Metaverse, along with blockchain and crypto, is one of the key digital trends of 2022. So much so that Facebook recently rebranded into “Meta” in October 2021 to reflect its focus on this key trend.
The term metaverse has no clear meaning but it is often used to talk about the convergence of various technologies (e.g. AR/VR and games), in the future, to create digitally immersive experiences, which may or may not involve the use of decentralized technologies such as blockchains.
Meanwhile, blockchain and crypto enthusiasts have rebranded the term blockchain and crypto to the term “Web 3.0” in order to explain the increasing number of use cases for blockchain technologies beyond cryptocurrencies (e.g. non-fungible tokens (NFTs), being blockchain-based tokens that provide digital identification of an asset associated with the NFT).
The Sandbox (a play-to-earn game, with blockchain elements) is arguably an example of this combination of digital immersive experiences, Web 3.0 and blockchains.
In order to participate in the game users need to integrate their blockchain wallet with The Sandbox platform and buy the SAND token (a blockchain-based token that can be earned by users in-game or purchased via crypto exchanges such as Binance or Kraken). SAND operates as an utility token (i.e. its ownership gives the right to use various functionalities of The Sandbox).
Users use SAND to buy LAND, to buy or make ASSETs, to play certain games on LAND where the user charges for entry. SAND also acts as a governance token allowing SAND owners to vote on changes to the Sandbox platform.
Lots of brands are considering buying LAND and/or otherwise participating in The Sandbox platform. This includes licensing of their IP (e.g. trademark) to other users so that such other users can create ASSETs associated with such trademark. It can be done e.g. to enhance LAND with alternative creative content. When doing so the licensor should consider whether the ASSET associated with the trademark will merely be used by the licensee for use with the relevant LAND (as set out in the licence agreement) or whether the ASSET associated with the trademark can also be uploaded to the Sandbox Marketplace for selling to other users.
If the latter occurs then this means that an NFT will be implemented on the Ethereum blockchain.
Every NFT includes the address of the smart contract used to mint the NFT and a TokenID. This pair of data must be globally unique and is recorded in an immutable way in the blockchain. The Sandbox platform gives the possibility to add additional information (metadata) that can be edited by a user. Such metadata can include some extra information about the NFT and a graphic representation of the ASSET.
The licensor should check that the trademark itself is not permanently recorded in the data included in the NFT. Otherwise the risk is the trademark becomes linked to the ASSET in perpetuity and then the licensor may have difficulties removing the trade associated with the NFT/ASSET in circumstances where the underlying licence agreement is terminated.
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Jun 02 2023
Jun 01 2023