NFTs, the metaverse, and crypto assets.
And we also know that YPO is currently studying how to best address these developments with expert meetings that are happening this spring. We've also followed publicly known cases of disputes surrounding trademark infringements through NFTs. What are the opportunities from the IP perspective? What is happening with patents? What kind of IP portfolio developments are you seeing, Harleen?
HARLEEN KHANIJOUN: It's a really good question, Monique, because IP rights cover intangible assets, and here we're dealing with digital and virtual goods. So it only makes sense that IP rights here are implicated. So one now famous example is shown on the next slide, and that is the meta breaking case that shows how traditional IP rights were used to challenge unauthorized creation and sales of digital Birkin bags. This furry digital images of the Birkin bag were sold on OpenSea, and following a cease and desist letter, they were removed from the platform and the infringement continued on other platforms and a lawsuit ensued.
It was successful. This was a defensive measure. Brands are taking note, and they are being proactive by filing trademark applications for virtual stores, for NFTs, for digital goods, for crypto assets, and we have already reviewed client portfolios and guided them in how to consider trademark protection for their entry into the metaverse. In addition to their trademarks, you brought up a good point that entities are also looking at patents. So entities interested in creating the metaverse, and in engaging in the metaverse, are looking at patents on the hardware and the software.
So in one hardware example, Nvidia owns a patent application for user navigation while wearing a headset, such that the VR headset not only detects head movement to chart a course, but also eye movement, so that you can move in the metaverse just with your eyes and take action. That can maybe more safely chart a course for accessing the metaverse. Patents can also be considered for the way consumers interact with the metaverse in a really soft way.
So for example, technology that has now been acquired by L'Oreal, employs augmented reality and face tracking algorithm that enables consumers to virtually try on makeup that is customized for the user. So it turns out having 63 landmarks in a person's space is perfect for defining the boundaries of a mouth or lip color, and you can do it virtually. And in a third and final example, Meta has filed a patent application for an avatar personalization engine.
And this permits the user to create an avatar from a real person by using a single picture. So this avatar is customized and mimics the user in real life and you can have it more closely mimic you. And these are just some of the ways that entities can be really proactive in enhancing their IP portfolios for engagement with the metaverse.
MONIQUE COUTURE: Harleen, that is just amazing to see with the developments that are happening there. But with all of the developments as you described, it becomes increasingly evident that the-- Oh, I'm just noticing the slide here. Harleen, do you want to comment briefly?
HARLEEN KHANIJOUN: These are actually, I don't know if you've seen a real Birkin bag, it looks very similar. But these are the Metabirkins. They're fuzzy. They're digital images. They look a little bit furry, and these are what-- I think when the first MetaBirkin bag was sold, and thought, OK, let's let this go. And when it started to be a pattern, this is when it decided, OK. Hold on, we need to look after this because this is going after our brand. Go ahead, Monique.
MONIQUE COUTURE: Thanks so much. Harleen, that would have been the first enforcement case of an NFT using traditional trademark rights is a landmark decision, and very heartening for the brands, I'm sure. But with everything you've described, Harleen, it's becoming increasingly evident that the data piece in the metaverse can only grow in importance. I want us to go back to Brent. Brent, you're a cyber security specialist. What's the common or new cyber security or privacy risks do you see that we or that you've already seen?
BRENT ARNOLD: Well, there's cyber security risks that are sort of just a duplication of what we see in the real world. Sorry, the sun is coming up in New Orleans, so my forehead is blinding. But there are also some wrinkles to this that are very much a product of the platform and the environment. Among the problems we see, is that there is little or no moderation or support for users. So if you're worried that there's an attack. If you are worried that-- you're concerned about your data or your privacy.
There's almost nobody to talk to. I've discovered, for instance, poking around Decentraland, and if you have a problem, you have to go to Discord, Which is a communications platform that hackers and gamers use to speak to people in a forum there. To find somebody. A moderator connected with the metaverse platform to help you deal with your issue, if you can find them, and if they're willing to help you. We have concerns about access points.
So whether it's your phones, your laptops, any device that's connected to the internet is vulnerable, and it's a point of-- potential point of entry for a cyber attack. There's the very interesting and peculiar challenge of avatars, because the old saying from the early days of the internet was, nobody knows you're a dog on the internet, right? So nobody really knows who's behind that guy in the kilt with the Mohawk that I showed you earlier, right? I could be anybody.
I could be an industrial spy who's poking around your store, seeing what you're selling goods for. Or I could be trying to engage in social engineering to try to get somebody to give me their passwords. That sort of thing. And again, there's problems sort of rooted in the technology. Not just the experience. You can't really be sure if you're a business doing a-- working on the metaverse with, let's say, a virtual shop, stood up where you're selling goods or you're at least directing people to your regular website.
You're collecting data on your customers all the time. And it's not just whatever information they give the platform or that they give you as a vendor in the space. It's biometric data. It's information about their crypto wallets. It's information about how they move, and the choices they make. The preferences they make. All of this is caught by some privacy law regimes, and you don't have control over how that data is stored, how much of it is collected, how long it's kept for. Any of those things.
And you don't have any control over whether or not, it's being kept safely, because it's not your platform. You are essentially a guest there. Or possibly a paying guest. If you don't control the platform, you don't control the data. There's also the fact that, as we said before, the coin of the realm in these platforms for the moment at least, is still cryptocurrency. I expect that will continue. And crypto itself is susceptible to cyber attacks and manipulation in ways that 10 years ago, we thought were impossible, but it's proving it's proving to be very possible.
So you import all those same risks that come with cryptocurrency into this metaverse world as well. And, and this is a Canadian example, but it's an exemplar of what we're seeing in other states, is there is increasingly legislation around critical infrastructure. We're imposing cyber security requirements on companies that operate in some way providing critical infrastructure. And in Canada, we have a new law coming in, Bill C 26, that's going to impose those kinds of obligations on a variety of sectors, everything from the banks and finance, all the way through to nuclear power and pipelines.
So if you are in any way-- if your business is in any way a cog in any of those wheels, you're subject to this legislation which requires you to have plans to protect data, and to keep your system safe. How do you do that if you don't control the platform? So we keep coming back to that theme. And again, as I said before, these platforms collect an enormous amount of data. Most privacy law regimes are premised on the principles of consent.
So you have to get user consent if you're going to collect their information. Other principles are you, collect only as much as you need. You use it only for the purpose you tell your users you're going to use it for, and you keep it only as long as you have to for the purposes of providing whatever it is you promise those people. How do you control any of that if you are not the one collecting the data? The platform is. How are you going to implement, let's say, a right to be forgotten which customers in the EU have, because these platforms bring people together from all over the world. That's part of their appeal.
My daughter plays video games with another kid in Sweden when she gets home from school through roadblocks. So these platforms can bring people from all over the world, but every one of those people, privacy law regimes are driven by the jurisdiction of which regime and which sets of laws apply, are driven by where is the person in the world, the physical world, to whom the data applies. So if you have a European citizen interacting in these platforms, and they've got-- their data is being collected.
They have a right to be forgotten under the GDPR. How are you going to implement that if their request if they make a request? So as I said, some of these are the same old perennial problems, just revisited. In the metaverse, some of them are very-- they take on a whole new color and shape when you deal with them through the medium of the metaverse.
MONIQUE COUTURE: That's absolutely fascinating, Brent. And what about-- Tor, did you want to comment on any good issues?
BRENT ARNOLD: Well here's the other thing you have to keep an eye out on for, is that, again, all of the risks that you worry about at the real world are recreated in these virtual worlds. You've got people walking around their house wearing Oculus Rift glasses. What if they fall down the stairs? If you spend any time on YouTube, you'll find videos of people having these kinds of accidents. It's not hard to-- it's not hard to do. Same concern with the AR technology when you have people moving through the world with these digital overlays. Are they're going to be distracted? Are they going to have more accidents?
We're already seeing sort of the beginnings of concerns about, well, in these situations, who's liable? Is it the platform? Is it the device manufacturer? Is it all come down to the behavior of the individual? And if I decide I'm going to pursue an action, how am I going to do it? Because if you go into the terms of service of most of these platforms, what you'll discover first of all, is that they're not-- when using them you have agreed that you're not allowed to sue in a class action, possibly at all.
Possibly, you've agreed to arbitrate your disputes. Possibly, you've agreed to arbitrate your disputes in Panama. Because that's where the people that run the platform are resident. What if you just need the platform to give you data about the person that has done something to you in the metaverse where you need their data to help you pursue your lawsuit. How are you going to secure the cooperation when they're not set up in your own jurisdiction.
How far are you going to chase them, and how successful will you be. So there are all kinds of jurisdictional and other legal challenges to enforcement, and to prosecuting a civil action. To prosecuting a criminal action. That again, gets-- just made more complicated by the fact that this is a technology that brings people in from all over the world, but they are still governed by the laws where they are.
MONIQUE COUTURE: Thank you, Brent. You raise such interesting questions. Certainly this question of the opaque nature of who's behind what, and how do you-- how do you even know who to sue, and where to begin. These are enormous questions. Thank you very much for your insight. and Turning now to Vincent and John. Can you comment on other regulatory, legal, or business risks that you see in your own jurisdictions. Starting with Vincent.
VINCENT TAN: I think just along the same line of risk that was mentioned by Brent. South-east Asia as a market is really challenging, because it has 10 different regulatory regimes, varying in degrees of sophistication and enforcement ability. And the legal systems are also very different. So there are some countries, like Malaysia and Singapore, which has a common law system, while the rest of the other countries are a mix of common law, civil law and Sharia law.
So doing business in this region, essentially is not like a one size fits all kind of assessment in terms of, if a company is going to assess its business risk in this area. So just focusing on Singapore. Singapore takes a very proactive approach to policing online harms, and also removing harmful content online. So there are a few new and future regulatory developments in Singapore, and I'll just cover all of this new developments.
So the first of all, Singapore government is going to introduce a new law which protects users against harmful content online, and it gives the Infocomm Media Development Authority, we call them IMDA, the ability to issue directions to social media services and other content platform providers. So these are your social media platforms like Facebook, Twitter, and these were the directions will be given to these providers to disable access to content that actually advocates, or provide instructions on suicide, or self-harm, physical or sexual violence, terrorism, as well as other matters which will cause racial and religious disharmony in Singapore.
And the failure to comply with these directions may result in fines of up to a million in Singapore dollars. So the second development is a code of practice for online safety which will be introduced to regulate social media platforms, and to introduce safeguards against children accessing harmful content online, such as tools that allow children or their parents to manage their safety on certain platforms and mechanisms for users to report harmful content.
So thirdly, Singapore is going to introduce a classification scheme for online games. So this is similar to age ratings for video games, where there are certain marketing, and distribution restrictions for games, which are assigned an age rating. And fourthly, the Personal Data Protection Commission, which is the personal data authority in Singapore. They will also publish guidelines for industries, including best practices on the use of personal data.
Train, test and monitor EI systems. And in particular, social media companies who services are used by children will specify that parental consent must be obtained before data can be collected from children below the age of 13. And that the child's profile is not made public by default.
MONIQUE COUTURE: Vincent, thank you so much. It's so-- it's so proactive. It's hard not to be impressed with all the things that are happening in Singapore. John, what about the UAE? What are the risks or issues that you're seeing?
JOHN PARKER: Thanks, Monique. I guess similar to what we've just heard from Vincent. It's a complex region, If you look at the UAE and wider. But generally, we are civil-- it's a civil law jurisdiction. So for IP rights holders, what that means is, in order to have any real chance of success, you have to have those registered rights. And so that's something to look at as part of your metaverse strategy as has been touched on earlier, particularly by Harleen.
I think though, something to be tested, which we've covered in one of our earlier webinars last year is, there's been an edict coming out of Saudi Arabia under Sharia Law, in which it was recognized, and stated quite clearly that, IP theft is considered Haram or wrong under Sharia, and therefore should not be allowed. And so even if you find yourself in a position without registered rights, that could be a line of argument to consider if you are going through the officials, particularly in a region where Sharia does have influence.
Whilst the UAE itself is civil law, there are two common law jurisdictional areas here, both of which are financial free zones. So the Dubai International Financial Center, where I'm sitting at the moment. But also the Abu Dhabi global markets, which is the NTM mentioned earlier that was looking at mediation in the metaverse. I think the other thing, of course, that will always raise its head is that of jurisdiction.
I think for those rights holders based here in the UAE, who are able to show that UAE consumers have been exposed to these infringements through platforms, for example, whether it's UAE based consumers who've been able to join or subscribe. You may actually find that if you bring an action before the courts in the UAE, that they are willing to take jurisdiction and decide on the matter because they will see that as being-- well, this is an issue that's affecting UAE consumers therefore we can take a roll and decide in this matter.
In the UAE. I think, as we move towards digital transformation, et cetera. The Federal Telecommunications Regulatory Authority was updated just over a year ago, where it moved from being called the Telecommunications Regulatory Authority to the Telecommunications and Digital Government Regulatory Authority. So it's been given this broader remit to look at digital transformation. And so of course that's starting to bring in metaverse in the IRL, the In Real Life, sorry I'm getting old now.
So In Real Life compared to virtual services, or products as well. What we're already seen actually is that the TDRA, as it's now known, is already offering training in the metaverse and through metaverse platforms where it's actually given the fundamentals of the metaverse. So we're competing with it today perhaps. But also it's looking to offer training around aligning metaverse related activities with telecommunication activities, et cetera. So not only is it teaching people about the metaverse here, but it's actually doing it through metaverse platforms.
MONIQUE COUTURE: Isn't that fascinating. That's the TDRA. And so, what about on the regulatory front? And you talked about training and teaching. But what about the regulatory position?
JOHN PARKER: Yeah, so it has this regulatory role. And again, coming back-- there are so many similarities with this region and Singapore. I think Singapore has always been a region that the UAE looks to. But I think this is an area where, perhaps, there are times where we are slightly ahead in this race. So there have already been a number of guidelines and white paper issued down the years regarding social media platforms, both to the platform service providers, but also as much to consumers.
Due to some of the laws here, there have been headlines in the past where consumers, perhaps, have posted something that have caught them, while in some cases, led to jail term which they may not have had elsewhere. So quite early on TDRA set out guidelines as to, this is what you should or shouldn't do in the UAE. And of course, a lot of this is around not offending public morality, et cetera, and the local laws here. The TDRA does have the ability to block access to platforms, and to websites, and social media platforms from here in the UAE, or to UAE based consumers.
So it could be that-- if there is something that perhaps is causing offense, or is an infringement, but you may not have the rights to take action, it may well be that the TDRA is willing to block access to that website or that platform for UAE consumers, particularly if it's going against the morality here. I think generally for anybody looking at the metaverse in or from the UAE, or for targeting UAE based consumers, do take this into account and bear in mind, content.
Ensuring that the content doesn't fall outside the areas of public policy, or be considered against the Islam, et cetera, in order to avoid your platform or your website being blocked. Or perhaps even the business facing sanctions, which could mean criminal sanctions and fines. There are very broad cybercrime laws that were updated just over a year ago. These carry hefty penalties, fines and criminal and jail term as well.
But I think as well as making sure you don't infringe or impact any of those, if you find somebody that's using your rights or somehow damaging your reputation. It's something perhaps, you can explore. Is there an avenue under the cybercrime laws that you could look at as an alternative to IP enforcement or IP infringement? It may well be that leads to a swifter action than the IP resolution.
MONIQUE COUTURE: It certainly sounds like it, John. It's food for thought and I find it quite sobering to hear you talk about all of this. Do you have any other thoughts around business risks for your region, UAE?
JOHN PARKER: I think the last thing, and not just for the UAE, but perhaps generally. I think businesses just need to take account leakage of rights, for want of a better phrase. So let's make sure that these IP rights are developed you're looking to protect, aren't just given away through lack of proper licensing, or lack of strong contractual provisions. So wherever you are entering agreements with third party developers or other third parties that are supporting your move to the metaverse, make sure that your rights are protected so that you retain control and ownership of those rights going forward.
MONIQUE COUTURE: That is an excellent perspective, John. Strong contracts for sure. And so clearly there's so much happening around the entire world as it relates to the metaverse. The space is dynamic. It's developing rapidly in directions we may not have anticipated even a year ago. Of course, this is classic for the emerging technologies. I really doubt that in the 1950s the new adopters of television could possibly have anticipated the massive impact that the TV technology would have had on revenue streams, and our lifestyle, and politics, and sports, and culture.
And I find it fascinating to see how the developments in the metaverse may impact, similarly, revenue streams, lifestyles, politics, sports, business, and culture in the future. And finally, the legal landscape clearly is quite complex, and understanding rights and remedies is critical. So I have a last question for our speakers. What do you think our laws are for this new world? Or what needs to change? How do they need to evolve?
Turning to Harleen. Over the last year, we've seen courts in Singapore, China and New Zealand decide that NFTs can be considered properly-- properties, sorry. Property. How else are the laws evolving?
HARLEEN KHANIJOUN: It is a great question because, you're right. It's an emerging technology, and it's one that really has a potential when it's defined as the next evolution of the internet. To be really changing the face of how we do business, or at least offering a new way of doing it. So I'm going to take you back to the landmark Meadowbrooking case that was litigated in New York. There, what I want to remember, is that traditional IP rights were used to challenge unauthorized digital Birkin bags.
And these rights went to the heart of trademark law, arguing consumer confusion as to source dilution, cybersquatting, and just a host of other violations, including competition. And in this particular scenario, the name Birkin, was also incorporated in the name of the infringing digital goods which were on sale on a very specific website, OpenSea. So before the lawsuit, traditional enforcement measures were used as well to have OpenSea, the hosting platform, remove the infringing goods, which it did.
So I don't want to minimize the importance of being able to use the IP toolkits that we already have at our disposal. So traditional rights have to be or they should be an important part of a really comprehensive enforcement strategy. But we don't know how the metaverse is actually going to materialize. So far, what we talk about the metaverse is a collection of disparate virtual worlds. Sandbox, Roblox, Decentraland, and in these different virtual worlds, you have avatars that are stylized.
And avatars that are stylized in one virtual world don't necessarily carry that stylization into a second virtual world. And that second virtual world could be running from a different geographic location, or a different jurisdiction. And we have some precedents in this because, arguably, a seamless borderless world was created with the rise of the internet. But an interoperable metaverse to take it infringement from one platform to another, gives rise to a whole new challenges. So I think that the answer to this question could very well depend on how the metaverse presents itself, technically.
MONIQUE COUTURE: Of course, very insightful. A lot does depend on everything that we don't know yet. John, what do you think?
JOHN PARKER: Thanks, Monique. Yeah, I think it would help considerably if laws were changed, modernized, improved to protect these rights. And protect rights holders, not only in relation to the metaverse, but more generally as we're going through this era of digital transformation across all sectors. Not just in the metaverse but outside of the metaverse, this is happening as well. So I think generally, we all agree most laws are still aimed for the most part at physical use, physical infringement, with little specific protection to digital use or digital infringement even.
And so that's something that does need to be explored. And I think coming back to Harleen's point, and as we heard from the Birkin case, don't forget the basics of any enforcement strategy. In order to be able to enforce your IP rights, you need those IP rights. So make sure you're getting those IP rights in place, whether through registration or through contract for copyright, and created rights, for example. And on that, we had a case last year here in the UAE where we took action against a number of infringing NFTs.
We caught it at an early stage before any was sold. But fortunately for the client, because it was a relatively new product and service line, it had launched. It had already just gone through quite a significant Protection Program, both through trademarks. It had word marks, 2D marks, 3D marks, logos. But I think importantly for the case in question, it had gone through extensive steps to make sure any underlying copyrights in and around its products and services were owned by it.
And so when the NFTs came online, we were able to move quickly to take it down, both getting undertakings from the infringer, but also having it removed from the platform within 48 hours of it going up. So-- but I think, without the client having gone through that and putting the protection in place to start with, it may have been a very different outcome for them last year.
MONIQUE COUTURE: That's really interesting, John, because of course copyright is incredibly useful to enforce on social media platforms, et cetera. So that same idea that you can-- if you're robust with your copyright, you may be successful and enforcing is something important for people to remember. Thank you, John, for that. Brent, what do you make of all this?
JOHN PARKER: So we've covered IP well. As the non-IP lawyer, all cover all other laws. I touched on some of the problems here before. Jurisdiction, enforceability, that sort of thing. Well, you have the limitations imposed on us by the terms of service of the platform, and we're talking about regular civil actions. When I talked about crypto and cyber, but-- I'm sorry, cyber and privacy.
But the overall probably we have, I think, in the everything else laws is going to be, not so much the content of those laws. Privacy law in most jurisdictions can be applied to what happens in the metaverse. The same as it can everywhere else, in terms of the collection of data. Those laws are deliberately written to be broad enough, and malleable enough that they can be applied to new technologies, otherwise they'd be obsolete the second they were passed.
The problem, though, is that all laws, because laws are passed by states. States have borders. All of these laws come down to problems of jurisdiction. So, how do I go about chasing these people? How do I go about finding them if I'm going to sue them? Coming back to the cyber security aspect, and let's say cybercrime. Prior to the Ukraine war, we could count on a little bit of cooperation. Sometimes a token amount of cooperation from Russia when we were trying to go after cyber criminals in Russia attacking Canadian and US clients.
That's where most of the activity was coming from. Those broad borders are closed to us now in every sense of the word. Most of where those the crime comes from, are countries with no extradition treaties and no incentive to help us. And even where you're dealing with countries with whom we enjoy cordial relations, there's still a lot of coordination required to give our laws effect. If somebody violates the privacy of a Canadian under our Canadian laws, it's difficult for us to enforce those laws internationally.
It requires a lot of cooperation. Takes a lot of time. And it's just not very efficient. So I guess my wish list would be, everything should be coordinated globally, and everyone should be working together. If we can fix that, I think we can fix the internet.
MONIQUE COUTURE: It sounds that-- sounds like an achievable goal any time soon,
[LAUGHTER]
[INAUDIBLE] are flagging the complexity of the moment. Thank you, Brent, for doing that. Vincent, what do you think?
VINCENT TAN: I think that, because currently in Singapore there are no laws which are specifically regulating the metaverse, and the Singapore government is really keenly aware of the danger of overregulating, so to prevent and hinder any progress in this field. So the upcoming laws on protecting online harms in Singapore can easily be extended to the metaverse, but does not solve the issue of establishing jurisdiction. And I think that what is vital is that the regulators and the courts-- they need to be really flexible to adapt to the fast moving world of digital assets and metaverse.
And just coming back to your point about the landmark ruling, or the ruling in Singapore where they recognize NFT as property. So there was a landmark ruling in Singapore last year, and the dispute was actually over some digital assets, which were concluded online on the Ethereum platform. So the judge in the case-- he was able to address a lot of issues, interesting issues.
So for example, he established that NFTs can be considered as property, and he also established that it is possible to conclude contracts online, even with someone who you don't really know who that person is. So it is possible to conclude a contract. And he also allowed the copy was to be served through Twitter, and through other chat platforms like Discord.
So in that particular case, he addressed a few interesting parts of the law which are rarely sort of addressed. And I think that this is a good sign that the courts are willing to be very flexible, and to accept jurisdiction over disputes that are happening over the virtual world. And this also means that, going forward, NFTs can be recognized as a form of property, and it's capable of being subject to court orders and injunctions, which will provide NFT owners with some comfort that they can enforce their rights in respect of their digital assets.
MONIQUE COUTURE: Thank you, Vincent. That's very interesting and of course, we've seen the US courts take jurisdiction as well. And so, I think as time marches on we get more clarity. It will be fascinating to see what this time next year we'll be talking about. I wish to thank very much all of our panelists today. I hope that our audience has a little more insight than they had an hour ago into this fascinating, and dynamic area. If any questions whatsoever, please do not hesitate to follow up with the panelists and, if you have time to attend to our short survey, we'd be grateful.
And please let us know what other topics you'd be talking-- you think we should be talking about in our future webinars? The full video of this webinar will be circulated to you in the next weeks, and it'll also be available on demand on our website, gowlingwlg.com/IP. Together with earlier episodes of our webinar series, and more thought leadership on current hot topics, for brands. And in case you are interested in attending Inter next month, we do have an interesting pre [INAUDIBLE] chat lined up.
Please visit our page at gowlingwlg.com/inter to explore more, and register for the webinar. The next global IP webinars in this series are already being planned. And so please stay tuned to receive our next invites. Thank you so much for joining us, and have a great [INAUDIBLE]. Thank you to our panelists as well.
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For IP owners around the world, the metaverse seems to pose more questions than answers – from the common "what is it?" to the more complex "how do I protect my brand, and my business, in a virtual, borderless universe?" One thing seems certain however: the metaverse presents enormous potential for brands who understand the opportunities – with preparation, knowledge and strategy being the difference makers.
In this webinar, we examine the current state of the metaverse, what it means for business, and the commercial and legal risks that surround it. Featuring a cross-practice panel of IP, tech and corporate professionals from Canada, Singapore and the UAE, the webinar will cover several timely topics, including:
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