As far as trends go, it’s clear Bill Gates is not on board. The Microsoft billionaire said non-fungible tokens (NFTs) are “100% based on greater fool theory“, preferring asset classes “like a farm where they have output, or like a company where they make products”.

Gates may be right, but this issue covers NFTs and the metaverse anyway because they are causing real-world IP disputes, being held in bricks-and-mortar courts, with clients paying legal advisors in US dollars, not Bitcoin.

Some lawsuits are arguing that trademark protection can be extended into the virtual. It is a “zone of natural expansion” for existing marks, they say. We will soon discover whether this is true and whether IP law will cope.

As William Stroever of Cole Schotz says (page 5): “Our IP framework has withstood the onslaught of technology so far and will continue to do that.”

This was backed up by a New York federal court that ruled the Hermès’ ‘MetaBirkin’ suit should be tested against the trademark precedent set in Rogers v Grimaldi back in 1989.

It’s an interesting coincidence that 1989 was the year Tim Berners-Lee invented the world wide web, although I’m not sure he had a cartoon ape sold for 769 Ethereum in mind.

The MetaBirkin case could turn out to be historically significant. If the defendant’s argument that ‘it’s only an artwork’ succeeds (which seems unlikely), expect to see consternation among fashion executives and a tidal wave of metaproducts to follow.

“Just as brands were unsure whether to invest in internet endeavours and domain names in the 1990s, we may be at the watershed moment for NFTs and the new virtual marketplace,” wrote Sarah Kelleher and Cynthia Walden of Fish & Richardson, in WIPR recently.

Brands are unlocking the door to an entirely new market and discovering the virtual has consequences—it’s going to be quite the ride.