Counterfeits Reaching into the Metaverse, Police Take Action

Infringement of Online Virtual World Creation Rights
Potential Surge with Technological Advances
Trademark and Patent Infringements Also Subject to Crackdown
Activation of Cooperation System with KIPO and Others

[Asia Economy Reporter Seongpil Cho] The Supreme Court upheld the lower court's ruling in March 2020 in a damages lawsuit filed by three golf courses, including Montvert Country Club (CC) in Pocheon, Gyeonggi Province, against Golfzon, the largest domestic screen golf company. This is the so-called "Golfzon" case. It is also the first ruling by a Korean court recognizing copyright within a virtual world. Previously, Golfzon had operated by recreating over 150 domestic golf course courses through aerial photography and computer graphics. The court recognized the virtual golf course as a copyrighted work and held Golfzon liable for copying it without permission. At the time, the court stated, "The virtual golf course concretely expresses ideas related to the locations of facilities such as clubhouses, access roads, and practice ranges, as well as ponds and bunkers," and ruled that "it qualifies as a creative work expressing human thoughts or emotions."

Several years ago, copyright infringement in online virtual worlds was rare enough to escalate into lawsuits, but it is expected to become more frequent. This is a phenomenon resulting from the rapid evolution of virtual worlds created by digital technology, i.e., the "metaverse," driven by advancements in large-capacity graphic processing technology and 5G communication. With the surge in interest and users of the metaverse after COVID-19, there is a prevailing view that related new types of crimes will also increase. In the "2022 Copyright Protection Issue Outlook" released by the Korea Copyright Protection Agency, "Metaverse" (18.0%) ranked first. It was followed by "Non-Fungible Token (NFT) Transactions" (14.1%), "Online Video Services (OTT) and Copyright" (10.8%), and "Illegal Distribution of K-Content Overseas" (9.1%). The police also anticipate a sharp rise in crimes such as unauthorized use of real-world trademarks or copyrighted works with property rights in the metaverse and have recently strengthened their response. As the responsible investigative agency, they intend to rigorously crack down to protect intellectual property rights, a core element of national competitiveness.

Since the 23rd of last month, the police have been conducting crackdowns on intellectual property rights infringement cases. This measure was taken due to increased concerns about new types of intellectual property rights infringements, such as copyright use within the metaverse, amid the prolonged COVID-19 pandemic. The police explained the background of this crackdown by stating, "As the number of metaverse users increases, various property rights infringement acts may occur." The annual number of online sales cases handled by the Korean Intellectual Property Office has also been on the rise, with 121,536 cases in 2019, 126,542 in 2020, and 148,471 as of October last year, which also contributed to the rationale for this crackdown.

The crackdown targets three main areas: ▲ copyright infringement acts ▲ manufacturing and distribution of trademark-infringing products ▲ infringement of patents and other industrial property rights. A typical target of the crackdown is metaverse users creating and selling products similar to real-world goods without the trademark owner's permission. The police plan to deploy specialized investigative personnel, including the Anti-Corruption and Economic Crime Investigation Unit of 18 provincial police agencies nationwide and intelligence teams from local police stations, for this operation. They also intend to activate a cooperative system with the Korean Intellectual Property Office and local governments to share reports and inspection data. Furthermore, they plan to actively reward important exemplary cases with commendations and investigation expenses to encourage enforcement efforts.

This content was produced with the assistance of AI translation services.