Applying industrial design protection to products in the metaverse

In Brazil, Article 95 of Law No. 9,279/1996 (Industrial Property Law – LPI) defines industrial design as “the material, decorated form of an object or a decorative arrangement of colors and lines that can be applied to a product to provide a new, original appearance and that can be industrially manufactured.”

Thus, we can ascertain the following concepts from this provision:

• Material form: The object must be visible, with a specific external design;
• Decorative function: This refers to the decorative and accessory aspects of the object that give it its appearance;
• It considers the protection of a three-dimensional object or a two-dimensional arrangement;
• The object/arrangement represents a model for the purpose of industrial manufacturing. In other words, it is uniformly reproducible on an industrial scale, without significant deviations in its form;
• Only objects are subject to protection – not specific parts of them.

Furthermore, the National Institute of Industrial Property’s (INPI) Industrial Design Manual provides that industrial design must meet two requirements: novelty (it must be a new, unknown object before it is registered with the INPI) and originality (it must have a distinct form that sets it apart from other objects proceeding it).

Industrial designs are subject to registration and protection with the INPI in two forms: decorative arrangements – a set of lines and colors that can be applied to the surface of a product (such as printed designs on t-shirts), or three-dimensional configurations – with projected height, width and depth (such as furniture, vehicles and packaging).

The registration of an industrial design is important as it gives its holder the right to prevent third parties from producing it, using it, putting it up for sale, or selling or importing it without proper authorization. In Brazil, however, this protection is limited to Brazil itself, thus requiring the holder to register the industrial design in the other locations where the holder intends to use it.

At the same time, Article 98 of the LPI determines that any work of a purely artistic nature is not considered industrial design. Industrial designs representing a common or rough form of an object also cannot be registered, nor can those that are essentially made for technical or functional considerations.

Long before these conceptions came to be applied to more modern digital assets – NFTs, for example – many considered industrial designs to be the form of intellectual property asset that perhaps best represents the integration between art and technology.

This is because industrial designs represent the products or their technical appearance in a way that can be replicated on an industrial scale – it can be said that a given industrial design is a schema for its corresponding product. Or, in more common terms, the work of industrial designers is similar to that of fashion designers. Industrial design examples that can be cited include the patterns applied to clothing or even the icons for mobile applications.

Accordingly, it is important to bear in mind that the registration of industrial designs regards the holder’s fundamental right to exclusively exploit the asset commercially within a certain country – as determined in Article 5, items XXVII and XXIV of Brazil’s Federal Constitution.

Industrial design in the metaverse

People are becoming increasingly aware of the metaverse as it introduces virtual reality into our daily lives, meaning the different ways it intersects with intellectual property rights are also increasingly relevant. As the metaverse offers a virtual world without borders, the question of property rights and industrial designs being limited to national borders has become extremely relevant.

Commercial transactions involving industrial designs in the metaverse may face challenges specific to that environment. This is especially the case for products developed entirely within digital environments, as well as those developed outside the metaverse that are marketed and sold exclusively inside it.

A number of challenges and questions spring to mind, for example:

• How can the originality and exclusivity of an industrial design in the metaverse be guaranteed?
• How can companies avoid violating third-party industrial design rights and ensure their own rights are not infringed in a space whose applicable jurisdiction remains unclear?
• How can purchases of products created based on an industrial design within the metaverse be regulated?
• How can liability limits be enforced in relation to associations of industrial designs with other intellectual property rights in products traded in the metaverse? How should partnerships be negotiated in this regard?
• How can acts of counterfeiting and unfair competition be monitored and minimized within a reality that can conflict with similar situations in the real world?

It may seem complex, and in fact, it is. The range of possibilities and legal concerns is extensive, as we still do not have many answers (nor specific regulations) for commerce in this type of virtual environment.

Nevertheless, certain discussions regarding this cross-border virtual reality are not entirely new to some sectors. The electronic games industry – which today accounts for a significant portion of global revenue – has been experimenting with different nuances of intellectual property protection for some years now.

In Brazil, intellectual property protection linked to electronic games is generally addressed within the copyright system, due to the wide variety of products that can feature within a game. However, the issue can still be discussed within the context of intellectual property. Industrial designs, for instance, can usually be directed at accessories that enable gameplay, such as controllers, consoles and portable devices, as well as other items developed exclusively for the digital environment.

Although both are under the framework of intellectual property, industrial designs and copyrights refer to different contexts. While copyright protection does not require registration, the State’s protection over industrial designs has more restrictive time-related and territorial limitations – possibly implying, for example, the exclusive right to commercially exploit a product within a certain territory.

For a product originating from an industrial design to be correctly commercialized (either by sale or by license), it must have been duly registered as such. On the other hand, Authorial works are subject to less objective criteria. As such, the development of exclusively digital products bought and sold only in the metaverse leads to questions regarding the limits of their use by consumers. Another sensitive question also emerges – 3D printing.

Industrial design and 3D printing

There is enormous potential to develop a multitude of new products with 3D printing technology, from small medical tools for hospitals to entire fashion collections.

In considering industrial designs together with 3D printing and the metaverse, there is the potential for a scenario where instead of buying a shoe at a store, consumers would be able to simply compare digital representations of the product in the metaverse. Thus, they could buy the shoe’s design or obtain a one-time printing license for private purposes before printing the product in their own homes with a 3D printer.

Within this hypothesis alone, the relationship between ownership, liability and licensed entities with respect to intellectual property is potentially quite extensive. It would be essential for consumers to consider whether the personal use of their 3D printers is authorized for any type of printing, and how to control this from a contractual, legal and technical point of view. Moreover, it would be necessary to understand what constitutes private use, whether licenses for such printing are required, and whether the possibility of industrial application exists – and if it does, whether the original right of the designer or titleholder would be infringed.

The additive manufacturing of protected works and products in the context of the metaverse remains a relatively new topic. There are numerous gray areas regarding intellectual property, especially whether there is a need for legislative and interpretative changes, or simply just practical measures to restrict the use of protected products and control 3D printing.

In the absence of specific regulation, applying fundamental principles linked to this area of law is important, considering concepts and experiences familiar to the public. One example regards purchasing a license to privately exhibit a film, known to many simply as “buying a DVD”.

Furthermore, while certain questions remain unanswered, keeping track of legal developments, debates and learning from practical models and parallels that emerge along the way are still useful alternatives. A proactive approach and certain good practices are key to trying to foresee future practical and regulatory obstacles for industrial designs in the metaverse, without hindering social and technological development in this area.

For further information, follow Mattos Filho’s special series Intellectual Property and the Metaverse.

*With the collaboration of Nathalia de Assis Siqueira.