IP and the Metaverse: The Digital Millennium Copyright Act Will Face Serious Challenges in the Metaverse

Congress passed the Digital Millennium Copyright Act (DMCA) in 1998 to protect copyright on the Internet, but more than two decades later the law is showing its age. In particular, the emergence of Web 2.0, where user-generated content sites enable individuals to easily share video, audio, photos, and text with global audiences, has made effectively policing online infringement more difficult. The Internet is on the cusp of another major change with the development of the metaverse and other Web 3.0 (often stylized as “Web3”) technologies creating more challenges for protecting rightsholders from online theft because it will involve more ephemeral content, take place in semi-public digital spaces, and involve intermediaries operating in a more decentralized environment. To address these shortcomings, Congress should update the DMCA to foster greater use of innovative technologies to protect copyright online.

Section 512 of the DMCA established a notice-and-takedown procedure for rightsholders to request the removal of infringing content from online services without having to go to court. In exchange for a shield from liability for hosting infringing content, the DMCA requires online services to promptly remove infringing content after receiving notification from rightsholders. Online services must then notify the user of these actions and allow an opportunity for the user to submit a counter-notice if the user believes the removal was not justified. But the DMCA’s notice-and-takedown process has faced criticism from all sides. Rightsholders complain that they face a Whac-A-Mole problem because users can easily re-upload content after it is taken down, while users argue that the takedown process does not sufficiently protect fair use of copyrighted materials.

And these problems will become even more acute in the metaverse. Unlike today’s social media, where users usually share content publicly and indefinitely, users in social extended reality (XR) platforms may share content semi-publicly and fleetingly. For example, users in the metaverse may create “movie worlds,” virtual spaces where users can go to watch embedded video players illegally streaming copyrighted films in real time. These virtual spaces can be semi-public—publicly listed but with restrictions on who can access them—which makes them harder for rightsholders to monitor. These differences in how users share content mean that in the metaverse there is much more of a need to prevent copyright infringement from occurring in real-time rather than remove it after it has already occurred.

There are likely to be reasonable technical steps metaverse platforms can take to protect rightsholders building on successful ideas from social media. For example, platforms like YouTube use content identification systems to allow rightsholders to both proactively prevent unauthorized distribution of their content as well as license and monetize their content on its platform. They can also discourage would-be infringers by implementing community guidelines that issue warnings to users who share infringing content and then ban users who repeatedly engage in this conduct (e.g., a three strikes policy). Metaverse platforms can also restrict users from embedding streaming media in virtual worlds unless they use an approved streaming provider with anti-piracy policies and countermeasures.

Unfortunately, the DMCA does not incentivize online platforms to work with rightsholders to develop and implement preemptive measures to prevent infringement. Although the DMCA requires online services to “accommodate and not interfere with standard technical measures…to identify or protect copyrighted works,” the development of these measures is entirely voluntary and has largely not occurred. The SMART Copyright Act, legislation co-sponsored by Sens. Tillis (R-NC) and Leahy (D-VT), would address this issue by allowing the Library of Congress to designate proposed standard technical measures (STMs) that online platforms would then need to accommodate to maintain their liability protection. Developing STMs for XR platforms would help prevent rampant piracy in the metaverse.

The success of the metaverse will likely depend in part on the ability of creators to maintain control over how their work is reproduced, transformed, distributed, and publicly performed or displayed. Not only should Congress strengthen online copyright protections, but the Copyright Office should also promote more dialogue and collaboration between rightsholders and Web3 stakeholders to develop guidelines and best practices that ensure IP is protected in the metaverse in a way that balances copyright, free expression, innovation, and creativity online.