Legal Issues to Consider When Moving Your Business to the Metaverse
When your company ventures into the online world of the metaverse, you will want to plan the expansion of your business carefully so the potential financial rewards do not get offset by some of the various problems inherent in this arena. The first step of your metaverse planning should be to educate yourself on the risks. The second step is to develop a strategy to protect your assets and minimize liability exposure.
A Maryland business attorney can help you with both steps of this process and explain some of the legal issues to consider when moving your business to the metaverse. Let’s start by exploring assets that might not have been high on your company’s radar in the “brick and mortar” world of doing business.
Why Your Company’s Intellectual Property Could Now Be One of Its Most Critical Assets
In the past, keeping your business safe from thieves involved locking the doors and windows, fences, security cameras, and an alarm system. Some industries have also hired security guards to patrol the premises in person. So, how do you keep your intellectual property safe from scammers and con artists?
The original Coca-Cola formula and Kentucky Fried Chicken recipe were locked in physical vaults and, even now, are known only to a few well-chosen individuals. Those tactics might work for food-related secrets, but what do you do if your intellectual property includes logos, brand names, trade secrets, copyrights, or trademarks?
People can now register, buy, and sell intellectual property online. They can also misappropriate your intellectual property without paying for that use for their own use. Depending on how useful someone else might consider your original creation, invention, or idea, you might have a commodity worth as much or more than a traditional storefront property.
The Explosion of the Virtual Goods and Services Marketplace
People now do much of their shopping online, even things we traditionally bought inside a physical store. You can now have a store or shopping app do your shopping for you and either deliver your goods to your home or arrange for curbside pick-up. If you sell things to consumers or businesses, you will need to offer convenient services like these to stay competitive.
It is possible to buy and sell assets that are not tangible, including intellectual property, online. People can also book a vast array of services online, from a doctor’s appointment to get their taxes done to a conference with a teacher. Many of the same legal questions apply to these things.
Now, some apps like Horizon Worlds are testing a function that will allow people who create virtual items to sell them within their social virtual reality world. Web3, also called Web 3.0, is a concept that would make a new version of the Internet-based on blockchain technology similar to Bitcoin.
Legal Issues of Online Shopping and Delivery
When entering this relatively new form of distribution of your product, you will want to consider legal issues like:
Liability for your workers who provide the shopping service and participate in curbside pick-up. What happens if one of them slips and falls when gathering the items or gets struck by a car at the curbside pick-up location?
What liability your company might have if an outside person working for a shopping or delivery app gets injured during the process.
Determine if your business insurance policies provide coverage for every possible risk your company might face with these transactions.
Even people who intend to come to your place of business to shop will want to turn to your website to get the information they need, like your store’s physical address and phone number, email address, directions, and store hours. People use their mobile phones for many purposes now, most of which do not involve making telephone calls. It is often faster to get information from a well-designed website.
Also, your company website should allow people to browse and purchase your products through a virtual shopping cart. Make sure these transactions and the personal information of your customers stays private and secure. Data breaches that include hackers stealing the credit card information of your patrons can cost businesses millions of dollars in restitution and damage to the company’s reputation.
Finally, create and maintain ongoing strategies to ensure your online product information is updated in real-time. If a customer gets angry, you do not want to get accused of “bait and switch” tactics because a less expensive item was out of stock even though it looked available for purchase in your online storefront. Also, the price of things needs to be accurate, which can be challenging during current inflation and supply shortages.
Protecting Your Intellectual Property in the Digital World
Pirated music, books, and videos have cost artists, authors, producers, and publishers untold billions of dollars ever since access to the Internet became only a computer or cell phone away. When an item goes up for sale, rental, or transfer online, there is always the risk someone will try to steal your hard work or investment. Consider downloadable content.
The technology to secure these forms of intellectual property lagged far behind the ability of online thieves to take these items for their own use or to make money from them. Some ways you can use existing laws to protect intellectual property include:
Having employees sign confidentiality and non-disclosure agreements.
Using licensing agreements to allow limited use of your brand or other digital assets.
Evaluate how blockchain technology could help or threaten your business.
Think about whether you want to accept fungible tokens like Bitcoin to pay for your goods or services.
Implementing security measures within your company’s IT, like using a virtual private network (VPN) and requiring the use of passwords to access the company wifi.
Keeping the number of people who have access to critical intellectual property to a minimum.
Registering your patents, trademarks, and copyrights.
You will want to find a balance between security and the inconvenience of some of these security measures so you do not impede your company from doing business efficiently.
Growing Commercial Opportunities in the Metaverse
Some opportunities to make money only exist in the digital world, like online advertising, website banners, digital billboards, and websites that can redirect interested consumers to your website, for example, someone looking to get an online college degree. These opportunities do not make or sell the product itself but instead facilitate the promotion of the product and direct online traffic to the seller of the item.
Online real estate sales and real estate rentals have exploded in recent years. Both vacation rentals and real estate were growing steadily before the pandemic. Potential buyers and sellers realized they could not put their lives on hold indefinitely. Savvy real estate agents incorporated virtual video tours and drone footage into their listings to give buyers the feeling they had visited the property in person.
Each of these increasing online markets comes with legal issues similar to the other concerns we have already covered in this article, as well as some unique issues. You will want to protect your company’s intellectual assets and manage your risk and liability.
Law Firms in the Metaverse
The metaverse offers attorneys a wide range of opportunities to continue doing business despite challenging events like hurricanes and other natural disasters, political upheaval, and future pandemics. The metaverse also allows law firms to be more efficient and improve their “turn-around” time for clients. Finally, online activity has led to new types of lawsuits like personal injury claims for online abuse and harassment.
Instead of sending multiple drafts back and forth or arranging everyone’s schedule for in-person meetings, lawyers and their clients can now use virtual conferencing to negotiate and enter into contracts “live” with other parties. You will want to make sure these meetings and documents shared with other parties are secure from hackers or unauthorized distribution.
During the pandemic, attorneys learned how to conduct many activities remotely, like mediating and arbitrating disputes and participating in trials and other courtroom hearings and conferences. Also, many other activities that used to require a trip to the courthouse or an even longer time for items to go through the mail, like filing pleadings, obtaining licenses, and registering formal documents for clients, can now be completed in a matter of minutes online.
Law firms that continue to use certain aspects of the digital world can reap multiple benefits. The law firm can save money on transportation expenses, postage, copies, and delivery charges. Clients will be happy when their legal work gets done more quickly and conveniently.
Legal Issues Surrounding Remote Workers
Many businesses had to develop new strategies to get their work done when their employees could not go into the office due to COVID-19 pandemic lockdowns. As countless “brick and mortar” locations shuttered, many companies discovered that maintaining a smaller physical location could save them a lot of their operating expenses. Also, workers have increasingly expressed an interest in continuing to work from home after lockdowns got lifted.
Having remote workers raises several legal concerns for employers, including:
Making sure your employees do their work when working in a virtual space rather than in the physical world of the traditional office.
Who pays for the office supplies and equipment like office furniture, computers, and printers for remote workers.
Who maintains and repairs the office equipment used away from the office.
Privacy concerns that can arise during work-related video conferences with employees.
Privacy issues and legal implications when the company uses employee productivity and performance tracking software on the computers remote workers use.
The company's liability when remote workers get injured through accidents or repetitive stress activity when on the job.
What constitutes being “on the job” for remote workers.
Protecting your remote employees from using the unauthorized use of company equipment and intellectual property.
You will want to review your company’s insurance policies to see if they cover these situations. Also, it could be helpful to work with a Maryland business attorney to develop strategies to protect your business from these legal issues and other consequences of transitioning from the real world of doing business to virtual worlds or digital worlds like metaverse platforms. Contact Steve today to get your questions answered.
