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How to create an IP moat in the metasverse?

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The IP Moat served as a spiritual anchor for engineering and r&d teams as they adapted to the transition to the meta-universe.

How to Create an IP Moat in the Meta-universe?

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The preface

Innovation disrupts one status quo and establishes another; The cycle repeats. Over the past 30 years, we've seen a transformation of multiple computing platforms. Each technological paradigm shift opens up new frontiers for building innovative products and services. For example, the growth of mobile devices has increased the possibilities for social networking, ride-hailing and work collaboration. The new paradigm shift is the metasexes, the latest portal to the Internet, consisting of persistent, shared, programmable 3D virtual environments connected to the perceptive virtual world through augmented reality and virtual reality devices. As a programmable collection of virtual experiences, the metasverse will fundamentally change how we think about the Internet by making it more immersive.

This paradigm shift offers opportunities to expand innovation in real-world devices, chips, processors, touch controls, displays, software development platforms, games, consumer applications, and enterprise applications. The past decade has spawned app stores and cryptocurrency entrepreneurs; The next decade will pave the way for metaverse entrepreneurs.

Gaining market share and creating an IP moat in this new model is critical for companies that are building a meta-universe.

IP moat

The IP moat of a technology company refers to the reach and strength of its intellectual property (patents and trademarks) in the technology sector. The IP moat is evaluated across three different dimensions.

• Defensibility: Measures the extent and strength of a company's intellectual property rights over its products. For example, if Acme sells VR headsets, it might have a patent to reduce motion sickness while using the headset.

• Enforceability: Measures the reach and strength of a company's intellectual property against competing products.

• Opportunity: Measure the potential of the company's intellectual property in terms of available invention gaps in the technology area.

Companies that have invested heavily in metaverse have been acquiring, building and strengthening their patent portfolios associated with metaverse to build IP moats to build long-term compound competitive advantage. The complex IP moat served as a spiritual anchor as engineering and r&d teams adapted to the transition to the metasverse.

A company that creates an IP moat in the metasverse

Meta-universe technology can be divided into four key areas: end-user devices, the hardware stack that drives end-user devices, development platforms, and applications. Here's an overview of the IP moat of big companies in these four areas.

1. End-user devices (AR/VR headsets): As of 2021, Meta has the largest share of the VR headsets market with its Oculus Quest 2, followed by SONY's PlayStation VR and Microsoft's HoloLens. According to our internal research, although Meta is the market leader with more than 1,000 patents covering end-user devices, Samsung has about four times as many patents in this area.

2. Hardware stack (Gpus, chips): Nvidia currently leads the market for AI chips and graphics, and plans to invest heavily in metaverse and related technologies. According to more internal research, Nvidia's IP moat of 25 patents is far weaker than Samsung's and Microsoft's, which each hold more than 300 patents in this category. With Nvidia now aiming to become one of the leading development platform companies and partnering with Meta to build the largest AI supercomputer, it will be interesting to see how they strengthen their IP moat.

3. Development platform (game platform): Games will thrive in the meta-universe. Unity Software is the leader in game development platforms with over 50% market share in the second quarter of 2020. While Unity is the market leader in this area, Microsoft has the largest patent portfolio, with more than 200 patents.

4. Apps (gaming, social and enterprise): Microsoft has the largest market share in this space, dominating the enterprise app/software market with Office, Teams and LinkedIn. It also has one of the strongest portfolios, with nearly 4,000 patents. It was followed by Intel, Google and Apple. Microsoft recently bought game maker Activision Blizzard to further strengthen its position in this area.

conclusion

Metaverse technology is evolving. Protecting innovations and turning them into patents will be a key business strategy for Metaverse to stay ahead of technological disruption. Building internal IP processes that enable the executive team to anticipate shifts in technology paradigms is an important step in building an IP moat.

Here are some guidelines to help companies prepare for this change and start building their IP moats.

1. Enhanced defensibility: Conduct a thorough internal assessment of the existing intellectual property (trademarks and patents) covering your product by measuring coverage and strength. For areas not covered, evaluate and acquire new intellectual property to cover these areas.

2. Assess enforceability: Thoroughly assess the coverage of your current intellectual property (trademarks and patents) over competitors' products and measure the extent and strength of that coverage.

3. Create opportunities: Conduct a detailed analysis of the metasexes technology field to assess the gaps and assess the potential of your current intellectual property to cover those gaps.

The meta-universe offers many opportunities for innovative companies to both develop new products and build IP moats around them. As companies adjust and innovate in this paradigm shift, the evolution of the meta-universe will take time.