One Size Doesn’t Fit All: How European Businesses Are Organizing to Catch the Metaverse Wave
Law firms across Europe, like their counterparts around the world, are seeing a flood of new work advising clients on doing business in the metaverse, from blockchain and cryptocurrency to artificial intelligence and non-fungible tokens.
But firms’ approaches, like the projects they are called upon to advise, vary widely, reflecting the newness of the market, its rapid growth and the experimental nature of much of the work, European lawyers told Law.com International.
“We are discuss it with all of our clients – finance, luxury, fashion, sport, video games – all sectors combined”, declared Franck Guiader, who leads an innovation and Web 3.0 team at the elite French firm Gide Loyrette Nouel.
“This is just the beginning,” said Boriana Guimberteau, intellectual property partner and metaverse practice lead at Stephenson Harwood in Paris. “There is a lot of speculation now, but over time it will become part of the landscape. Everyone wants to know more.
A project in Portugal shows how new technology is infiltrating unexpected sectors and how law firms are getting involved.
Abreu Advogados, a business law firm based in Lisbon, advised on the creation and launch of the firm “Artentik | NFT for Good Causes” from Santa Casa da Misericórdia de Lisboa, a Portuguese charity.
Artentik is an NFT marketplace, registered on the Ethereum blockchain network. The tokens, or virtual images, are linked to objects belonging to the Santa Casa art collection, relics, reliquaries, sculptures, artifacts and other objects, authenticated by the charity.
Abreu advised on all legal aspects related to the creation and development of the platform with a team including partners in tax, fintech (for the underlying blockchain technology) and intellectual property (for rights and contracts).
The project involves a rare combination of “a traditional institution with a conservative market position that is also at the forefront of this endeavor,” Isabel Pinheiro Torres, associate financial services partner at Abreu, told Law.com International.
Santa Casa “wanted to find a way to monetize its assets to raise funds – to sell sacred pieces it owns and displays in a church and museum, while keeping them and keeping the property open,” said she said in an interview.
Selling NFTs is also a way for the museum to “expand its market globally,” Pinheiro Torres added.
Because the Metaverse is built on a foundation of blockchain technology and cryptocurrency, financial services and technical teams are often the first entry points for clients seeking advice.
Abreu became involved with the Santa Casa NFT project through his financial services practice team, which saw growing demand from clients to “provide services to those who invest in crypto assets,” said said Pinheiro Torres.
But IP teams and specialist firms also present a significant share of new pitches, especially for NFT advice, because copyright and data protection issues are at the heart of these products.
Guimberteau, of Stephenson Harwood, said one of the more unusual proposals she had seen came from a French newspaper publisher. The group holds an annual prize for its best customers, and this year, instead of a trip or a trinket, it was instead considering giving away an NFT – “something different, something new”, he said. she stated.
She also responded to requests from entrepreneurs creating NFT marketplaces, she said, as well as a flood of interest and projects from the luxury and fashion industries, including major players.
“The luxury sector is at high speed now,” Guimberteau said. “All the big companies are testing to see how it will work.”
She added that currently 75% of the NFT market is for collectibles, virtual versions of collectibles, or branded merchandise. Another 7% to 8% was in artwork, and the rest was in property and clothing, she said.
Like so much in this field, that could change tomorrow, and the lawyers said a lot of their work on the metaverse involves keeping up to date with new laws and regulations, which are tough but not so different from what their practice already requires.
In fact, for many lawyers, the situation today recalls the beginnings of the Internet, both in its Wild West aspects and in the opportunities for creation.
The metaverse is “an evolution, not a revolution,” said Catherine Mateu, partner at Armengaud Guerlain, a Parisian boutique focused on intellectual property.
“We were already there when music moved from CDs to streaming, or when we started getting services over the internet,” she explained. “Copyright or patent in the virtual world is a new way of protecting a right, and of course there are adaptations, but we already know the structure.”
Guiader, at Gide, added that since advising clients on the metaverse is fundamentally still advising clients on their business, experience matters, and so it’s not just a young lawyer’s game.
“A lot of the issues aren’t really new,” he said. “Partnership between the brand and the platform is nothing new, and to advise a client, you need a history of understanding the brand as well as the technology.”
Regardless of the industry, lawyers said the high demand for advice in this complex new area means multiple practice teams will be involved.
At Stephenson Harwood, Guimberteau leads the crypto-metaverse practice outside of the IP department, but works closely with colleagues in other practice areas of the company.
Gide has a working group on all things crypto and the metaverse that brings together corporate, regulatory, intellectual property and tax lawyers, Guiader said.
“Having expertise in regulation is important because regulation will be central to the development of transfers within the metaverse,” he said. “And if the metaverses become interoperable, the rules will have to be harmonized.”
Guiader considers the advice lawyers should give to clients interested in the metaverse to be two-fold.
“It’s important for brands to move fast, to establish a presence,” he said. “But they also need a clear strategy for their business model and how they will manage risk.”
This strategy, he said, had to go beyond “traditional legal issues of digital commerce, such as data protection”.
“The Metaverse is blockchain and cryptocurrency-based,” he said. “If you don’t understand these fundamental technologies, your project will fail.”
But where customers interested in the metaverse might find blockchain and crypto too dense or high-tech, NFTs are easier to grasp and provide a gateway to this new world, Guiader said.
“There’s an acceleration around the metaverse that we haven’t seen around blockchain,” he said. “Three years ago you were mentioning these technologies and customers were saying, ‘I don’t know what I don’t know.’ With the metaverse, they know what it is, and they want to be advised and accompanied.