The rise of the metaverse: tethering effect and intellectual property of crypto tokens

Abstract

Abstract Tokens, as digital content and virtual goods, require a comprehensive, multi-layered approach for analysis. This approach, which is generally applicable to various such goods, examines the legal status of tokens on three distinct layers: first, the rights to the virtual good itself; second, the rights to the assets linked to the virtual good; third, the rights to the intellectual property (IP) intricately associated with the token. This article examines issues of the associated rights concerning the general tethering effect, formal requirements for the transfer of IP rights, licensing, the doctrine of first sale (exhaustion), the concept of the lawful acquirer and other crucial cross-border aspects of IP in the realm of virtual goods, particularly in the emerging metaverse. The present contribution provides practitioners and researchers with a guide to tethering effects and IP in the context of tokens. It also highlights the need to change current paradigms due to the growing importance and actual existence of virtual property.