A whole new world: Metaverse, sports and events
Sports and Event Management Focus
Ever since Mark Zuckberg announced his decision to change Facebook’s name to “Meta”, there has been a huge curiosity as to what exactly the metaverse is and what possibilities it may hold for the future.
Law Update: Issue 362 - Sports and Event Management
Olaf BorutzSenior Counsel,Head of Sports & Events
Rasha Al ArdahPartner,Intellectual Property
Ever since Mark Zuckberg announced his decision to change Facebook’s name to “Meta” and committed billions of dollars of investment into metaverse technology, there has been a huge curiosity as to what exactly the metaverse is and what possibilities it may hold for the future.
Whilst there is no official definition for what constitutes a metaverse, a metaverse’s objective can be loosely defined as a platform and environment, whereby humans enter (via some form of avatar or virtual representation of themselves) an immersive and interactive virtual environment using certain technologies (be it augmented reality, virtual reality or otherwise).
The creation and use of this environment also in turn leads to new opportunities for consumers and traders, by providing interactive experiences and content consumption possibilities.
To that end, a belief remains that the metaverse will become an integral part of society, by providing a platform for daily social and work life, where the real and virtual worlds intersect. In this respect, the UAE (by way of the Dubai Metaverse Strategy) has announced its intention to become one of the top 10 metaverse economies of the world, by providing a global hub for the metaverse community that fosters innovation and talent and the development of metaverse infrastructure and technology.
There is an excitement about the potential opportunities the metaverse may provide sporting and event organisations by providing new opportunities for fan engagement and monetisation.
In essence, the opportunities are effectively limitless, in the sense that many of the traditional boundaries or barriers faced in the real world have the possibility of being removed (such as limits in respect of location, time and space) within the metaverse.
For instance, viewers of sports or live entertainment content may have greater control on how they consume the relevant content, by becoming more active in their consumption of the relevant via enhanced viewing opportunities (e.g., taking in a match from the team bench or various other vantage points around a virtual stadium) or engagement experiences (e.g., experiencing haptic simulation behind the wheel of a virtual Formula 1 vehicle).
Another recent example of this was Major League Baseball’s creation of a metaverse virtual ballpark for its “All-Star” weekend in July 2023, which allowed fans to create an avatar, participate in mini-games and experience the celebrity softball match, in turn providing an opportunity for fans (who otherwise may have been unable to attend the event) to engage with the content and weekend’s activities.
Similarly, the Ultimate Fighting Championship has started to experiment with metaverse opportunities, in the hope that fans will consume and view fights via virtual reality headsets and interact with one another, whilst enjoying greater viewing opportunities than may be received as part of the normal broadcast.
Retail and merchandise vendors can also use the metaverse to sell products (e.g., for use on avatars) and deliver exclusive brand experiences, as seen with Nike’s creation of its own purpose-built metaverse “Nikeland”. Nikeland has been used to provide exclusive access to celebrity appearances and personalised spaces for users to display their merchandise and purchased items within the platform.
In addition, the metaverse may provide more opportunities to offer loyalty experiences to fans (e.g., rewarding fans with exclusive non-fungible tokens (NFTs) or virtual products), as well as provide organisations and brands with new sponsorship opportunities for exploitation.
Further, the metaverse may provide high performance opportunities to sports teams, by providing enhanced training possibilities and the opportunity to replicate game strategies or tactics in a virtual environment.
The protection of intellectual property rights is one of the most important legal considerations that any sporting or event organisation seeking to use the metaverse needs to consider.
In this regard, organisations should be aware that their trade mark protection for physical goods and/or brands may not extend to any replication of the same in the metaverse, and seek advice to ensure that their intellectual property is protected to the extent possible in connection with any metaverse (as well as in connection with any new intellectual property created). The WIPO through its administered international specifications (Nice Classification), has recently issued its 12th edition which includes goods related to the metaverse. In the UAE, while it has yet to adopt the 12th edition of the Nice Classification, there are numerous classes of trade mark that may be relevant for the protection of certain metaverse assets, including Class 9, Class 35, Class 36, Class 41 and Class 42.
In addition, organisations should consider and review any copyright creation issues for any artistic works, designs, audio and/or images created for use in the metaverse, as well as in respect of any software created to host a metaverse. This, for example, could include the creation of any merchandise for use on avatars within a metaverse or any artistic works that attach to any non-fungible tokens issued as tickets to virtual users. Similarly, any copyrightable works created by an avatar within a metaverse (e.g., a new song as part of an event) may also need to be closely reviewed to determine who is the ultimate author and owner of the relevant copyright.
Organisations should also ensure that they have all the necessary licences, permissions and clearances required to use any third-party intellectual property within any metaverse (and that terms agreed with any third-party extend to any metaverse), as well as ensure that any relevant employees or contractors providing services have assigned any relevant copyright (or other rights) to any relevant works to the business.
From a commercial perspective, organisations should be clear on agreeing the exclusivity that may be granted to any third parties in respect of any created metaverse (e.g., any rights holders granting broadcast rights to partners should make it clear whether a relevant broadcaster is being granted any rights to broadcast via a metaverse).
Further, organisations who grant any rights to activate to partners in the metaverse should also ensure that they retain some approval rights (within their agreements) for the any commercial partner use of their metaverse, to ensure that an element of control is maintained.
Lastly, organisations will need to ensure that their activities in the metaverse are compliant with any relevant data protection and cybersecurity laws, and also in respect of any financial regulation laws (if NFTs are being offered for sale and could be deemed to be security tokens under any relevant laws).
We can assist you with advice on any proposed metaverse activities, including reviewing any proposed metaverse functionality and any associated intellectual property or other legal considerations.
For further information,please contact Olaf Borutz and Rasha Al Ardah.
Published in October 2023
