Facebook paid a lot of money for the name ‘Meta’ which first belonged to a small bank. The $60 million purchase shows how serious Facebook is about the metaverse.
Big deal for trademark
Facebook’s ambitions are such that the social media giant recently paid a South Dakota bank $60 million to acquire the trademark rights to the “Meta” name.
Facebook (which was renamed Meta in October) used a shell company called Beige Key LLC to make this happen. The deal is notable for its size. While $60 million may not sound like much for a company with a market cap of $928 billion, it’s a huge amount in the brand world.
Owning a trademark gives its owner additional leverage when it comes to stopping competitors from using specific words, phrases, or logos. However, it does not prevent someone from using the same name for a related product.
In a typical trademark deal, a buyer pays not only to acquire a name, but also for the goodwill customers associate with a particular product. In the case of Meta Financial, the goodwill comes from the regional banks in South Dakota and Iowa. It also comes from online payment products that, according to the bank, promote financial inclusion.
While Facebook handles payments through its crypto wallet Novi, Meta Financial’s operations have little to do with Facebook’s traditional social media businesses or the metaverse.
This suggests the $60 million deal could serve as a Facebook power play. In this way they can prevent others from using the terms ‘meta’ or ‘metaverse’. Alexandra Roberts, a trademark law professor at the University of New Hampshire, suggested the same on Twitter:
but it’s unclear what “acquire the trademark assets of” means in practice. assignment of trademark rights in gross (without accompanying goodwill) is, at least in theory, prohibited.
— alexandra j. roberts (@lexlanham) Dec 18, 2021
Everyone wants to claim their place in the metaverse
Facebook could thus use its new trademark to exert legal pressure on other companies. Although this would increase the already growing tension over who gets to own the metaverse. While CEO Mark Zuckerberg has put the term at the heart of his company’s rebrand, the wider crypto community has argued that no one should own the metaverse.
Facebook’s approach has been scrutinized before. This came after it appeared to have stolen the @metaverse name from an artist on Instagram. The company subsequently returned the name amid controversy in the media.
However, Facebook isn’t the only company trying to get involved in the rapidly evolving metaverse. A number of brands, including Pepsi and Budweiser, have bought up Ethereum names, NFTs or digital real estate.
Crypto giant Coinbase is also aiming for a position of being the go-to service. For example, it can help its clients manage the NFTs and avatars people use in the metaverse. The company’s CEO, Brian Armstrong, has long been an outspoken advocate of decentralization. Coinbase could therefore play a major role in the metaverse.
The bottom line is that it’s still very early to determine who will control the metaverse. However, giant companies of today’s internet age are willing to spend a lot of money to claim their spot.