Have you ever wanted to own shoes made of deep-fried pigeon? Neither have we. However, it seems there is a market for this type of particularly bold fashion choice in the metaverse. Fashion – and corresponding legal clashes – are not new in the virtual world, with considerable coverage being devoted to the MetaBirkin NFTs, for instance, which are currently the subject of ongoing trademark litigation in federal court in the United States. Meanwhile, the case of Pigeon McNuggets offers another interesting example of alleged intellectual property infringement in the metaverse and the creative approaches that brand owners can adopt for dealing with this type of issue in the uncertain and difficult to navigate space that is web3.
By way of background, September saw the opening of the first metaverse fast food restaurant under the brand name McRTFKT’s. The restaurant was a not-so-thinly veiled play on McDonald’s, selling a variety of deep-fried virtual goods, including Big Macs, Happy Meals, and McRTFKT’s signature Pigeon McNugget slides. The latter are virtual slippers that can be worn by your metaverse avatar. “What even is virtual fast food?”, you might ask. Well, it certainly is not anything that is edible. McRTFKT’s “products” are digital items that are authenticated by NFTs, which then act as a proof of ownership. In other words, McRTFKT’s “fast food” products are effectively digital artworks that can be “worn” in the metaverse and resold on NFT trading platforms. McRTFKT’s items were exclusively listed on one such platform, OpenSea.
A dive into the McRTFKT project revealed that it was a small endeavor launched by tech savvy artists and was clearly intended to be humorous, generating attention with the media, particularly in the crypto and digital spheres. Controversy and humor can translate into significant sales, including in the crypto space, as attention and novelty frequently lead to speculation that resale prices will go up.
Ultimately, a commercial venture using a trademark to sell digital artworks would constitute “use in the course of trade,” which could amount to trademark infringement if the trademark at issue is identical or similar to another party’s trademark (and the goods/services are similar, as well). While that is straightforward, from a trademark perspective, enforcement in the metaverse can, nonetheless, raise some difficult questions, including …
– In which jurisdiction is the trademark being “used”? In order to take action in the UK, for instance, a claimant would usually have to show that the infringer is directing its activity towards the UK market. This can be an issue where the goods are purely virtual, the sale is made in cryptocurrency, and/or the goods are held in a decentralized way, such as on a blockchain.
– Who do you take action against? Very few of these small ventures are incorporated, meaning that you may need to track down and deal directly with individuals. This can be a tricky and expensive process where the individuals’ locations are unknown or spread across different jurisdictions, or where none of them have full control of the project.
– Are the goods sufficiently similar? As it currently stands, it is unclear whether digital artwork and real-world consumables will be deemed sufficiently similar to give rise to a risk of confusion for trademark infringement. This may change as case law and practice develops, but at the moment, smaller brands may struggle to bring trademark infringement actions when confronted with digital versions of their products, or this type of potential parody. On the other hand, established brands – such as McDonald’s, which are, by virtue of their fame, more likely to encounter infringement and/or parodies – may be able to rely on the additional protections afforded by virtue of their fame/reputations to bypass this issue, so would likely fare better in connection with enforcement activities.
Small artistic collectives like the group behind McRTFKT’s may be willing to drop their project once faced with the threat of legal action. However, brands considering action should carefully consider the risk of bad press when starting a feud with young tech-savvy groups in the age of social media.
What happened to Pigeon McNuggets?
Ultimately, McRTFKT’s and its Pigeon slides did not survive. Within weeks of its launch, domain name and trademark infringement complaints to OpenSea led to McRTFKT’s website being closed down and its NFTs being delisted. This process blocks the public’s ability to view McRTFKT’s virtual environment and for consumers to trade its NFTs. It also bypasses the costs and difficulties of enforcement through traditional means requiring a court with jurisdiction to hear a complaint. Interestingly enough, the complaint leading to McRTFKT’s demise came from Nike and not from McDonald’s. Nike, after all, acquired RTFKT, a virtual fashion business, in December 2021 and seems to have taken issue with the similarity of the McRTFKT name.
Complaints to NFT trading platform OpenSea follow a similar notice and take-down process to those of established social media giants. The complainant unilaterally requests the platform remove infringing items and there is no set response or appeal process. OpenSea decides whether there is infringement and whether an item should be removed. As such, the de-platforming process raises issues of fairness (and could raise questions of unjustified threats), but it is a quick and effective tool for brand owners faced with infringements in the metaverse.
It is important to note that de-platforming will not totally remove all traces of the Pigeon McNuggets or other NFTs. Owners of the slippers will still be able to “wear” them in the metaverse, but they cannot be traded on OpenSea, which effectively means that they are harder to re-sell and less visible to the public. It is similar to having a weblink removed from a social media platform: the website may still there, but without a link from a platform it is hard for readers to find it.
Brand owners might not have access to this type of swift take-down process in all situations. OpenSea is one of the larger players in the NFT market and has significant investment from venture capitalists. As such, it is incentivized to follow the current practices of social media companies to police its platform, in order to keep its investors happy. The same cannot be said for other NFT marketplaces, particularly those that are community-owned and are wedded to the “decentralized” culture of web3.
While the McRTFKT’s saga came to a swift end, navigating the legal landscape in the age of the metaverse continues.
Eleanor Merrett is a Partner at CMS Cameron McKenna Nabarro Olswang LLP, where she specializes in brand protection and enforcement. This article was co-authored with Oliver Roberts, a Trainee Solicitor at CMS.