China: Design Patents and the Metaverse

By: Paolo Beconcini and Elisa Li (Squire Patton Boggs)

The concept of Metaverse as an online framework for economic interoperability was born in and around 2020. Since then, giant companies all over the world ― especially in the IT, entertainment and fashion businesses ― have begun to launch products and solutions related to the ever developing Metaverse. Fashion brands, artists and entertainers, among others, have started focusing on producing digital work that is revolutionizing the way we perceive art, through the creation of NFTs and commodities. The latter, in particular, are assuming the form of non-physical goods that can be transacted and used in this totally immersive internet through Virtual Reality and Augmented Reality tools and devices, and many consumer brands are entering the Metaverse through gaming, social networks and virtual commerce.

In order to safely and effectively enjoy the economic benefits deriving from the use of their brands’ goodwill and product reputation in the Metaverse, businesses need to secure the appropriate IP rights. Fashion brands, for example, are filing trademark applications in the US, Japan and the EU to secure protection for the use of their brands on digital projections of their apparel, shoes and accessories that are transacted in the Metaverse. Other countries are lagging behind. China in particular, struggles in adapting and coping with the ever increasing need of both foreign and Chinese brands to obtain suitable trademark protection. The Chinese trademark system is in fact characterized by first-to-file and strict formalism in the selection and classification of goods and services. Without a formal update of the Chinese classification of goods and services that incorporates goods and service standards specifically aimed at the Metaverse, it is difficult for right holders to be able to create a trademark portfolio consistent with their global filings in the other major jurisdictions, where changes have already occurred to accommodate the needs surrounding the Metaverse. We have specifically covered this topic in a previous blog.

While trademarks protect the brands used in the metaverse and copyright protects NFTs as intellectual works, what about the protection of the shape, patterns and colors characterizing the non-physical commodities in the metaverse? Are they protectable by design patents? In this post we will analyze the availability of design patents for digital commodities and how it compares with other Asian countries like Japan, South Korea and Singapore.

Overview of current legislation in China

Article 2.4 of the Patent Law of the People’s Republic of China in its 2020 amended version defines design as a new design of the shape, pattern, or a combination thereof, as well as a combination of the color, shape, and pattern of the entirety or a portion of a product, which creates an aesthetic feeling and is fit for industrial application. The question is whether “product” that is “fit for industrial application” includes non-physical goods such as digital commodities conceived for use in the Metaverse as well…

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