Parodies in the metaverse – the curious case of Pigeon McNuggets

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 is not new in the online space. There has been considerable coverage of the ongoing trade mark dispute relating to MetaBirkin NFTs, which is currently the subject of litigation in the US. The case of Pigeon McNuggets offers another interesting example of IP infringement in the metaverse and the creative approaches brand owners can adopt for dealing with this type of issue in an uncertain and difficult to navigate online space.

The Background

September saw the opening of the first metaverse fast food restaurant under the brand name McRTFKT’s (pronounced “McArtifact’s”). The restaurant was a not-so-thinly veiled parody of McDonald’s, selling a variety of deep-fried virtual goods including Big Macs, Happy Meals, and McRTFKT’s signature Pigeon McNugget slides: pigeon nugget virtual slippers, which can be worn as a greasy statement piece by your metaverse avatar. McRTFKT’s twitter post featuring the Pigeon McNugget slides is available here.

“What even is virtual fast food?” you might well ask. Nothing edible. McRTFKT’s ‘products’ are digital items that are authenticated by NFTs, which then act as a proof of ownership. McRTFKT’s ‘fast food’ products are effectively digital artwork, which can be resold on NFT trading platforms. McRTFKT’s items were exclusively listed on one such platform, OpenSea. Some of the NFTs, including the pigeon nugget shoes, are 3D digital items which can be worn by the purchaser’s avatar in the metaverse, which adds an additional layer of functionality (and style) to the NFT.

Trade Mark Considerations

McRTFKT’s appears to have been a small project by tech savvy artists and was clearly intended to be humorous. However, it still generated attention with the media, particularly in the crypto and digital spheres. Controversy and humour can translate into significant sales in the crypto space, as attention and novelty frequently lead to speculation that re-sale prices will go up. Ultimately, a commercial venture using a brand to sell digital artworks would constitute “use in the course of trade”, which could amount to trade mark infringement if the brand used is identical or similar to a registered trade mark.

From a trade mark perspective, enforcement in the metaverse can raise some difficult questions, including:

• In which jurisdiction is the trade mark being ‘used’? In order to take action in the UK, a claimant would usually have to prove that the infringing trader is directing its activity towards the UK market. This can be troublesome where the goods are purely virtual, the sale is made in cryptocurrency, and/or the goods are held in a decentralised way such as on a blockchain. Our previous Law-Now (here) explores jurisdictional issues in the metaverse.
• 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, digital artwork and real-world consumables are unlikely to be deemed sufficiently similar to give rise to a risk of confusion for trade mark infringement. This may change as case law and practice develops, but at the moment, smaller brands may struggle to bring trade mark infringement actions when confronted with digital versions of their products, or this type of parody. Established brands such as McDonald’s (which are, by virtue of their fame, more likely to encounter parodies) may be able to rely on the additional protections afforded by virtue of their reputations to bypass this issue, so may well fare better in 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 PR when starting a feud with young tech-savvy groups in the age of social media.

What happened to Pigeon McNuggets?

Ultimately, McRTFKT’s did not survive. Within weeks of its launch, domain name and trade mark 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.

Surprisingly, the complaint leading to McRTFKT’s demise came from Nike and not from McDonald’s. Nike purchased RTFKT, a metaverse NFT fashion business, in December 2021 and appears to have taken issue with the similarity of the McRTFKT name.

Comment

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 IP 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 trace of Pigeon McNuggets. 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 incentivised 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 ‘decentralised’ culture of Web3.

The current uncertainties in the legal framework make de-platforming a useful tool for brand owners who want a quick resolution, but there are other creative approaches to dealing with metaverse infringements. Nike’s acquisition of RTFKT, the NFT avatar fashion business mentioned above, is an interesting case in point. Prior to the acquisition, RTFKT stated it was ‘inspired by Nike’ and specialised in virtual sneakers, some of whose early designs were similar to Nike’s signature Air Jordans. In acquiring RTFKT, Nike not only gained a foothold in the NFT market, but also prevented any potential trade mark or design infringement by RTFKT. It also acquired sophisticated and technically proficient talent within the NFT sphere, arguably making policing misuse of its trade marks in the metaverse far easier.

Whilst the McRTFKT’s saga came to a swift end, navigating the legal landscape in the age of the metaverse continues.

Article co-authored by Oliver Roberts, Trainee Solicitor at CMS.