Just buy it: Nike wants to bring sneakerheads into the Metaverse

Look at your feet. Many of youraise your hand) are wearing Nike right now. For the fiscal year ending May 31, 2021, Nike reported its revenue increased 19% to $ 44.5 billion for the year. But that's here. And in the Metaverse?

Why Nike is interested in the Metaverse

For those who are not yet familiar with the concept, the easiest, albeit highly incomplete, way to imagine the Metaverse is to imagine yourself existing in a real-life video game. Nike comes in and provides very cool meta-things.

This is not a joke. Nike takes the Metaverse very seriously.

Patent applications dating back to the pre-Metaverse universe in 2018 reveal that Nike has been seriously stockpiling the tools with which it can do business in the 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'll buy them because Nike knows how to make you want them), but the metaplan revolves around entire digital worlds.

Is it just Nike being Nike? Sure, but if we decide to define that as creating new streams of net income, as it has throughout its history, then fine. Someone is going to own the Metaverse loot, and it might as well be Nike.

The Metaverse has rules that will be new for Nike

Nike needs to be prepared for the notion of destruction by duplication. In this temporary world, Nike has been very litigious lately with your intellectual property (IP). However, in the Metaverse, duplication will transcend our current conceptions of what is legal. The value of Nike's meta-merchandise will be absolutely affected by what the company would consider pirates and others would call artists.

In the real world, there is a recent art project called the Museum of Counterfeiting with significant commercial application. In short, the Brooklyn art collective Mschf bought an original Warhol for $ 20,000 and made 999 exact fakes. He then mixed up the original and sold the 1,000 "could be real" Warhols for $ 250 each for a total of $ 250,000, of which $ 230,000 is profit.

Related: Digital Gets Physical: The Best NFT Galleries To Visit In Person In 2021

The same will happen in the Metaverse. Some rare drops of Nike (what we sneakerheads call a new release of a shoe or even a color, known as a "color combination", of a shoe) will be real, some may be real and some will be, consciously or unconsciously, false .

The Metaverse is new to the courts

As for how the courts will eventually handle these metaverse disputes, Samir Patel, a Miami attorney and appointee to the Miami-Dade Crypto Task Force, recently tweeted:

Developers who think their inventions circumvent the law completely overlook a judge's lack of knowledge of blockchain technology. Judges judge by what they know, not by what you know. https://t.co/QDnLihGu9e

- Samir Patel (amSamirPatelLaw) October 26, 2021

I spoke with Patel about the realities of the new Metaverse and what a quick and severe discovery will be like when the judges realize that the common law precedent will be more of an obstacle than a help in deciding Metaverse cases. As Patel said:

"Legal doctrine such as real property rights, wet contract breach, and human derivative work copyright infringement will govern relationships in the metaverse (MV)."

He continued: "So when Nike wants to participate in the MV, whether it be with virtual storefronts, avatar gear or create new products exclusively for the MV, then their lawyers must build a nexus between MV legal infringement or claim and space for meat. ".

The fact that few or no judges (and very few attorneys) have used or even heard the term "meat space" is in itself a problem. The term refers to our physical world, as opposed to cyberspace or a virtual environment like the Metaverse.

So yes, the Metaverse claims will need to be simplified for the judges, at least initially written in such mundane ways, using such traditional language, so that the judges don't get lost.

Can Nike help build a Metaverse legal structure?

Patel sees a real opportunity here. “Nike has the resources to educate judges through trial because they can pay their attorneys to prolong the litigation, but other smaller petitioners would have a hard time convincing a judge that they own virtual property that exists in a registry of virtual property, maintained by a decentralized blockchain, ”he said.

Patel explained to me that if I were to buy virtual land in the Metaverse, the judge would likely view the transaction as a sale of property and not as a transfer of real estate. Because the statutory regulations do not contain or contemplate the notion of virtual real estate, this virtual land cannot be registered in a virtual cadastre because that registry is not governed by a municipality or sovereign.

“So if Nike were to sell a pair of virtual sneakers, but didn't deliver the sneakers to the buyer, then that's a breach of contract in the sale of sneakers. But the negotiated exchange of value will still have to articulate and possibly register in the meat space, ”Patel explained.

What this will mean in practice is an enigma for the judges, where there is no evidence that a contract was made in the Metaverse, such as a verbal contract entered into by two avatars. So how can a judge adjudicate one of the parties in this dispute? It is exactly the same as a verbal contract made in the space of the flesh. If an avatar can demonstrate their confidence in the verbal contract in the Metaverse, just as they can in the flesh space, then there may be evidence to back up a plaintiff's claims.

Related: To work for everyone, the Metaverse must be decentralized.

The metaverse can be as litigious as meatspace

And there will be many affirmations. If Nike has a problem with their creations being modified in the meat space without their permission and the defendants in the Nike lawsuits dare to answer that mods are art, not IP theft, just imagine the Metaverse. Patel noted:

"Intellectual property laws will be tested in the MV, if artificial intelligence is used to create landscapes or other virtual objects."

He added: "That's because AI derivative work is not covered by US copyright laws. So if I were to implement AI in the MV and the AI ​​creates something wonderful, I have no rights to it. the derivative work and someone else can imitate the work and claim copyright for himself. It will be extremely difficult to protect one's copyright because the MV could be very large and the infringer could be an entity implemented by AI. The judges will address these issues using meatspace copyright laws. "

This leaves us with the only viable way to change the way judges view and decide cases in the Metaverse: by changing our existing laws to accommodate virtual reality. Without this change, seen through the eyes of the judges, everything is real space 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 very well versed in real estate, the Uniform Commercial Code, as well as experts in blockchain technology. . "

With the Metaverse providing a new virtual world of opportunities to create, sell, buy and sue, it will be fascinating to see it through social, business and legal lenses. The very fact that Nike has been preparing to create, sell and litigate in this new space means that you must also prepare for the reality of the Metaverse, which will soon reach a computer or phone very close to you.

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