COPYRIGHT PROTECTION IN THE METAVERSE

Technology has always been at the heart of enhancing human communication. Fifty years ago, it would have been much more difficult to access information about a company in the USA, for instance, from Nigeria, but today that information is made available and accessible easily on the internet. Technology evolves every day with the introduction of new payment system technologies, advanced artificial intelligence to help solve human problems, and most recently, the metaverse.  As technology evolves, the laws that regulate it must evolve, and actions taken in the virtual space will have an impact on our physical world. The concept of the metaverse is relatively new in the Nigerian technological space; however, a Nigerian company, Vault Hill is already leading the race and has created its own metaverse.

What is the Metaverse?

The metaverse is a virtual-reality space where users can interact through their avatars and perform different activities ranging from selling of cryptocurrencies on the blockchain to minting of non-fungible tokens using smart contracts. Users within that space create original content or share content that may be susceptible to copyright protection.   In this virtual reality space, users can socialise, interact, play and purchase virtual properties and products.

The term “metaverse” originated in the 1992 science fiction novel “Snow Crash” as a combination of the words “meta” and “universe.”[1] Recently, interest in the metaverse’s development has been influenced by Web3.[2] Web3 means the World Wide Web which incorporates concepts such as decentralisation, blockchain technologies and token-based economies.

There are two main types of structured, existing metaverses:

• the centralised or closed metaverse, where one company manages all the aspects related to this metaverse: and
• the decentralised or open metaverses, where rather than centralising the activity in a single company, the functions are decentralised to users who are able to create their own digital world, by minting their own NFT’s, purchasing virtual products or properties, visiting and interacting with other avatars. The rights in the elements created in a decentralised metaverse remain with the creators or users.

The protection of computer programs or software by copyright is covered in the WIPO Copyright Treaty, which is a special agreement under the Berne Convention for the Protection for Literary and Artistic Works, an international agreement governing copyright. Nigeria is a signatory to this Convention. The Convention introduced the concept that a copyright exists the moment any work is fixed or finished, rather than requiring registration. It enforces a requirement that countries signatory to the Convention accept and recognise copyrights held by citizens of all parties to the Convention. Literary works protected by the Berne Convention include computer programs, artistic works or program designs created in the metaverse. These works are under copyright protection.

Computer programs are used to create virtual reality worlds. These programs are based mostly on codes and encryptions. The source codes for these programs can be protected by copyright law. Notwithstanding the fact that these software applications or computer programs are designed for use in the metaverse, there are no additional specifications to be observed as the same rules that apply to the programs to be used in the metaverse also apply to computer programs in the physical world.[3]

What are Non-Fungible Tokens (NFTs)?

An NFT is a record of ownership of a specific/unique digital asset, such as an image, audio or video file or a digital image of a real-life art, stored and authenticated on a blockchain.[4] The rights attached to ownership of each NFT vary considerably from a simple, non-exclusive, non-commercial licence to the display of the digital asset publicly. An NFT undergoes the process of creation through minting and after it is minted, it is sold through smart contracts as evidence of ownership. For an Individual to successfully mint an NFT, you must have a digital wallet. Currently, NFT owners can display their NFTs only on their digital wallets. NFTs on the metaverse provide a use-case for individuals to own or trade in cryptocurrencies, since NFTs can be purchased with a cryptocurrency. It is worthy of note in Nigeria that the Central Bank of Nigeria prohibits the dealing in cryptocurrencies or facilitating payments for cryptocurrencies exchange by banks and other financial institutions in Nigeria. The CBN’s decision is informed by the belief that virtual currencies are traded on exchange platforms that are largely unregulated. This notion is becoming increasingly unpopular because; although the virtual space is made up of decentralised systems that no one country has regulatory control over yet, there are frameworks being put in place to regulate the operation or use of these virtual currencies in the metaverse. A good example is the NFT marketplace that regulates the use of NFTs in the metaverse.

Copyright In the Metaverse

In Nigeria, literary works, which include computer programs, musical works and sound recordings are protected under the Copyright Act Cap. C28 Laws of the Federation 2004. The Berne Convention for the protection of Literary and Artistic works and Sections 1 and 51 of the Copyright Act protects original artistic works created or hosted in the metaverse, and computer programs running the metaverse. The metaverse seems to test the elasticity of copyright laws, both international and local. Copyright in the metaverse cannot be fully discussed without NFTs.  Original copyright works are being minted or created into NFTs sometimes even without the permission of the original copyright owner, which results in an infringement. These NFTs can include contractual terms found in smart contracts, which purchasers must examine to know what rights they are acquiring. For example, an NFT for a piece of art may only give ownership of its metadata and/or software code, rather than ownership of the copyright in the artwork that the NFT represents[5]. Copyright protects the original digital creation and grants its author some exclusive rights, for instance the right to copy or distribute the work. Therefore, the artistic work sold as an NFT can be eligible to be protected by copyright if it fulfils the established requirements, for example originality and creativity.

Copyright infringement in the metaverse can occur in two instances, mostly with NFT’s. The first instance is when a third party reproduces or shares original works created in the metaverse without permission. The second is when a third party introduces works generated outside the metaverse, i.e., from the real world, such as a painting or picture and shares or mints them in the metaverse without the permission from the copyright holder (or without benefiting from a copyright exception). For these cases of infringement, it is possible to take enforcement actions. However, the copyright holder can face some difficulties, for instance, when it comes to identifying the real identity of the infringer as the blockchain grants privacy[6].

When purchasing an NFT, in some cases, the user is acquiring ownership over the work (the artistic work) and the token (the metadata file), which includes the copyright. This means that there is a transfer of the copyright ownership from the seller to the purchaser.  In other cases, as the NFT is a combination of a digital work and a token, the purchaser obtains the ownership over the token -i.e., over the software code, rather than over the artistic creation per se. In such a case there would not be copyright assignment, but a licensing agreement between the parties that could be included in the smart contract on the blockchain.

Enforcement of NFT Infringement in the Metaverse

The metaverse is a decentralised space, and there is no uniform regulation for that virtual space. The exception is in the case of regulations mapped out by countries when it relates to their own jurisdiction or in a centralised virtual space like Sandbox, where the infringing material can be withdrawn or taken down. However, in a decentralised virtual space, the only regulator at the moment is the NFT marketplace platform. Copyright original owners can report to the NFT marketplace platform if their copyright has been infringed upon. The NFT marketplace platforms can de-list NFTs of plagiarized or infringed works. For buyers in the metaverse, there is no known remedy as of this moment for the purchase of a forged digital artwork. Buyers are advised to do thorough due diligence on the NFT sellers before purchasing NFTs.

Conclusion

The metaverse is a large virtual space and one of the issues it is facing is the issue of lack common regulation due to its decentralised nature, which is why some governments are still skeptical about its use. A uniform regulation will help attract more users and enforcement of copyright infringement will be much more easily implemented.

[1] Ball, Matthew (26 October 2022). The Metaverse: And How it Will Revolutionize Everything. Liveright Publishing. ISBN 978-1-324-09204-9

[2] Wikipedia, “Metaverse” available at https://en.wikipedia.org/wiki/Metaverse accessed October 26, 2022.

[3] Literary works (and, by extension, computer programs) are protected by copyright in Nigeria, according to Sections 1 and 51 of the Copyrights Act.

[4] Greg Ruback, Bristows LLP London, NFTs in the Metaverse

[5] Jake Palmer, Bristows LLP London, Copyright in the Metaverse

[6] European Innovation Council and SMEs Executive Agency (News Article) European Commission (27 October 2022).