Metaverse: A Legal Primer for the Retirement Home Industry | Arnt Fox Chef

The metaverse is widely seen as the next frontier of digital commerce, with companies across industries spending millions of dollars to establish themselves as market leaders. While it presents clear opportunities for businesses, Metaverse also presents unique legal challenges. This alert highlights some of the key legal issues that all businesses should consider before making a decision.

What is Metaverse?

Metaverse is essentially the next generation of the Internet. Built largely on decentralized blockchain technology rather than centralized servers, it consists of immersive 3D experiences with dynamic digital markets, static and traceable digital assets, and a powerful social component. As consumers flock to Metaverse platforms and tech companies create the next generation of consumer electronics that will make the Metaverse more accessible, ways that Metaverse can help the retirement home industry are already beginning to emerge.

Feasibility study for the housing sector for the elderly

The metaverse provides unique opportunities for the senior living industry. Consider the virtual tour used in marketing efforts and re-envision it as an opportunity for organizations to provide potential residents with the opportunity to interact with the amenities and employees of the organization. At the most basic level, the ability to market the metaverse as a piece of equipment is valuable in and of itself. On a larger scale, this could lead to the development of a hybrid offer of home care and seniors, with the metaverse providing this community setting.

While the business opportunities are clear, the metaverse additionally offers the potential to improve resident care. For example, the Metaverse gives distant family members the ability to connect with residents in a more attractive environment than a phone call or video chat — an essential alternative in light of the social isolation issues highlighted by the pandemic.

Before embarking on the metaverse, companies should consider the following six legal questions:

  1. Take custody of digital assets. Due to their digital nature, digital assets such as cryptocurrencies and non-fungible tokens (“NFTs”) are particularly vulnerable to loss and theft. Before acquiring cryptocurrencies or NFTs, companies will need to create a secure blockchain wallet and adopt appropriate access and security controls.
  2. Set up a custom legal entity. Companies may consider creating a new subsidiary or subsidiary to hold digital assets, protect other parts of their business from adverse liability, and deal with potential tax consequences.
  3. Select the platform that is right for you. There are many metaverse platforms, and they all have trade-offs. Some, like Roblox, provide access to more consumers but generally give companies less control over the content of the software. Others, such as Decentraland and Sandbox, give companies greater control but a smaller audience and higher barriers to entry. Companies should consider their target audience and their long-term metaverse strategy before committing to a particular platform.
  4. Record your IP address. Companies should consider filing trademark applications that cover basic basic goods or services and secure all available areas of the blockchain, which can be used to facilitate metaverse payments and direct users to blockchain content. Such as websites and decentralized applications. Given the rapid adoption of blockchain domains as well as the limited remedies available for dispute resolution, we strongly encourage brands to consider securing IP rights now.
  5. Protect and enforce your IP. The decentralized nature of metaverse poses a major challenge to companies and intellectual property owners. Before engaging in any blockchain-based transactions, including buying or minting NFTs, companies must understand that content stored on the blockchain is permanently present and cannot be deleted. Restrictions on the use and resale of NFTs must be carefully considered and implemented before they are minted, because once the content is on the blockchain, there is no recourse.
  6. Metaverse Rights Reserve. Companies that license their intellectual property, particularly those that do so on a geographic or territorial basis, should review existing licensing agreements to determine the rights, if any, that the licensees have for the relevant uses. Going forward, we encourage trademark owners to expressly reserve your rights for uses relating to the Metaverse and to be careful before allowing a third party to publish your IP address on the Metaverse on your behalf.

Ready to enter?

The metaverse presents a huge opportunity for companies to communicate directly with consumers in an interactive way that was considered science fiction only a few years ago. But like every new front, technological or otherwise, there are legal and regulatory hurdles to consider and overcome. Some are familiar, some are new. ArentFox Schiff attorneys provide a multidisciplinary perspective to help producers, distributors, retailers and their partners in the retirement home industry offer practical strategies to maximize the value of opportunities created by the metaverse.

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