User-generated content and 'cheats'

An objective of the metaverse is to enhance the online experience by allowing users to express themselves however they wish and to move within various metaverses. This poses the difficult challenge of trying to get users to interact with intellectual property (IP) in a respectful way. There are two particular areas where this has been an issue for online environments that are dependent on users interacting: user-generated content (UGC) and 'cheats'.

User-generated content and IP

The ultimate form of IP interaction and expression is UGC. In most cases, video games have been able to reduce risks by keeping content within a closed environment (a game) without the ability to take their customised experiences to external environments and by putting in sufficient reporting tools to be notified of a complaint.

In the metaverse, users will have the ability to create and use digital assets across different environments. For example, digital sculptures for others to admire could feature in exhibitions, or an avatar representing someone within the metaverse could appear in games such as Fortnite. The development of tools to facilitate the creation of UGC are also becoming increasingly more user-friendly with games, such as Minecraft, Roblox or Dreams, making it easy for younger children to build entire games with these tools.

UGC gaming is on a roll: The pandemic is boosting user engagement and Roblox’s $70 billion IPO shows how this is valued".

Source: Newzoo Trend Report 2021 - Intro to the Metaverse report.

Provisionally, from an IP perspective, the relationship with UGC is fairly clear: digital creations are likely to be protected by, at least, copyright, with the creator owning the content unless they are under an employment contract (for most jurisdictions) or have otherwise assigned the right. In most cases, companies will require a non-exclusive licence to host UGC on their platform (and perhaps other uses such as on social media).

The situation becomes more difficult when UGC infringes a third party's IP. What if you enter a metaverse using the likeness of Will Smith or Master Chief? While the latter would probably be an infringement of registered or unregistered IP, the former is likely to be an issue under what is broadly referred to as "image rights". Like all IP, image rights are territorial and their strength will depend on the country in which the IP owner decides to litigate. In the US, image rights are quite strong and there has been a history of cases where celebrities and political figures have claimed an infringement. Whereas the UK does not expressly recognise image rights, a weaker form of protection may be available under the common law tort of passing off.

Finally, interoperability of metaverses will inevitably require the mixing of IP. Video games are unlikely to be able to rely on closed environments anymore – therefore, entering the metaverse unprepared may mean that you find your IP being misused. You could find a user with a legitimately acquired avatar being used in an unforeseen way (for example, Peppa Pig appearing in a zombie post-apocalypse survival game). Companies will need to reconcile their marketing team's desire for users to interact with IP in novel ways to strengthen a connection with customers while also ensuring that the way IP is used is respectful and consistent with their branding. This is particularly important since the opportunities for identifying and dealing with infringement issues within a metaverse are not clear.


The world of cheats has progressed far from its early days when video games included additional hidden features to prolong engagement with their players and allow developers to express themselves. One of the earliest examples is the fabled "Konami Code" for the arcade game Gradius for the NES.

The modern form that cheats take tend to be external software taking advantage of various glitches or gaps in the system that disrupt the fine balance the developers create within games. This sort of behaviour varies from inserting bots within a game to assist with a player's progression to software that will display the location of opponents on a battlefield through walls or that takes over the controls to give an unfair improvement to a player's performance. These types of cheats have a significant impact on games and disrupt a carefully crafted user experience. Left unchecked this can have a devastating effect, driving players away from what would have been extremely popular releases.

Thanks to the increasing popularity of esports and streaming gameplay on social media and video-streaming platforms, there is now a great emphasis on online competitive gameplay. Taking this to the next (metaverse) level, competitive gameplay will happen in an environment where performance could result in the earning of in-game currency or other in-game assets, which may attract real-world value as part of proposed "play to earn" gameplay mechanics. In other words, this could be the beginning of a more democratised system of gameplay where more players will get money for playing well, not just the winners of major esport competitions. When this very real benefit is factored in then the likely result will be that the demand for cheat software grows. Furthermore, with the advancements of artificial intelligence we are already starting to see cheat software using machine learning as a means to avoid detection.

Defensive armoury

Video games companies will have an armoury to tackle such issues: from the practical measures of outsourcing or developing anti-cheat software in-house to taking legal action against those that develop or propagate cheat software. Most legal action can be distilled into three causes of action:

  • Breach of contract or inducement of breach of contract – typically an End-user Licence Agreement (EULA) will prohibit cheat software from being used.
  • IP infringement and/or quasi-IP infringement – this will usually take the form of trade mark infringement (where developers refer to trade marks), copyright infringement (this can vary from jurisdiction and subject to how the cheat software operates) and circumvention of technological protection measures.
  • Joint liability – this type of relief tends to be more discrete to common law jurisdictions that recognise joint liability principles. For example, in the UK, cheat software developers can be held jointly liable for acting in common design with players who implement cheat software.

'Arms race'

Overall, there is an "arms race" afoot and, as the video games industry explores different monetisation mechanics that enable the players to commercially exploit games for themselves, there is a greater risk that cheat software developers will be motivated to provide more advanced cheat software.



Nick Kempton Senior Associate, UK +44 207 105 7333