This is written by by Joelle Sfeir. She is content writing intern at Legal Thirst.
Table of Contents
Introduction
Reaching out for Metaverse might be considered a more intricate, technically complex, but seemingly fair advancement in today’s world, where meetings, convocations, gatherings, classrooms, and other activities have gone online. It was not an overnight phenomenon; rather, it evolved over the course of two to three decades.[1] During the 1990s, India reached notable growth in the field of digitalization as a result of liquidation, privatization, and globalization, and the entrance of the digital era brought in new views.[2]
Without a doubt, this new technology will have a tremendous impact on our society. The Metaverse, like any other innovation, is not without its legal ramifications.[3] The article explains what the Metaverse is and how it can affect certain areas of law.
What is Metaverse?
It’s worth noting that there is no universally accepted definition of the ‘Metaverse.’ The phrase “metaverse” was first used in Neal Stephenson’s iconic cyberpunk novel Snow Crash, published in 1992. [1] The Metaverse (always capitalized in Stephenson’s fiction) is a shared “imaginary realm” that is “made available to the public across the worldwide fiber-optics network” and projected onto virtual reality goggles, according to the book.[4]
Even before the phrase was coined, there had been various attempts to create metaverses.[5] Second Life and other virtual worlds allow users to live a life that is different from their own, with different vocations, goals, and experiences. Another game, VR Chat, makes use of virtual reality headsets to allow users to engage with their in-game avatars.
The Metaverse is a programming tools used in tandem to create the illusion of a credible reality in a virtual world. It is not limited to a single virtual location or universe. Virtual Reality (VR), Augmented Reality (AR), cryptocurrencies, NFTs, and other technologies are among them. And, given the rapid evolution of technology, the Metaverse has surely established a legal interface.[6]
This concept has been taken to the next level in a number of situations. Games’ work on Fortnite, Microsoft’s work on Minecraft, Facebook’s work on Horizon, or whether it’s Live Maps or Magic Leap, the world has been blown away. In terms of consumer brands, the Metaverse is the “next big thing” that will determine how they connect with their customers. Everything, including brands and branded products, will be virtual and fictional in the Metaverse. A sequence of interconnecting worlds would be the ultimate Metaverse.[7]
First, there is presence; second, there is interoperability; and third, there is standardization.[8]
Presence refers to a sense of embodiment or being there with others in a virtual world, while interoperability refers to moving around in the digital realm and among virtual items with ease. Interoperability isn’t a new concept; in fact, it’s becoming more frequent as we see avatars in Zoom meetings and virtual products like bitcoins. The third pillar, standardization, enables interoperability of platforms and services across the Metaverse.[9]
Roblox, for example, was released in 2006 but was much ahead of its time. It’s essentially a virtual platform where players can earn real money by creating their own game and exchanging virtual currencies known as Robux. It’s no longer just a game, and a flagrant development in today’s world.
The most important move was Nike’s declaration of their cooperation and the launch of a virtual store named ‘Nikeland'[10] in Roblox, or the unveiling of the NFL (National Football League) Store[11] in Roblox’s virtual area. Linden Lab introduced Second Life in 2003, allowing users to build an avatar that can accomplish practically anything a human can do in the real world. People in Second Life can communicate electronically with one another, express themselves through music and art, attend concerts, hold meetings, and even start a virtual embassy. The Maldives was the first country in Second Life to open a virtual embassy.[12]
Link between Metaverse and Human Rights in general
As much as metaverse remains a key component of our everyday lives, it also affects our basic and fundamental human rights and sometimes without our knowing.[13]
The ideal configuration would be to use existing legal concepts to safeguard rights and impose liability. Property rights, theft, and intellectual property law would all be involved if an avatar stole a digital ‘Gucci bag’ in the’metaverse.’ If a real-world person or company loses money or their reputation, there is a case to be made that these are legal issues with enough substance to merit a real lawsuit in a real court of law.[14]
As the metaverse develops and jurisdictional challenges relating to finding the appropriate forum to resolve potential disputes become clearer, it is possible that an international metaverse law might be formed to address these concerns.[15]
So what areas does metaverse weights its consequences on?
Metaverse and Intellectual Property
Virtual Reality (VR) and Augmented Reality (AR) are being used by artists to produce unique artworks that have never been seen before. These artists’ works are unquestionably unique, and they ought to be protected under intellectual property law.
Non-fungible tokens serve as a bridge between IP law and the Metaverse (NFTs). “Non-fungible tokens are cryptographic assets on a blockchain that are distinguished from one another by unique identification codes and metadata.”[16] An NFT is a digital asset that represents real-world elements such as art, music, video, and in-game stuff. NFTs are commonly purchased and sold online using cryptocurrencies, and they are encoded using the same software as several cryptocurrencies.[17] The premise is in the name: it’s a non-fungible token, which means it can’t be exchanged for money.
In India, the definition of a ‘Virtual Digital Asset’ (VDA) has been inserted in Chapter 3 of the Finance Bill, 2022.[18] There are concerns about the regulation of NFTs in India because the legal nature of VDAs is uncertain.
Thousands of dollars have been spent on various photographs and videos of NFTs in the news. And this is when the problems begin to emerge. If an image’s artist builds and launches an NFT of the image, the NFT’s owner will only own a copy of the image. Intellectual property rights do not come standard with NFTs. The ownership of an NFT differs from the ownership of the underlying work on which the NFT is built.
Metaverse and Privacy/Security
Our generation’s most brilliant technologists have big aspirations for the Metaverse. The goal is to build a virtual environment in which a person may totally immerse oneself and experience things that were previously unimaginable.
While this concept may appear to be a modern utopia, it is not without its flaws. The most common objection to the Metaverse is that it infringes on a person’s right to privacy. Major corporations and social media sites already have access to the majority of a person’s data, and skeptics fear that integrating with the Metaverse would push us beyond our comfort zones.
Currently, once we start an app, we usually allow it access. Privacy policies have gotten so obfuscated that simply visiting a website might be construed as implied agreement for access to one’s personal information. It’s scary to think about how far these policies would go in a future where virtual reality is a part of our daily lives. There could be gadgets that map brainwave patterns, scan a person’s retinas while wearing a headset, and give them complete control over their virtual life.[19]
In 2060, a person may be happily living their virtual life, unconscious that Big Data is watching their every step, waiting for them to do anything that would allow them to be targeted with relevant adverts.
The foregoing risks are amplified if a corporation creates a semiconductor in the future. Hacking Facebook accounts is frequent, and the potential of a brain-linked chip being hacked isn’t out of the realm of possibility. This issue is no longer a work of fiction, as technology is already being developed to address it.
What kind of data may we collect if we enter a virtual world? Who has the authority to make such a decision? Is consent obtained through strategically placed privacy policies considered informed consent? Who is responsible for enforcing data privacy laws? How can people be safe from cyber-attacks?
[1] Vijay Pal Dalmia, “India: Metaverse: Indian Law & An Intricate Controversial Universe”, 23 December 2021, https://www.mondaq.com/india/fin-tech/1142640/metaverse-indian-law-an-intricate-controversial-universe
[2] Ibid
[3] https://legalserviceindia.com/legal/article-8439-metaverse-and-the-law.html
[4] https://link.springer.com/article/10.1365/s43439-022-00056-9
[5] Ibid
[6] https://legalserviceindia.com/legal/article-8439-metaverse-and-the-law.html
[7] Vijay Pal Dalmia, “India: Metaverse: Indian Law & An Intricate Controversial Universe”, 23 December 2021, https://www.mondaq.com/india/fin-tech/1142640/metaverse-indian-law-an-intricate-controversial-universe
[8] What is the Metaverse? Rabindra Ratan, Yiming Lei, Science and Technology, Down to Earth, https://www.downtoearth.org.in/blog/science-and-technology/what-is-the-metaverse-2-media-and-information-experts-explain-79993
[9] https://www.mondaq.com/india/fin-tech/1142640/metaverse-indian-law-an-intricate-controversial-universe
[10] https://www.roblox.com/games/7462526249/NIKELAND
[11] NFL enters Roblox Officially through its virtual Store, Sportsmedia, 29 November, 2021, https://www.sportspromedia.com/news/nfl-roblox-melon-metaverse-nft/
[12] Maldives Opens Virtual Embassy, Hindustan Times, 23 May, 2007, https://www.hindustantimes.com/world/maldives-opens-virtual-embassy/story-ywfNCEGWBvQNYrEpI72DiP.html
[13] https://legalserviceindia.com/legal/article-8439-metaverse-and-the-law.html
[14] Tania Su Li Cheng, “A Brave New World for Intellectual Property Rights” (2006) 17 Journal of Law, Information and Science 10.
[15] Bettina Chin, “Regulating Your Second Life: Defamation in Virtual Worlds” (2007) 72(4) Brooklyn Law Review 1303, 1315.
[16] https://www.investopedia.com/non-fungible-tokens-nft-5115211
[17] https://www.forbes.com/advisor/investing/cryptocurrency/nft-non-fungible-token/
[18] https://www.indiabudget.gov.in/doc/Finance_Bill.pdf
[19] https://www.nortonrosefulbright.com/en-us/knowledge/publications/5cd471a1/the-metaverse-the-evolution-of-a-universal-digital-platform#section3
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