Dr. Giedre NeverauskasThe automotive business Mercedes Benz is following the hype, moving towards the metaverse by filing trademark applications for ‘Mercedes Benz’, ‘Mercedes’, ‘S-Class’, ‘G-Class’, and ‘Maybach’ with the United States Patent and Trademark Office (USPTO) claiming, among various others, for the following goods and services:

  • Non-fungible tokens (NFTs), virtual goods incl. clothing and accessories, vehicle parts and accessories, vehicles (class 9);
  • Retail store services and marketplace services in relation to virtual goods (class 35),
  • Financial services and cryptocurrency trading (class 36);
  • Entertainment services, namely, providing online, non-downloadable virtual goods (class 41);
  • Providing online non-downloadable virtual goods (class 42).

Convergence between physical and digital: Phygital

The move towards the metaverse is in line with the brand strategy of other automakers, the fashion industry, and the art business. Ford prepares to enter into the metaverse with virtual automobiles and NFTs. FIAT opens a metaverse store with a metaverse-powered showroom for products, which is supposed to revolutionize customer experience and feature a natural person available to answer any customer question in real-time.

Prada has launched its Timecapsule NFT project. It is a limited-edition collection of shirts that come with a corresponding NFT. The NFT serves as an invitation to join Prada’s exclusive Crypted NFT community on Discord, members of which can access unique events and experiences organized by the brand (NFTEvening, December 29, 2022). Italian clothing company Diesel has partnered with blockchain start-up HAPE to launch an NFT collection, which shall offer collectors both digital and physical value. Forever 21 has expanded its Roblox affiliation by launching the F21 Metaverse Collection on its e-commerce site and in stores allowing purchase of digital fashion on Roblox (Glossy, December 5, 2022). A physical NFT shop in the Mall of the Emirates in Dubai was opened where customers can browse, buy, and sell NFTs in person. Others are creating malls in metaverses.

Balmain created a digital twin of the renowned mansion Villa Balmain in the metaverse and introduced it at Miami Art Basel (Rain, November 29, 2022). The renowned physical Villa Balmain was constructed on the Italian island of Elba in the late ‘50s by the Italian architect Leonardo Ricci. The digital twin was designed by Alexandre Arrechea, making it accessible and explorable as a museum and/or art gallery to more people independently of distance.

Advantages and numbers

The metaverse has opened a new communication channel for brands, independently of the brand’s level of fame. It is entertaining and enables community building which is the critical strategy in Gen Z marketing and beyond. The extended reality holds the potential of an extended phygital experience where physical and digital converge and complement each other. The development is not unfamiliar. The migration of activity from physical to online spaces has been taking place for decades. At the latest, during the pandemic, we have experienced the advantages of e-commerce. However, it does not mean that physical stores will become superfluous. Certainly, real-life physical experience is not replaceable, at least not shortly. Therefore, the convergence of both seems to be the future, the digital allowing to unlock the creative potential and to try out things.

Even if the technology around the metaverse is still emerging and the future is still being determined, as the current numbers show, it is and will keep being a new mass market for brands until the next disrupting technology shows up to amaze us.

A recent NFT Brand Case Study authored by Noah Levine (@kingjames23) on the blockchain analytics platform Dune has shown that leading fashion brands earned over 245 million dollars in NFTs sales (FashionUnited, 27 December 2022). Top brands in generating revenue out of NFTs are, among others, Nike (USD 185 Million.), Dolce & Gabbana (USD 25.6 Million), Tiffany (USD 12.6 Million), Gucci (USD 11.5 Million), and Adidas (USD 10.9 Million).

What do brand owners need to consider?

Brand owners should already be considering virtual reality and NFT trade platforms as possible trademark use “spaces”. It is worth working on strategy and protection for trademarks for virtual goods and services (the sooner, the better) and taking into account the possible new virtual use of brands when adopting their license agreements. Furthermore, trademark owners should become aware of possible infringements by monitoring and policing the use of their trademarks on these platforms. There is no centralized supervisor, even if the platforms provide the common “notify and take-down” procedures.

Written by Dr Giedre Neverauskas, Attorney at Law, LL.M., Blum&Grob Attorneys at Law Ltd.



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