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Is it illegal to copy Metaverse avatars? Protection of the digital space will change with the revised Unfair Competition Prevention Act to be fully enforced in 2026

Picture of 弁理士 杉浦健文

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As we enter the new year of 2026, the metaverse (virtual space) is no longer a "new playground" but has been fully established as an indispensable "economic sphere" in our business and creative activities.

Meetings in virtual offices, interactions on platforms such as VRChat and Cluster, and buying and selling digital fashion. While these things have become commonplace, there are still serious issues that continue to plague creators and companies.

It is "imitation (copywriting) of avatars and digital items".

"The original avatars we created have been copied without permission and sold at low prices on overseas sites."
"Products that look just like our own brand digital sneakers are being distributed as NFTs without permission."
"The data in the VR space has been illegally extracted."

In the past, problems in the digital space were said to be a ``gray area where the law has not caught up'', and there were many cases in which people were forced to give up on their lives.
However, please throw away that perception today.

The Revised Unfair Competition Prevention Act, which was enacted several years ago, will finally enter the phase of full enforcement (complete with procedural regulations) in April 2026, after the enforcement of digital counterfeiting regulations in 2024. This will move rights protection in the digital space to a powerful and effective stage.

In this article, from the perspective of a patent attorney who specializes in metaverse legal affairs and intellectual property strategies, we will thoroughly explain how the revised law protects avatars and items in the digital space, and what countermeasures are possible in the event that you fall victim to "piracy" - especially against overseas infringers.

1. Why was it necessary to protect "digital space"? Looking back at the evolution of law

 

In order to understand the current legal system in 2026, I will first explain the background of why it has been difficult to protect avatars until now.

Limits of former "morphological imitation" and holes in the law

Let's turn back the clock a little and look back at the situation before the law was revised.
The previous Unfair Competition Prevention Act (Article 2, Paragraph 1, Item 3) regulated the act of making a dead copy of another person's product and transferring it. However, there was a fatal pitfall in the digital age.

The point is that it only targeted "tangible things (physical things)".

For example, if you imitated a real-world handbag and sold it, it would immediately become illegal, but even if you copied a "digital handbag" or "avatar skin data" from the Metaverse and sold it online, there was a high risk that it would be interpreted as not falling under the "transfer of goods" under the old law. Because digital data has no physical substance, it has fallen through the cracks of the law.

Current standard in 2026: Regulation of "provision through telecommunications lines"

The Unfair Competition Prevention Act was revised in 2023 to fill this gap.
With this amendment, "acts of providing services through telecommunications lines" have been clearly added to the scope of regulation under Article 2, Paragraph 1, Item 3 (to be enforced in April 2024).

As a result, the following acts are clearly prohibited as "acts of unfair competition."

[Example of unfair competition]

The act of providing something that imitates the form of another person's product (avatar, digital item, skin, etc.) over the Internet (download sales, streaming use, NFT distribution, etc.)

As of 2026, this rule has become established as a standard in practice. The excuse that "the law doesn't apply because it's digital" no longer holds true. We live in an era where imitations in the digital space are subject to scrutiny just as much as, or even more so than, real products due to their high virality.

＞＞For basic knowledge of intellectual property rights and the latest news, see this list of blogs

2. The borderline for recognition as "copywriting": Where does it become illegal?

Just because something is "similar" doesn't mean everything is illegal. In order to take legal action for violating Article 2, Paragraph 1, Item 3 of the Unfair Competition Prevention Act (imitation of form), several strict requirements must be met. Here, we will delve deeper into the criteria for judgment based on practical operations in 2026.

① "Relying on" (imitation fact)

``Relying'' means knowing the other person's product and making it based on that knowledge. This does not apply if the similarities are purely coincidental.

However, in the case of digital data, proving ``reliance'' may be easier than with real products. This is because in cases where the 3D model's polygon data (mesh structure), texture development, bone setting values, etc. completely match as a result of analysis, it is statistically difficult to believe that it is a coincidence, and dependence is strongly assumed. If it is so-called "ripped" data, the dependence is obvious.

② "Substantially the same" (dead copy)

This is the biggest point. Not only do they have similar ideas or a "cyberpunk-like" feel, but they also need to be substantially the same in form.

This is what is called a "dead copy." For example, if you copy the hairstyle, clothes, and facial features of an avatar created by a popular creator, and only slightly change the color, there is a high possibility that it will be considered "substantially the same."

On the other hand, if an existing avatar is used as a reference, but the avatar is significantly modified in its own way, creating a separate work with originality, it tends to be judged as not imitation. This is because Article 2, Paragraph 1, Item 3 of the Unfair Competition Prevention Act is a provision that prevents "free riding of labor".

③ Provision as a product (business use)

The Unfair Competition Prevention Act is a law that protects fair competition between businesses. Therefore, if you copy an avatar for personal enjoyment and use it only for yourself (in a closed environment), it is generally not subject to regulations.

However, if it is "sold" or "used in business such as avatar customer service", it is considered a business and is illegal. In particular, acts of selling imitation avatars on BOOTH and VRChat marketplaces will be the first to be detected.

3. It's finally here! What “full enforcement” means in April 2026

The title of this article states "Full implementation in 2026". This has a very important meaning in metaverse business.

Although ``digital imitation'' itself was made illegal in 2024, the problem remained that it was difficult to sue ``foreign counterfeiters'' in practice. Because the Metaverse has no borders, infringers are often located overseas.

However, this last piece of the puzzle will be filled when the procedural provisions stipulated in the supplementary provisions of the revised law, such as the ``Review of the service system (services on overseas residents, etc.),'' will come into effect on April 1, 2026.

Let "Japanese law" reach overseas infringers

Until now, in order to send (serve) documents from a court to a person overseas, it was necessary to go through complicated translations and international diplomatic channels (procedures based on the Hague Convention, etc.) that took several months to six months, which effectively allowed for ``escape.''

With full implementation in 2026, procedures at the Patent Office and courts will be digitized and simplified, creating an environment in which overseas infringers can more quickly and cost-effectively file injunctions and claim damages based on Japanese law.

In particular, the system will be strengthened to enable public service under certain conditions, even for overseas businesses that do not have a business office or agent in Japan.
This means that the strongest shield for Japanese creators and companies will be completed. From now on, it will be possible to take firm legal action against counterfeiters hiding on overseas servers.

4. Strategies for using "copyright" and "design rights" in avatar protection

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"If it's a plagiarism of Avatar, shouldn't I be able to sue for copyright?"
Many people may think so. It is true that copyright is a powerful weapon, but for business use, it is important to use it strategically in conjunction with the revised Unfair Competition Prevention Act and the Design Act (design rights). This is because each law has its strengths and weaknesses.

Weaknesses of copyright: Ideas and practical products cannot be protected

Avatars may be protected as "copyrighted works." However, you need to be careful about the "digital clothing" worn by your avatar. Just like real clothes, digital clothes are considered ``practical goods,'' and unless the design has a high level of artistry (applied art), there is a risk that copyrights will not be recognized. There is no copyright in the shape of a "regular T-shirt".

In addition, to claim copyright infringement, you must prove in court not only that the other party relied on your work, but also that your work has "originality."

Strengths of design rights: Registration gives you the strongest exclusive rights

On the other hand, "Design rights" are powerful rights that arise when registered with the Patent Office. Due to legal revisions in the 2020s, image designs and interior designs are now subject to protection, and as of 2026, it has become common for "on-screen images (GUI), space designs in the metaverse, and avatar designs" to be subject to design registration.

If you have a design right, there is no need to prove "reliance (imitation)". Rights can be exercised simply based on the fact that something similar is being used.
However, design rights must be filed before the avatar can be published or sold, as "novelty" is a registration requirement. As a general rule, it is not possible to ``register a product in a hurry after it has been stolen'' (*excluding exceptions regarding loss of novelty).

The role of the Unfair Competition Prevention Act: Shooting "dead copies" without registration

This is where the Unfair Competition Prevention Act comes into play.
The biggest advantage of the Unfair Competition Prevention Act (form imitation) is that it does not require registration. Even if the product does not have a registered design, it is possible to request an injunction or claim compensation for damages against the dead copying company within three years of its release.

In other words, it functions as a safety net to protect ``digital trend products with short lifecycles'' and ``products for which registration costs could not be incurred''.

＞＞Click here for the difference between design registration and trademark registration

5. What you should know about the "three-year barrier" and the importance of long-term protection

The protection provided by the Unfair Competition Prevention Act (Article 2, Paragraph 1, Item 3) is very strong, but there is one major limitation.

Restrictions: Only protected for 3 years from the date of first sale in Japan

This is based on the purpose of the law, which states that the form of a product should eventually become a shared asset of society. However, in the world of Metaverse, there are "standard avatars" and "brand icons" that continue to be loved for more than three years.
If your popular avatar is stolen after 4 years have passed since it was sold, the Unfair Competition Prevention Act will not protect you.

If you want to protect your long-term assets, choose "design rights"

If you want to continue protecting your company's digital assets for more than three years, it is essential to obtain "design rights". The term of a design right isup to 25 years from the date of application.

Now in 2026, the strategy of ``filing a design application for an avatar that you are confident will sell before releasing it'' has become common knowledge among top creators and companies, rather than ``release it for now and see how it goes''.

6. "Impossible measures" that companies and creators should take in 2026

In 2026, the revised law has fully permeated and international enforcement power has increased. What measures should companies and creators take?

[Defense] To prevent your company from becoming a perpetrator

When entering the Metaverse business, the biggest fear is "Unknowingly infringing on the rights of others".
There are an increasing number of cases in which avatar parts that the development team thought were "free materials found on the internet" were actually pirated copies of other companies' products.

Countermeasure checklist:

  • Thoroughly manage the origin of assets: When using an external 3D model sales site or asset store, check whether the creator is trustworthy and what the terms of use (license) are, and keep records.
  • Conducting a similar investigation: Especially before releasing a mainstay avatar or digital item, we recommend that a patent attorney conduct a clearance investigation to determine whether similar designs are already in circulation or whether design rights have been registered.
  • Records of the development process: Keep sketches of the production process, draft data, meeting minutes, etc. so that you can prove that you developed your product independently in the event that you are suspected of imitation.

[Offensive] To protect your products from imitation

Countermeasure checklist:

  • Record of release date (evidence): The starting point for the protection period under the Unfair Competition Prevention Act is the "first date of sale." Be sure to save press releases and sales site logs so you can objectively prove when sales started. Using a timestamp service is also effective.
  • Consideration of design registration: As mentioned above, if you want to protect your brand for more than three years, or if you want to eliminate "similar products" that are not dead copies, design registration is essential.
  • Sending a warning letter: If we discover a counterfeit product, we will first send a warning letter (notification letter) in the name of a patent attorney or lawyer. Under the 2026 legal system, warnings will be much more effective than before. Applications for deletion to the platform will also go smoothly if done based on the revised law.

 

7. Metaverse x future of intellectual property

Now in 2026, we live in an era where the "authenticity of data" is being questioned.
With the spread of NFT (non-fungible token) technology, it has become easier to prove the possession of digital data. However, NFTs are just like "certificates of authenticity" and are not a legal barrier in and of themselves to prevent imitation.

That is why it is essential to protect intellectual property through both technology (blockchain) and laws (revised Unfair Competition Prevention Act and Design Act).

In the future, if the automatic generation of avatars by AI advances further, there will likely be more new disputes where the avatars generated by AI coincidentally resemble existing popular avatars. In such cases, the determination of ``reliance'' and the scope of application of the revised law, as explained in this article, will be major points of contention.
Laws always follow technology, but as of 2026, legislation has finally caught up with technology. A smart business strategy is to make the most of this environment and accelerate business.

Summary: How to succeed in business in the digital space

With the revised Unfair Competition Prevention Act set to be fully enforced in 2026, an environment has been created in which the issue of Metaverse avatar "copying" can be dealt with as a clear violation of rules.

Review the important points.

  • As a result of the revision, the provision of digital data (provision through telecommunications lines) is also subject to counterfeiting regulations.
  • If it is a "dead copy" (substantially the same), an injunction and damages can be obtained even without a design registration.
  • Procedural revisions in April 2026 will make it easier to legally pursue infringers overseas.
  • However, the protection period is 3 years from the date of release. Obtaining "design rights" is necessary for long-term brand protection.

The perception that ``it's just an avatar and it's just data'' is a deadly concept.

At EVORIX Intellectual Property Office, our specialized patent attorneys provide a wide range of support, including the protection of intellectual property rights related to the metaverse and digital content, investigations, and legal checks on contracts.
"My company's avatar may be imitated." "I want to start a new digital fashion business, but I'm worried about legal risks."
If you have such concerns, please feel free to contact us. Based on the latest laws and regulations and practical trends, we will propose the optimal plan to protect your company's digital assets.

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Takefumi SUGIURA, Patent Attorney

AUTHOR

Takefumi SUGIURA （杉浦 健文）

EVORIX Intellectual Property Law Firm　Managing Patent Attorney

Supports clients across IT, manufacturing, startups, fashion, and medical industries, covering patent, trademark, design, and copyright filings through trials and infringement litigation. Specialized in IP strategy for AI, IoT, Web3, and FinTech. Member of the Japan Patent Attorneys Association (JPAA), Asian Patent Attorneys Association (APAA), and Japan Trademark Association (JTA).