Aaron Conant  0:18

Happy Wednesday, everybody. My name is Aaron Conant. I'm the co-founder Managing Director here at BWG Connect. We're a networking knowledge sharing group with 1000s of brands. And we do exactly that we network and knowledge share together to stay on top of news trends, strategies, pain points, whatever it might be that shaping digital. I spend the majority of my time talking to brands and trying to figure out hey, what do you what are you most interested in? A lot of times, it's pain points things are trying to solve for and other times like this. It's like, what's next? What do we need to be concerned about for what's around the corner? So we got some great friends, partners, supporters, the network over at Vorys eControl. We've done a ton with them over the past five years, a lot on the unauthorized reseller space and brand protection as a whole, usually in the physical goods space. But then more recently, a lot of questions around, you know, NFTs, the Metaverse, and so Adam’s here and I’ll kind of kick it over to you, if you want to do a brief intro on yourself and Vorys eControl, that'd be awesome. And then we can kind of jump into the deck a little bit sound good?

Adam Sherman  1:18

Yeah. Thanks, Aaron. I appreciate it. as Aaron mentioned, my name is Adam Sherman. I'm a partner at Vorys eControl. I've been with the group since the beginning. We primarily help clients, you know, navigate the eCommerce space, protect against unauthorized sellers and all sorts of brand protection infringement issues online.

Aaron Conant  1:43

Yeah. So just a reminder, if you have questions, or were, you know, drop them in, you know, comments, drop them in the chat or the q&a, and we'll, we'll get them answered as we go. Like to tackle those real time. Awesome. So I'm gonna kick it to you. And if you want to roll through, and we'll just pop up questions as we go.

Adam Sherman  1:58

Absolutely. Sounds good. Yeah. If you have any questions, feel free to drop them in, and I'll do my best to answer them. Yeah, today we're talking about brand protection. In a decentralized world. We'll talk a little bit about Web3, the Metaverse and NFTs. The purpose of this, in my mind is not to try to cram a bunch of technical knowledge about these sorts of things. There's a lot of material out there where you can do that. It's changing all the time. It can be very complicated. But what I want to do is kind of just focus on why brands should care about this, why they should care about it now and things that you can be doing now, to make sure that your brand is ready to delve in once the once the once it's the right time for your brand. And I want to start off by kind of acknowledging why you know why some brands feel like they don't want to do anything within this space right now. Because there's a lot of craziness going on. There's a lot of silliness. There's a lot of things that seem like scams. And I think we have to acknowledge that to kind of understand where we're at now. We're going to talk about how things are going to change and how there could be very useful applications of this technology going forward. So if you look in the news, you see all sorts of things about these images of apes being sold for hundreds of 1000s of dollars. If it's not the apes, it may be the crypto punks, which are these blocky kind of, you know, images. You read about people being scammed out of ownership of these NFT's, you know, having to pay exorbitant amounts of money to get them back. A lot of it doesn't really make sense. It's it seems highly suspicious. Even Bill Murray, got scammed in the process and supposedly $180,000 worth of cryptocurrency in relation to an NFT auction. When you look at the market trends overall, you know, the markets are pretty volatile and have you know, crashed recently, several months ago, you had a large volume of sales happening at these NFT marketplaces. That has crashed a bit following the disruption of the cryptocurrency market. You know, again, several months ago, the most popular cryptocurrency Bitcoin was trading at about $40,000 per Bitcoin. It's been cut in half it's still $20,000 per Bitcoin that's still pretty good. But that's, that's a pretty volatile market, and certainly, you can understand why people would want to stay out of it. Again, just to focus on some of the insane amounts of money that supposedly gets exchanged with respect to these, these small not great pieces of art. And you know, you may think I wonder why that is exactly and I can't fully explain it. But it's it's not, I can tell you at least this a lot of these NFT sets that you read a lot about, they're really not about ownership of the image themselves. They're kind of exclusive clubs, that a lot of early entrants into the Web3 in NFT space are a part of, it's almost like a badge of honor to show that you're a part of this exclusive group. And in supposedly, that's what contributes a lot to the value, but it's a great

Aaron Conant  5:34

I think there was a huge question that comes up is why $512,000 is it's not it's not to use or the resale a lot of it, it is, you know, you're paying money to be part of exclusive. You're saying exclusive club.

Adam Sherman  5:51

Yeah, I think that's a huge part of it. Now, do I necessarily think all of these transactions are bonafide transactions between disinterested third parties? Maybe not. But there is money being exchanged? And right, it is it is all about kind of exclusivity and being part of that club. But despite target,

Aaron Conant  6:11

no what stuck what stop somebody from creating another crypto punks that looks just like that and selling it?

Adam Sherman  6:18

Well, that's a, you could absolutely do that you could you could create one that looks very similar. It's not, you know, the the way that the blockchain works, it's pretty tied down to be able to distinguish the imitation from the actual version and where it comes from. So you could have ones that look similar, but kind of built into the technology that's that exists on a particular blockchain, there are processes in place that prevent perfect duplicates, or at least ones that are, you know, signed the same way and in with that sort of badge of authenticity. But yeah, so you know, despite all of these kind of scammy sorts of uses, I think it's really important to think about all of the big companies that are investing heavily in blockchain technology. And it's not just the startups centered around blockchain or Web3, or NFT's. These are pretty well known companies, in a lot of different industries. You've got finance, industries, technology, consumer products, insurance, you know, automobiles and entertainment, all investing a lot of money in this technology. And I think that shows a, you know, on their part and understanding that the this sort of technology is going to be a big part of the future of the internet. And it's not just little investments here. And there, you've got millions of dollars being funneled into development projects, by very mainstream companies. I really emphasize this point, which is why I've done a number of slides on it. This is it's so widespread, it's almost Yeah, to start thinking about, well, what are these companies understand that my company doesn't? Or why are they investing in it? And I think that that really shows their commitment and understanding that this is, this is part of the future. And even during that crash that I talked about, the fundraising hasn't really gone down, it's been pretty stable. You know, even as of last month, we're still have, you know, millions of dollars being invested. So this is not something that people are pulling weight away from, despite the volatility. So, again, why should brands care? You know, all of this, I think the big point that we got to look at is that we are in the very early stage of what's going on with NFT's in the Metaverse. I mean, the current uses, there's a lot of prospecting out there. There's a lot of you know, scams out there. But this technology is going to evolve in the use cases for it are going to evolve. I've already talked about how all these major companies are investing a lot of money into it. And there's got to be reasons for that, particularly when you look at some of the kings of the Internet right now. We're all very familiar with Facebook, you know, are now Meta, one of the top social media companies investing as heavily as anyone in web 3.0 in the Metaverse, they're, they're at the forefront they are because they understand that if they don't evolve, if they don't start to get into this, that someone else will and they could be left behind. One of the helpful ways I think of looking at it is we when we think about the origins of the internet, or at least when it started to get adopted by mainstream consumers. There were a lot of technological barriers in place. When we're thinking about the 90s. In order to get into the internet, you had to use a dial up modem through your landline. You connected at a very slow speed through a couple have, you know, big providers like America Online. And when we when people started to get onto the Internet, you the the use cases for it became really intriguing like having all this information at your fingertips that you could access any time. But the technology really had to catch up, we needed high speed internet access, that would be able to connect people to it, because the the modem thing wasn't going to work for all of the use cases that we were thinking about. We didn't have smartphones yet, that still needed to be invented, that took time, there's a lot of technologies that need to develop, to get to the point where we're at now and have been for a little while forever, where most people have access to high speed internet, you know, in the palm of their hands. And the difference there is I think we all, you know, at an instinctual level understood the usefulness of the internet, but we just couldn't access it quick enough or in a convenient manner. With, you know, with Blockchain with Web3, with all that technology. It's it the technology is already pretty highly developed, it's almost ahead of the use cases. So as we start to kind of develop those use cases for it, which we'll talk about more in a bit. A lot of the technology is already there. And we could be in a situation where before you know it, it accelerates gets mainstream adoption. And then a brand's are going to be behind the eight ball because they weren't prepared for all of this. And I think it's very clear that blockchain technology, which is kind of the the main technology behind web 3.0, and NFT's is going to have a profound effect on eCommerce. And I'm just going to try to touch on a couple of ways where I think that will be the case, there's going to be enhanced security. The one of the main benefits of blockchain is is how the information on it is verified. It's it's almost hack proof from a from a Situ from the standpoint where if someone wanted to kind of change information on the blockchain, you'd have to have a majority of computers that were accessing the blockchain simultaneously change the data, or it will be rejected. So it there's there's some inherent security in there. It can provide protection against data breaches, and fraudulent transactions. For that reason, we might think of sort of self executing escrow transactions, if I'm paying a lot of money for something, and I don't have that product in my hand. That could be problematic, particularly if you don't have a lot of confidence in the buyer. But the way blockchain works, so you could have currency, you know, being held in escrow. And then once you receive the product that automatically gets released without any further intervention by a third party. There's less potential for fraud with payments. I know a lot of brands a lot of companies deal with credit card fraud all the time. Because if someone uses a stolen credit card, you may get an order, you may ship out a product only to get a chargeback weeks later. And by then you're out of that you don't have the product anymore, the money gets pulled back by you know, MasterCard, or Visa and your your there's nothing you can do about it. But the way cryptocurrency works, that you know that money gets transferred, and there's not going to be a way to claw it back those those transactions happen very quickly and instantly, and protect you know, the person that received the money from those sorts of clawbacks that are very common with with more conventional payment systems. There's a lot of talk about better Supply Chain Management, its base, Blockchain is a publicly accessible digital ledger that can be shared securely among everyone in your supply chain. And it can be the one place where all that information is stored. So it the coordination that you can do the transparency across the supply chain, a lot of a lot of people think that's going to revolutionize how the supply chain works. There's also related to that, you know, potential ability to digitally track products and shipment in a very secure way. They're the way blockchain works. So you're going to have an expanded access to consumers. You don't need to have a credit card, you don't need to have a formal banking relationship. When you're operating in cryptocurrency, you could securely pay for things without having any relationship with a bank. So there's a potential to open up commerce transactions to consumers that maybe don't have conventional banking. Again, I think that the the concept of no chargebacks could be huge for companies because the money is transferred, you have it. There's not a central authority that can take that back from you. And I really think this is probably the most important thing to consider about there's just a huge potential for increased brand and consumer interaction, particularly through the use of NFT's. You know, brands can have NFT's that their customers own, that you can be used to validate that a customer is really enthusiastic about your brand that has purchased a lot of products. And that can be used to give all sorts of benefits. And I'll talk a little bit more about that going forward. But I think the main point is, is that this technology, perhaps in these ways, perhaps in others, is really going to affect eCommerce beyond kind of the the more the way that a lot of people think it will where we're going to be looking at wearing virtual goggles and in a shopping mall, that that may happen as well. But I want to stress that this technology goes far beyond that sort of virtual shopping situation. It's really what we're talking about is evolution of the Internet, the next stage of the internet, how we interact with computers, how we interact online. You know, when we talk about Web3, that's kind of a general term for that next step in the internet, it's a collection of technologies that's going to make, you know, that makes NFT's possible that makes the Metaverse possible. So when we talk about Web3, that's really what we're talking about. And I want to, you know, make this point just because I feel like it when I'm talking with brands, it could really help them understand where, where all this technology is headed. So when we talk about Web1, the first generation of the web, that is the very early internet, when you would you would get on you would go to a web page, and you would see information. And that was useful. It was a resource you didn't have there wasn't interactivity, audit, you know you didn't users in postings themselves was more about static websites. When we talk about Web2, that's kind of where we're we are now maybe we're a little bit in the Web3, but mostly, it's Web2, where the Internet became interactive. It was very centralized around major providers, like social media companies, Facebook, Twitter, those are the central platforms that people access. But there's also you know, Google, and a lot of those those other platforms that aren't necessarily social media that you access, we were able to share information on the internet, we were able to interact with others on there. And that's to a large degree where we are now when we talk about Web3, the future of the internet, you know, the main things that are going to be different is that it's going to be a lot less centralized, decentralized, you know, not as platform dependent. Right now, you may have accounts on various social media platforms, very various shopping sites. The idea behind Web3 is that a user will get to control their digital persona. Sometimes it's called like a digital wallet. And they'll be able to, you know, use that account use that means of access, use that information to access all the different platforms. And the user gets to control that digital wallet, that digital persona. And it gets accessed by the various platforms. You know, the big part of Web3 is, you know, the blockchain, which is the technology that empowers. You know, when we talk about the Metaverse and NFTs, and cryptocurrency, you know, we have what we talked about a little bit earlier, various privacy and security built into the infrastructure of Web 3.0. It's just part of how it's going to work. Then we also have the other things that we that we see a lot when people talk about the Metaverse, it's 3d graphics and environments. But what I come back to, it's all going to be about connectivity, putting power in back into the users hands, to interact with everything that's online. So to talk a little bit about NFT's I don't want to get very technical about it. But what I want to just kind of talk about it in general concepts that I think are important to brands in a very general level. An NFT is a means of establishing ownership over digital assets. That's one of the kind of the blessings and the curses of digital assets right now. They're very easy to copy. They're very easy to duplicate. There's really no way to prove that you own it within the technology. Obviously we have things in the law, like copyright and trademark that can help establish ownership. But when something is online, whether it's you know, a piece of art, a picture music, you know, a bunch of texts, it can be copied so easily and quickly. And it's very hard on the technol technological level to establish ownership over those sorts of digital goods. And the other thing is that NFT's introduced the concept of scarcity, to virtual goods. And, again, this is a blessing and a curse. One of the great things about digital goods is that, in theory, they can be spread around, there's no extra cost for duplicating them. But when you think about what makes something valuable, so much of it is tied to scarcity, you know, gold is valuable, because there's not an unlimited supply of it, in the same concept applies to practically anything. So there's a lot of things that can come out of the fact that we can make digital products scarce in some ways. So to talk a little bit about what that means, like, what are some of the use cases that we'll have for NFTs, I don't know for sure what they're gonna be. But I've talked to a lot of people in this space. And there's a lot of really interesting concepts out there. Obviously, you know, digital tickets would be one way, you know, used to go to a concert, you would have your ticket, you would maybe keep the stuff as a souvenir, but you know, you have a digital ticket now. And you know, once that ticket gets scanned, if there's some artwork or something attached to it, that is now your souvenir from that concert, and that can be stored in your digital wallet, and your parents are not going to clean out your room, after you move out and throw it away, it's always going to be there, you're going to have it. And I think that's the benefit. You can use NFT's to provide access to exclusive content and deals for your best consumers, the NFT being in their digital wallet that can validate them to you and know that, oh, this is a person that buys a lot of our products, we're going to introduce a new product line. And let's give everyone that that everyone all of our good customers early access to that. And this is a means of validating who they are, it really has the potential to do some amazing things with brand customer interactions. And also, one of the one of the intriguing uses that I've heard is that, you know, tagging an NFT to a physical good, like let's say, you go and you buy a new car, in that car comes with an NFT that goes in your digital wallet, whenever you take your car in for maintenance, or, you know, any sort of any sort of work being done on the car, all that can be recorded and tied to that NFT. So instead of having to keep paper records of all the maintenance you've done, it's there in the NFT. If there's a recall on the product, and you get that taken care of that can all be included on the NFT we go to trade in the car, the dealer verifies that all that's been done via the NFT. There's no paperwork, it's all digitally trapped in electronic. And that could apply to all sorts of goods, high end luxury goods or anything just to be able to validate what the product is you might have bought a refrigerator. And you know, it's a particular brand, but all of a sudden, you need to replace the water filter, and you go online and you see oh, there's 30 different water filtered water filters that it could be, but it could, you could validate which one you have with that NFT. And you would know exactly what parts that particular item needed. So there's just all sorts of really interesting ways that we could use NFT's are just very much scratching the surface there. So turning to brand protection a bit, I'll kind of want to come, you know, start with these three main takeaways, and I'll go over them at the end. But we talked a lot about how the internet is evolving. And that current uses of the Metaverse and NFT's may seem silly or not mainstream, but they're going to be a big part of the Internet's future as the use cases evolve. I think it's important that brands start preparing today, to make sure their IP rights are secured. In this new space, you know, one of the things that, you know, in particular is just because you have a trademark that protects the physical version of your product that may not apply to virtual versions of it. And there are ways that you can do that, you know, the trademark offices all over the world are accepted are starting to process registrations for virtual goods. And if you're a brand that thinks you're going to participate in this space, virtually, it may be important to secure those trademarks. And there's no better time than today before it becomes an issue to start doing that. That in general is going to be like and-

Aaron Conant  24:29

I see we're almost at a time here. But you know, I'm thinking of that, you know, the brand of the trademark where you know, somebody launches your brand internationally, this is, you know, in the past, right, and then you have to either go buy it, you know, in China was a perfect example, right that my previous brands, they'd already taken the brand name and gotten a trademark there. Were using it for me to use an app to go buy back. You're saying this could potentially happen in the Metaverse.

Adam Sherman  24:59

Yeah You've you've got to, you've got to approach a

Aaron Conant  25:02

major brand, you have to do it or somebody will just grab it and run with it.

Adam Sherman  25:06

Right? It's important, you want to start doing that now before that happens, and then I'll go through quickly for the rest of this. I know we're running up on time. And you should start thinking about protecting yourself now on some of these, you know, Web3 NFT marketplaces, because there's already a lot of infringements happening. There's a lot of brand protection challenges. You know, anonymity and pseudonymity is a big problem online. Now, it's even bigger in this space. The, you know, Web3 is designed to help users stay anonymous. So that gives you that causes all sorts of issues when you're trying to, you know, protect your brand. NFT's can't be destroyed either, they can be quarantined off, what you call burned, but you can't just remove NFT's from a blockchain, once they're created. There's we talked about how it's decentralized, there's no central authority that can fix things for you. So you got to do a bunch of things to work within the system to protect your brand, it's not the same as being able to report to, you know, Amazon, to remove this listing, or Facebook to remove this content. I talked already about making sure that your trademark classes, your trademarks are registered to include virtual goods. Right now, we're, we're dealing with a lot of secondary marketplaces, there's a bunch of them that are out there, they're, you know, these are some of the big ones. They're all over the world. And you can see the various traffic numbers. And again, I'm happy to share the slides with anyone I'm gonna go over pretty quick because we're running up on time. But, you know, if you go and you search for your brand, I did some searches for Rolex, there's all sorts of content on there. Now, that's probably not authorized. That's using Rolex as trademarks. And people may think that this is associated with them. You've got people that are registering what we call blockchain domains, like that Ferrari dot eath. And that can be used to impersonate the brand, how a brand operates. And web 3.0 is largely going to be determined by you know, their identity is going to be associated with these blockchain domains. And if this is, if Ferrari doesn't own this line, and someone else does, there's all sorts of things that can be done, there that aren't great. Our approach to enforcing in protecting is kind of the same as what authorities does for a lot of online brand protection, we want to make sure you have that foundation in place, we want to make sure that we're monitoring the various channels and prioritizing the biggest infringers, we want to use investigation where we can to figure out who's behind them that we want in a regular enforcement strategy to make sure that we're getting those removed. Thankfully, a lot of these online marketplaces are pretty good about responding to intellectual property complaints. So we, we work with them a lot, and we can get those removed. But it's important to have kind of a systematic way of handling it, because there's a lot of these marketplaces out there, they vary a lot and in how much traffic they get, they vary a lot per brand about who you know, where the biggest problems are for your brand, and maybe on one of the smaller parts, you know, marketplaces that has a lot of infringement going on. And we want to make sure that it's tailored to protect your brand. And then we can regularly monitor those, figure out the types of infringement that we're seeing, and then put a plan in place to use your IP to get those infringements removed. So it's similar to how we approach a lot of brand protection, we want to make sure it's tailored to your brand. And what we're seeing. So again, returning to these takeaways, the best time to get get your house in order is right now, you know, make sure you have those registrations in place. And then you know, start, don't ignore the space, don't let it get out of hand before you try to fix it. Because it's much easier to keep it clean and get it clean. But again, I'm happy to talk about this with anyone I know we're up on time, but happy to answer any questions that have come up.

Aaron Conant  29:02

Yeah, I just said, one. We can connect you with them where and how do we register? And so I think that's, I mean, I just see that we're over. I want to be respectful of time, but more than happy Adam to connect to you.

Adam Sherman  29:15

Yeah, it again, this is this is a big area. This is a short presentation. There's there's a lot to say here. And I'm happy to have conversations with anyone who wants to follow up with specific questions. There's my contact information, you should all feel free to reach out to me.

Aaron Conant  29:28

Yeah, we can connect you afterwards. And I think that's it. I think it's, you know, almost like to have an audit done of what's going on currently. And then a Does anything need to be fixed. And then hopefully, there's nothing out there yet. And you're just in a proactive mode. But again, I mean, we saw this happen with Amazon. We saw this happen internationally across multiple marketplaces, brand protection over and over again, the the number one thing that you know, that you had up there, one of the top things was like all marketplaces they're global. And so yeah, so it'll end up being a global issue. Today we're gonna wrap this one up. Adam, thanks so much. You guys are awesome. Really appreciate you and all the education you provide for the network as a whole. Thanks to everybody who dialed in, we'll follow everybody with the connection over to Adam. And with that, we're gonna wrap it up. Hope everybody has a fantastic Wednesday everybody take care stay safe. We look forward to having you at a future event. Alrighty,

Adam Sherman  30:21

Thanks a lot, everyone. Bye