Well, even Strava (think Facebook for endurance athletes) and Starbucks tried to push NFTs on me yesterday, so I guess the metaverse is here to stay. With that being said, two major questions came to mind today. First, will the Starbucks NFT give me that caffeine kick? Second, with so many companies moving into the metaverse, what are some of the lesser known legal risks they are going to face?
Three such issues relate to personality rights, personal data and privacy and employee safety.
When a company enters the metaverse and designs its avatars, it must be aware of the legal principle of Right of Publicity (known as Personality Rights in the USA). The Right of Publicity is the right of a person to control the commercial exploitation of their identity.
The Right of Publicity is protected in Canada through civil (tort) law, specifically the tort of appropriation of personality. This tort differs from legal actions based on an infringement of trademark or copyright. Instead, the tort of appropriation of personality is actionable where a party uses the image of another for their commercial advantage. In British Columbia, plaintiffs can rely on legislation to seek legal recourse. In Ontario and Alberta, plaintiffs must rely on the common law.
Under the tort of appropriation of personality, the commercial use of a person’s representational image, without consent, constitutes an invasion and an impairment of that person’s exclusive right to market their personality.
Put another way, you cannot use another person’s likeness or image for profit.
How does this apply to avatars and the metaverse?
In a virtual world companies will be creating avatars to navigate in and participate in an online environment that will be an extension of the physical one. In that environment companies will be running businesses and seeking to profit from that business. It is therefore not hard to imagine that some of these companies will seek to increase their business, standing or influence by creating and using avatars that portray a celebrity or trusted public figure.
If you are a small online sneaker company, what better way to boost sales than creating your avatar to look like Michael Jordan? Or, use a Tony Robbins based avatar to promote your personal development course?
The question will then become, to what extent are there similarities between the avatar and the person being copied? Although this will be an area for the Courts, I think it is safe to say that if an avatar can reasonably or objectively be identified as the person being copied, the creator of the avatar is probably in the wrong and companies should aware of this when creating their avatars.
Personal Data and Privacy
The second issue is that of person data and privacy. Many countries now have, or are in the process of creating, legislation to govern the collection, storage and usage of a customer’s personal data. This was less of an issue for companies when they ran brick and mortar stores where people could come and purchase goods with cash or card through a third party payment provider. In these cases, the company would probably never receive personal data of the customer. However, with the metaverse, companies will likely require customers to create an account to access their services and, as a result, be in receipt of that customers personal data. Further, every time that customer accesses the companies services on the metaverse, the company’s information about that customer will increase. In receiving this data, companies will be required to collect, store and use it in accordance with its local, and ever-changing, law on privacy and personal data. As we move more and more online, these requirements will only become more onerous and companies must be prepared to deal with these requirements in a responsible manner.
The third issue is the potential for harm to a company’s employees. In one way or another, many countries generally require employers to do everything they can to reasonably protect the health and safety of their employees. In the metaverse, I would argue this applies to both the physical world and the virtual world.
In terms of the physical world, and even though many employees in the metaverse will be working from home, companies still have obligations. For example, what if an employee is required to wear a VR headset as part of their job? These headsets are new technologies and we do not if they will have any adverse effects if they are used regularly over years. Accordingly, employers should be checking-in with their employees to see if they are having any affects related to the headset.
In terms of the virtual world, there is an increased risk of employees being subjected to abuse and harassment. In the physical world, it is easier to identifying someone who is abusing staff as they cannot easily hide their identity. However, in the virtual world, this is much harder to do as the attacker could be operating under an alias that cannot easily be traced to a specific person. In order to mitigate the risk of employees facing this abuse, company’s should try to KYC their users, train staff in how to deal with these situations and provide supports to employees who have undergone abuse in the virtual workspace.
The metaverse is coming and it is going to be an exciting development. However, like with all new things, there will be growing pains that companies operating in the space will need to endure. However, as with the issues identified above, these growing pains are not insurmountable and companies can mitigate these risks by grabbing a Starbucks NFT and considering their exposure in advancing of launching into the metaverse.
All views expressed here are solely the views and opinions of the author. These views are not legal advice and are provided for entertainment purposes only.
Kevin Stenner, JD.