We invite you to read the opinion column written by our associate from the IP, Tech and Data group, Fernanda Rodríguez, for América Retail, where she addresses the protection of intellectual property rights in the virtual world.
In the amazing world of the metaverse, different debates have arisen about the protection of intellectual property rights in the virtual world. A case that illustrates this is that of the renowned Spanish clothing brand, Mango, which exhibited different works of art in a virtual museum on Decentraland, a prominent blockchain and metaverse platform where players participate in a 3D virtual world.
In 2022, Mango announced its plan to bring physical works of art, belonging to one of the Mango Group companies, to the virtual world of Decentraland. The intention was clear: expand its presence to the digital world and provide an experience that combined fashion and art in a virtual space. However, this project soon became embroiled in a legal conflict.
The Visual Entity for the Management of Plastic Artists (VEGAP) filed a lawsuit against the fashion store, arguing that Mango did not obtain authorization from either the original authors of the works of art or the heirs of their rights to transform these works into NFTs, non-physical assets used in the blockchain world. In this sense, it alleged that this infringed the moral rights (of integrity and disclosure) and the economic rights (of reproduction, transformation and public communication) that the authors have over said works.
The dispute raises crucial and interesting questions about intellectual property in the metaverse: to what extent do the rights of the owner of a work extend when they are exhibited on these types of platforms? On the one hand, VEGAP maintained that copyright transcends the medium of exhibition and that any reproduction, even in the virtual realm, requires the consent of the creators or their heirs. From this perspective, the conversion of original works into NFTs would constitute an infringement of intellectual property rights.
On the contrary, Mango argued that, by owning the physical works, it had the right to use them as it saw fit, including displaying them in the metaverse. From her perspective, the digitization of the works was a natural extension of their ownership, that is, a harmless use, which did not cause any harm to the authors, and therefore did not require authorization. Likewise, they argued in the trial that the NFTs object of this lawsuit are digital files that were never converted into blockchain assets, so they can only be viewed through the platform, but cannot be downloaded, acquired or reproduced.
Without prejudice to the above, the Spanish Court established that the Mango store created a new work derived from the pre-existing ones, so there could have been no reproduction of the original work, but only a transformation, since, by converting them into digital works, a new creation endowed with originality was made. Along these lines, the ruling established that, when a different work was created, there could not have been a reproduction of the previous work. Therefore, in the present case, the Spanish Court only evaluated the economic right to transform the work, together with the right to public disclosure and communication.
Firstly, it is established that there has been no impact on the right of disclosure, since the authors had already decided how and when to disclose their work for the first time, thus exhausting that right. Therefore, it cannot be said that there has been an impact on the right of disclosure in this situation.
Secondly, it is established that there has been no impact on the right of public communication, because when a work is transferred to a third party, the owner of the support of the work has the right to display it publicly, unless the author has expressly excluded this right at the time of sale or if the exhibition negatively affects the honor or reputation of the author.
The above does not occur in this case, so it is understood that Mango retains the right to publicly communicate the works that were transferred to it, in addition to the fact that said exhibition was carried out with due recognition of the authors of the original works.
However, the central point focuses on how the Spanish Court decides on the right of transformation. In this case, the doctrine of fair use of common law applies since it is highlighted that the exhibition of the works by the Mango store did not have commercial purposes, being limited exclusively to the exhibition in the physical store and the visualization on the platforms. of the metaverse, respecting the authorship of the works at all times.
Along these lines, it is important to mention that the doctrine of fair use, developed in the common law system, was created with the purpose of providing greater flexibility to copyright. Under this doctrine, the use of works protected by copyright is permitted without the need to obtain the explicit authorization of the authors, as long as the requirements established by the Law are met.
Therefore, fair use is not limited to specific or previously defined uses, but covers a variety of uses, as long as a fair, legitimate and harmless use is made of the works that are protected by copyright.
Unlike that, in the continental copyright system, there is no fair use system, since the exceptions are exhaustively mentioned in the Law. In Chile, regulation No. 17,336 on Intellectual Property specifies an exhaustive list of activities that are permitted and that copyright limits are limited.
By simply reading the legislation, one should be able to clearly determine whether a particular action is covered by an exception or not. Therefore, in our country, there are circumstances strictly established in the law in which the use of other protected areas does not require authorization from its owner, which clearly differs from common law.
Therefore, in this case, the Spanish Commercial Court applied the doctrine of fair use, mentioning that the exhibition was not for profit, that is, the Mango store did not obtain any economic benefit, added to the fact that at all times it mentioned and recognized to the authors of the works. In this way, the resolution establishes that the fashion store has not infringed the intellectual property rights of the authors by exposing its collection of paintings in the metaverse.
On the other hand, the discussion about whether displaying said works in the Metaverse affects copyright is a complex issue that has generated various debates in the legal field. The Mango versus VEGAP case highlights the urgent need to establish legal clarity around intellectual property in the metaverse. As more companies and artists explore the possibilities of the virtual world, it is crucial to define the boundaries and regulations that protect the rights of creators of intellectual works. Above all, when considering the increasing number of artists who market their works in the virtual world.
The conclusion reached in this case could be a reference in potential situations of this nature that arise in Chile. It is important to visualize international cases since they will begin to set the course for copyright protection on this type of platforms.
Column written by Fernanda Rodríguez, member of the IP Tech and Data group.
