Virtual Ownership in the Metaverse: IPR Protection for Digital Assets and Virtual Real Estate

Virtual Ownership in the Metaverse: IPR Protection for Digital Assets and Virtual Real Estate

The metaverse ideal of "virtual ownership" masks a legal grey area under which virtual property is held in platform-specific licenses instead of property rights. This article explores how current IPR regimes—copyright, trademark, and patent law—must adapt to protect creators and consumers in boundary-less virtual societies, balance jurisdictional challenges and enforcement loopholes that erode innovation and investment in virtual property and digital assets.

INTRODUCTION

The metamorphosis of property rights from tangible, physical assets to intangible, borderless assets in the virtual world is one of the most profound legal transformations of the 21st century. With estimates that the global metaverse virtual assets market size is projected to expand from USD 3.3 billion in 2025 to USD 8.0 billion by 2030[i], a radical reconceptualisation of ownership is in progress. This is no ephemeral development, but a fundamental challenge to established legal principles based on physical possession and territoriality. As we increasingly venture into the digital realm, the necessity for intellectual property rights regimes to be adapted in response to the characteristic attributes of virtual ownership has reached an unprecedented level of priority.

From Tangible Traditions to Digital Frontiers

The legal framework surrounding intellectual property has traditionally focused on an environment where creative works possessed distinct physical forms and were regulated by geographical boundaries[ii]. The classical differentiation originating from Roman law—differentiating corpus mysticum (the intangible IP right) from corpus mechanicum (the physical embodiment of that right)—functioned effectively as long as artistic outputs remained concrete, including manuscripts, artworks, or published literature. Within this context, copyright protected the intangible expressions of creativity, whereas property law protected the tangible embodiments of that creativity, facilitating a harmonious coexistence of both legal domains.

Now, the metaverse is revolutionising the very foundations of existing legal systems. In these interactive virtual environments, the digital assets exist only as code yet hold significant value in real-world space. Metaverse real estate markets are projected to increase exponentially from USD 4.12 billion in 2025 to a jaw-dropping USD 67.40 billion by 2034[iii]. Unlike earlier internet models centring on information sharing, modern-day metaverse platforms allow intricate business deals in virtual properties, goods, and services that blur existing territorial constructs. Alarmingly, research shows that more than 50% of NFT holders are unaware of their actual rights in relation to copyright and ownership[iv], underscoring the ever-increasing disconnect in user perceptions and legal realities.

Navigating Tomorrow's Virtual Terrain

The course seems irreparable as we proceed to a new world of virtual property. The total market of the metaverse is estimated at USD 507.8 billion, which will involve over 2.6 billion users by 2030[v]. Nevertheless, the existing legal grey areas discourage sustainability and put creators, investors, and platforms to the test. The issue of portability across platforms becomes a significant opportunity and an overwhelming challenge of virtual property rights, as it can elevate virtual assets to platform license into genuine, transferable property rights. As metaverse uptake increases, jurisdictional complications shall multiply, posing a need either for a general revamping of territorial spheres or the implementation of supranational "meta-jurisdiction" frameworks.

Defining the Boundaries

The article explores the changing legal environment in metaverses of virtual ownership and the safeguarding of intellectual property in relation to digital assets and virtual land. It covers aspects of copyright, trademark, and patent law while addressing blockchain-based ownership systems and the challenges of cross-border enforcement. It shall extend our focus beyond Indian legal frameworks to include worldwide perspectives, acknowledging that the metaverse transcends countries. The analysis spans from the present through 2025, with projections extending to 2034, giving us a glimpse into a future where virtual and real ownership collide in exciting and complex ways.

FOUNDATIONS OF VIRTUAL IP PROTECTION

As the metaverse transforms, there is a greater need to safeguard our digital assets and virtual properties. Navigating this new frontier requires a fresh look at existing IP treaties, national laws, and emerging court decisions that outline the boundaries of virtual ownership.

The Global Treaty Landscape

At the heart of international IP protection lies the Berne Convention, which binds member states, in all modes, electronic and otherwise, to uphold the exclusive rights of authors over reproduction and adaptation[vi]. The WIPO Copyright Treaty of 1996 takes it further by explicitly safeguarding electronic works, compelling member states to clamp down on unauthorised storage and sharing of digital content[vii]. The TRIPS Agreement, by contrast, seeks IP enforcement harmony by requiring WTO member states to offer civil remedies and border protection. Still, it does so without satisfactorily tackling challenges unique to blockchain technology[viii].

India's Statutory Terrain

In India, the 1957 Copyright Act stands firm, and gives authors rights over reproduction and communication, particularly in electronic storage and transmission[ix]. A landmark judgment in the case of Rameshwari Photocopy Services v Indian Institute of Engineering reinforced broad digital protections by confirming inferences against unauthorised reproductions[x]. Additionally, the Trade Marks Act of 1999 shields trademarks that are "used in relation to" goods or services, and its interpretation is increasingly being extended in ways to encompass virtual products[xi]. The Information Technology Act of 2000 addresses data tampering and recognises electronic contracts, but it has yet to address the challenges presented by the metaverse[xii].

Landmark Judicial Precedents

The watershed Hermès International v Rothschild showed that trademark use in virtual environments can lead to traditional infringement determinations. A federal jury ruled unanimously that Rothschild's "MetaBirkin" NFTs violated Hermès' trademark rights, awarding a hefty sum in damages and dismissing defences based on artistic expression[xiii]. In Yuga Labs v Ryder Ripps, the Ninth Circuit established that NFTs are considered "goods" under the Lanham Act, although determinations regarding potential consumer confusion were sent back for trial[xiv]. The settlement in Nike v StockX showcases brands' proactive efforts at protecting their virtual trademarks, bringing a three-year battle over unauthorised sneaker NFTs to a close[xv].

Uncharted Regulatory Blind Spots

Despite robust general IP regimes, no Indian specific legal regime addresses the basic questions, such as the separability of intellectual property tokens, cross-platform enforcement systems, and enforcement of smart contracts. Such gaps in regulation necessitate targeted reforms in demarcating virtual ownership, securing platform liability, and cross-border conflict resolution to ensure that developments in the virtual world are followed by adequate protection.

As we venture further into the metaverse, honing our IP regulations becomes clearer, paving the way for a safe and flourishing digital economy.

THE AUTHOR’S INSIGHTS

The "digital ownership" in the metaverse is an intriguing but tricky legal dilemma, where the fast-paced technological evolution and traditional property laws collide. The fundamental aspect of it is the blockchain technology that will offer undisputable ownership records of tokens. Most virtual assets, however, operate in these forms of platform-based licenses rather than property rights. This gap causes considerable issues, and therefore, the users’ investments hinge on the stability of the platform they are using and its dynamic policy.

The implementation of traditional IP regulations in the virtual world is an effective idea, yet it does not reflect the unique features of virtual scarcity and cross-platform compatibility. In contrast to tangible properties, the value of virtual ones is influenced by artificial scarcity created with technologies and is not inherently based. An example is a virtual Gucci handbag that sells at a price over $4,000 on Roblox[xvi]; its value stems not from inherent qualities, but from the exclusivity enforced by the platform—an exclusivity that could easily shift or vanish with a software update.

Indian creators and investors find the contemporary regulatory environment to be especially difficult, as they have no clear legal avenues to resolve virtual asset disputes. Though cases like Hermès v. Rothschild indicate that courts are open to applying existing trademark laws to digital scenarios. Nevertheless, they do not cover dilemmas that are unique to virtual worlds, like how to make assets portable between platforms or provide the enforcement of smart contracts. This loophole in the legislation of metaverses in India creates a problem with jurisdiction, as local users are at the mercy of foreign-based international platforms.

To achieve virtual ownership, we have to reevaluate digital assets as distinct property types with enforceable rights that cut across the lines of platforms. Smart contracts promise to be automatically licensed and provide royalties, but their status in India is unproven in court. The road to go needs proactive legislative change, and not to stand back and expect the interpretation of the law as it stands. In this way, India will be able to become a leader in the field of virtual property law so that local interests remain in the global digital economy.

ADVANTAGES FOR CREATORS AND BRANDS

The metaverse is revolutionising creative expression so artists and entrepreneurs can survive and flourish without intermediary gatekeepers such as publishers and galleries. This change allows artists to reach audiences directly and sell works of art through NFT marketplaces and virtual exhibitions[xvii]. The creator economy has reached USD 104 billion in the present, and today, almost 50 million creators are producing [xviii]. Sales in virtual real estate surged in 2023 to USD 500 million, marking the onrushing economic space.

Blockchain-smart contracts facilitate seamless licensing and payment of royalties, provide for secured ownership, and present novel business models for perpetual income based on secondary sales.

Cross-platform use of digital property rights allows big names such as Gucci to host prosperous virtual exhibitions. Virtual event attendance in platforms such as VRChat goes up 44%, a sign of high demand for such events[xix]. Generally, the metaverse transforms how we experience and make money from creativity, a sign of its enduring presence.

ENFORCEMENT HURDLES AND MARKET RISKS

Protection of virtual assets is like navigating a maze of challenges, particularly with the international character of metaverse platforms. It brings complicated legal challenges, as various courts seek to have jurisdiction, and traditional intellectual property law is playing catch-up. This will be a free zone to pirates, and the owners of the assets will be at stake.

In addition, greater reliance on some platforms is undesirable. While blockchain ensures proof of ownership, users can lose everything if a platform goes out of business or closes down their account, with legal redress often restricted[xx]. The Bragg v. Linden Lab case demonstrated how platform operators can control resources even when users presume to own them.

The NFT space is also infested with issues, with counterfeiting and fraud causing over USD 100 million in reported thefts between July 2021 and July 2022[xxi]. Wash trading and phishing are among the practices that instil mistrust, while the simplicity of duplication of digital goods makes their scarcity and value meaningless.

With this ever-evolving landscape, being aware and updated to protect virtual investments is crucial.

CONCLUSION

Metaverse virtual ownership is a milestone where law lags technology, and stakeholders need fast action to avert systemic market failures. There is a bitter lesson for artists and creatives: buying an NFT or virtual asset only protects narrow rights of use, not copyright title. Before minting or buying, make sure there are express licensing agreements in place and know the platform terms that may strip you of access without remedy.

Legal practitioners must appreciate that classic IP jurisdictions apply to virtual worlds, as evidenced by milestone decisions in Hermès v Rothschild and Yuga Labs v Ripps. Nonetheless, enforcement procedures are patchy across jurisdictions, spawning fresh practice specialities in cross-border virtual asset litigation and smart contract enforceability.

Legislators and policymakers, specifically in India, are under a pressing mandate to fill regulatory loopholes. The failure to have specialised metaverse legislation exposes local users to overseas platform policy, hindering innovation. Top priorities in the near-term are outlining token-IP separability, compelling transparent licensing notices, and forming meta-jurisdictional coop arrangements.

Companies and investors must do thorough due diligence in platform stability, terms of service, and intellectual property clearance before resourcing virtual assets. The reported USD 100 million NFT heist in 2021-2022 highlights the need for robust security measures as well as legal compliance.

The metaverse economy's USD 507.8 billion 2030 forecast will only come to pass if stakeholders together remedy these foundational legal ambiguities. The time for proactive reform is closing—the window of opportunity is such that it must give rise to legally meaningful ownership, or risk market failure via user abandonment and regulatory reprisal.

[i] Statista, ‘Metaverse Virtual Assets – Worldwide | Market Forecast’ (2025) <https://www.statista.com/outlook/amo/metaverse/metaverse-virtual-assets/worldwide> accessed 06 September 2025.

[ii] World Intellectual Property Organization (WIPO), ‘The Metaverse, NFTs and IP Rights: To Regulate or Not to Regulate?’ (2022) <https://www.wipo.int/web/wipo-magazine/articles/the-metaverse-nfts-and-ip-rights-to-regulate-or-not-to-regulate-42603> accessed 06 September 2025.

[iii] Precedence Research, ‘Metaverse in Real Estate Market Size and Forecast 2025 to 2034’ (2025) <https://www.precedenceresearch.com/metaverse-in-real-estate-market> accessed 06 September 2025.

[iv] MoldStud, ‘Legal Battles in the NFT Space – Case Studies and Lessons Learned’ (2025) <https://moldstud.com/articles/p-legal-battles-in-the-nft-space-case-studies-and-lessons-learned> accessed 06 September 2025.

[v] NFT News Today, 'Virtual Real Estate and Metaverse Market Forecast (2025-2030)' (2025)

[vi] Berne Convention for the Protection of Literary and Artistic Works (1886) art 9(1).

[vii] WIPO Copyright Treaty (1996) arts 6–8.

[viii] Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement, 1994) art 41.

[ix] Copyright Act 1957 (India) s 14.

[x] Rameshwari Photocopy Services v Indian Institute of Engineering Science and Technology (2016) 10 SCC 93.

[xi] Trade Marks Act 1999 (India) s 2(zb).

[xii] Information Technology Act 2000 (India) s 66C.

[xiii] Hermès International v Rothschild 2023 WL 2987098 (SDNY, 2023).

[xiv] Yuga Labs Inc v Ryder Ripps Case No 24-879 (9th Cir, 2025).

[xv] Nike Inc v StockX LLC Case No 1:22-cv-00983 (SDNY, 2025).

[xvi] Roblox Platform Statistics (2023).

[xvii] Sapizon, ‘Opportunities and Challenges in the Metaverse Economy’ (2023) <https://sapizon.com/opportunities-and-challenges-in-the-metaverse-economy-for-businesses-and-entrepreneurs/>

[xviii] Dialect Inc, ‘Creator Economy Is Central to the Metaverse’s Success’ (2024) <https://dialectinc.com/creator-economy-is-central-to-metaverse-success/>

[xix] OSL, ‘Metaverse: The Virtual World Shaping Our Digital Future’ (2025) <https://www.osl.com/insights/metaverse-virtual-world-shaping-future/>

[xx] ‘Jurisdictional Issues in IPR Enforcement in the Digital World’ (2023) <https://www.example.com/jurisdictional-issues-ipr-enforcement-digital>

[xxi] The CPA Journal, ‘Fraud Risks in the Market for Nonfungible Tokens’ (2025) <https://www.cpajournal.com/2025/02/15/fraud-risks-nft-market/>