Business

Nike wants to bring sneakerheads into Metaverse




Look at your feet. Many of you (raises his hand) is using Nikes right now. For the fiscal year ending May 31, 2021, Nike reported revenue increased 19% to $ 44.5 billion for the year. But it’s here. What about Metaverset?

Why Nike is interested in Metaverse

For those who are not yet familiar with the concept, the simplest – but very incomplete – way to imagine Metaverse is to imagine that you exist in a real video game. Nike goes in and gives really cool meta-things.

This is no joke. Nike is very serious about Metaverse.

Patent claims dating back to the pre-Metaverse universe in 2018 reveal that Nike has seriously stored the tools they can do business with in Metaverse. These digital tools will include sneakers, but also avatars and other forms of virtual branding. Sure, Nike intends to sell you digital products (and you want to buy them because Nike knows how to make you have them), but the meta-plan is all about digital worlds.

Is this just Nike as Nike? Sure, but if we choose to define it as creating net new revenue streams, as it has done throughout history, then that’s fine. Some will own Metaverse swag, and it could just as easily be Nike.

Metaverse has rules that will be new to Nike

Nike must be prepared for the notion of destruction by duplication. In this temporal world, Nike has been very suing lately with its intellectual property (IP). Yet, in Metaverse, duplication will transcend our current perceptions of what is legal. The value of Nike’s metavars will certainly be influenced by what the company will consider pirates, but others will call artists.

In the real world, there’s a real art project called the Museum of Forgeries with significant commercial application. In short, the Brooklyn art collective Mschf bought an original Warhol for $ 20,000 and made 999 exact counterfeits. Then it mixed in the original and sold all 1000 “can be real” Warhols for $ 250 each for a total of $ 250,000, of which $ 230,000 is profit.

Related: Digital becomes physical: Top NFT galleries to visit in person in 2021

The same will happen in Metaverset. Some rare Nike drops (what we sneakerheads call a new release 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 either conscious or unconscious. fake.

Metaverse is new to the courts

As for how the courts will ultimately handle these metaverse disputes, Samir Patel, a Miami lawyer and a nominee for the Miami-Dade Cryptocurrency Task Force, recently tweeted:

I talked to Patel about the realities of the new Metaverse and how it will be a quick, tough discovery when judges realize that precedent for ordinary law will be more of an obstacle than a help in deciding Metaverse cases. As Patel said:

“Legal doctrine such as property rights, violations of wet contracts and copyright infringement of human-derived work will govern the conditions in the metaverse (MV).”

He continued: “So, when Nike wants to participate in MV, whether it is with virtual store fronts, equipment for avatars or creating new products exclusively for MV, then the lawyers have to build a connection between MV’s legal violations or claims and meat place.”

Just the fact that few judges (and very few lawyers) have used or even heard the term “meatspace” is in itself a problem. The term refers to our physical world, as opposed to cyberspace or a virtual environment like Metaverse.

So, yes, Metaverse’s claims have to be downplayed by judges, at least initially written in such banal ways, using such traditional language that judges do not get lost.

Can Nike Help Build a Metaverse Legal Structure?

Patel sees a real opportunity here. “Nike has the resources to train judges through litigation because they can afford to pay their lawyers to sue, but other smaller plaintiffs would have a hard time convincing a judge that they own virtual property located in a virtual land registry,” maintained by a decentralized blockchain, “he said.

Patel explained to me that if he were to buy virtual land in Metaverse, the judge would probably view the transaction as a sale of goods and not a transfer of property. Because statutory regulations do not contain or maintain the concept of virtual property, this virtual land cannot be registered in a virtual cadastral register because that register is not controlled by a municipality or sovereign.

“So, if Nike were to sell a pair of virtual sneakers but not deliver the sneakers to the buyer, then there is a breach of contract when selling sneakers. But the negotiated exchange of value will still have to be articulated and possibly recorded in meatspace,” Patel explained.

What this will mean in practice is a mystery to judges, where there is no evidence that a contract has been entered into in Metaverse, for example a verbal contract entered into by two avatars. So, how can a judge assign a side in this dispute? It’s exactly the same as a verbal contract done in meatspace. If an avatar can prove dependence on the verbal contract in Metaverse, much like they might be able to do in meatspace, then there may be evidence to support a plaintiff’s claims.

Related: To work for everyone, Metaverse needs to be decentralized

Metaverse can be as legal as meatspace

And there are going to be a lot of claims. If Nike has a problem with their creations being modified in meatspace without their permission and defendants in Nike lawsuits boldly answer that modifications are art, not IP theft, just imagine Metaverse. Patel notes:

“IP laws will be tested in MV if artificial intelligence is used to create landscapes or other virtual objects.”

He added: “It’s because AI-derived work is not covered by US copyright laws. So if I were to distribute AI in MV and AI creates something amazing, I have zero rights to the derivative work, and someone else can imitate the work. and claim copyright for themselves. It will be extremely difficult to protect one’s copyright because MV can be so large and the infringer can be an AI-deployed entity. Judges will address these issues by using copyright law. “

This gives us the only viable way to change how judges view and decide cases in Metaverse: by changing our existing laws to accommodate virtual reality. Without this change, seen through the eyes of judges, all flesh and virtual reality does not exist as a legal reality.

The true legal reality, as Patel pointed out, is that “Nike would be wise to hire lawyers who are well-versed, and I mean really well-versed, in real estate, the Uniform Commercial Code, as well as experts in blockchain technology.”

With Metaverse providing a new virtual world of opportunities to create, sell, buy and sue, it becomes fascinating to look through social, commercial and legal lenses. Just the fact that Nike has got ready to create, sell and sue in this new space means that you should also get ready for the reality of Metaverse, which will soon be coming to a computer or phone near you.

This article does not contain investment advice or recommendations. All investment and trading movements involve risk, and readers should conduct their own research when making a decision.

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

Aaron Solomon is a senior legal analyst at Esquire Digital and has taught entrepreneurship at McGill University and the University of Pennsylvania. Solomon was named Fastcase 50, and recognized the top 50 legal innovators in the world. His work has been featured in CBS News, CNBC, USA Today, TechCrunch, The Hill, BuzzFeed, Fortune, VentureBeat, Yahoo! and many other leading publications.