Digital Twins and Industrial Metaverse Licensing in the United Kingdom
Introduction : Digital twins are becoming an important part of industrial design, manufacturing and maintenance. An industrial digital twin is a digital representation of a physical object, machine, factory or process that is connected to information about its physical counterpart. In a sophisticated system, sensors continuously transmit data from the physical asset to the digital model, allowing engineers to observe performance, test modifications, identify faults and predict future conditions.
A digital twin of a jet engine may reproduce its geometry, operating conditions, component behaviour and maintenance history. A digital twin of an automotive factory may represent production lines, robots, material flows, energy consumption and safety systems. The objective is not merely to create a visually accurate model. It is to create a computational representation capable of reflecting, analysing or simulating the behaviour of the physical system.
The industrial metaverse develops this concept further. It may provide a shared three-dimensional environment in which engineers, suppliers, manufacturers and customers interact with digital twins, simulations and data services. The commercial value lies in collaboration, testing and decision-making rather than in virtual entertainment.
This creates a complex licensing problem under UK law. A single digital twin may contain software, computer-generated images, engineering drawings, databases, sensor data, confidential know-how, patented features, registered designs, trademarks and third-party tools. Ownership of the physical asset does not automatically determine ownership of every right in its digital replica. The licensing agreement must therefore allocate rights across multiple layers and explain how the twin may be used within the industrial metaverse.
What a Digital Twin Contains
A digital twin usually includes several distinct elements. The first is the geometric model. This may consist of three-dimensional representations of the physical object, including measurements, surface features, component structures and spatial relationships. The model may be created from computer-aided design files, scanning, engineering drawings or a combination of sources.
The second is the software layer. Software controls the display, simulation, data ingestion, analytics, visualisation and interaction functions. A digital twin may use proprietary code, open-source libraries, artificial intelligence tools and cloud-based infrastructure. Each component may be subject to different rights and licence obligations.
The third is the data layer. Sensors may generate information about temperature, pressure, vibration, fuel consumption, structural stress, production speed or energy use. Historical maintenance records and engineering databases may be connected to the twin. The data may be raw, processed, aggregated or interpreted through machine-learning systems.
The fourth is the industrial knowledge embedded in the model. This may include tolerances, failure modes, manufacturing methods, maintenance procedures, testing assumptions and performance thresholds. Such information may be more commercially valuable than the visual model itself because it reveals how the manufacturer designs, operates and improves the asset.
The fifth is the interface and virtual environment. If the digital twin is accessed through an industrial metaverse, the environment may contain avatars, dashboards, virtual equipment, branded spaces, training modules and collaborative tools. These elements can create additional copyright, design and trademark issues.
The legal risk arises because these elements may have different owners. An aerospace company may own the engine design but commission a software developer to build the twin. A supplier may own the sensor platform. A cloud provider may control the hosting environment. A customer or operator may generate much of the operational data. Without contractual clarity, the parties may disagree over who owns the completed twin and who may exploit it.
UK Intellectual Property Framework
UK intellectual property law does not contain a single right called “digital twin ownership.” Protection must be assembled from existing legal categories.
Copyright may protect software, technical drawings, databases, graphical interfaces and certain digital artistic works. The UK Government’s research on intellectual property and metaverses notes that the UK uses a closed list of copyright subject matter, meaning that a creation must fit within an established statutory category to qualify for protection. A digital twin may therefore receive protection through its software code, database structure, drawings or computer-generated visual elements, but not every aspect of the twin will automatically be protected.
Database rights may also be relevant. The person who makes the substantial investment in obtaining, verifying or presenting database contents may obtain database protection. However, the owner of the underlying physical asset is not necessarily the owner of the database generated through operating it. The parties must examine who collected the data, who invested in the system, whether the data are personal or industrial, and whether a database right exists.
Patents may protect technical inventions implemented through the digital twin. For example, a patent may cover a method of monitoring engine performance, a control system, a predictive maintenance process or a technical interaction between software and machinery. The digital representation itself may not be patentable merely because it is virtual, but a computer-implemented invention producing a technical effect may raise patent issues.
Confidential information and trade secrets are especially important. The UK Government’s rapid technology assessment identifies security of the sensitive data underpinning digital twins as a critical issue and highlights data ownership and protection as continuing challenges. Industrial models often disclose manufacturing tolerances, system vulnerabilities, performance limits and maintenance practices. Even where copyright is uncertain, confidentiality obligations may protect the information if it has the necessary quality of confidence and is subject to reasonable protective measures.
Design rights and trademarks may apply to virtual representations of physical products. A virtual model of an aircraft, vehicle or branded machine may reproduce protected visual features. UKIPO guidance confirms that goods and services delivered through the metaverse can be classified under existing trade mark categories rather than being legally outside the trade mark system. A company using another party’s brand in a virtual training or commercial environment may therefore face infringement or passing-off risks.
Industrial Metaverse Licensing
Industrial metaverse licensing differs from ordinary software licensing because the licensed subject matter is dynamic. A conventional software licence may concern a defined programme and version. A digital twin changes as the physical asset changes, as new sensor data arrive and as software models are updated. The licence must therefore address continuous development rather than a fixed deliverable.
The agreement should begin by defining the licensed materials. The licence should also define the permitted field of use. An aerospace manufacturer may authorise a supplier to use a digital twin for maintenance but prohibit use for competing product development. An automotive company may allow a joint venture to simulate production but restrict extraction of design data. A factory operator may need access to the twin for operational purposes while the original developer retains ownership of the underlying software.
Sub-licensing is another central issue. Industrial systems involve multiple participants, including original equipment manufacturers, Tier 1 suppliers, maintenance providers, consultants, cloud hosts and regulators. A licence that prohibits all third-party access may make the twin commercially unusable. A licence that permits unrestricted access may expose confidential information and reduce the licensor’s control. A practical agreement should create access tiers, define authorised users and require equivalent confidentiality and security obligations from permitted subcontractors.
Data Ownership and Control
Data are often the most valuable and contested element of a digital twin. The owner of the physical machine may argue that it owns operational data because the data arise from its asset. The software provider may claim rights in processed data because its system collected, organised or analysed them. A customer may claim rights because it paid for the sensors and platform. A maintenance provider may generate additional data through inspections and repairs.
UK law does not provide a universal ownership rule for all machine-generated data. The contract must therefore determine the parties’ rights. The parties should distinguish raw data from derived data. Raw sensor readings may be made available to the asset owner, while processed analytics, predictive models and software improvements may belong to the platform developer or be jointly governed.
The licence should also regulate data use after termination. If a customer changes software providers, can it export the historical data? Can the developer retain anonymised data to improve its platform? May the data be used to train artificial intelligence models? Can the licensor combine data from several customers to create industry benchmarks? These questions directly affect both commercial value and confidentiality.
Security obligations are equally important. A digital twin connected to operational machinery may create a route into industrial control systems. Unauthorised access could reveal vulnerabilities or disrupt operations. The contract should therefore specify access controls, encryption, incident reporting, audit rights, vulnerability management and obligations to delete or return data. In critical infrastructure, security terms should be aligned with applicable sectoral regulation and procurement requirements.
Ownership and Co-Creation
Commissioning a digital twin does not automatically transfer all intellectual property to the commissioning party. Under UK copyright principles, the creator may remain the first owner unless the work is created by an employee in the course of employment or the agreement provides otherwise. A manufacturer that pays a software company to create a twin should therefore obtain an express assignment or a sufficiently broad licence.
Assignments should identify the rights being transferred, including copyright, database rights, design rights and rights in software. They should also address future improvements, moral rights waivers where relevant, source-code access, documentation and the right to modify the system.
Joint development creates additional complexity. An aerospace manufacturer and a software provider may jointly refine a predictive maintenance model. A vehicle manufacturer and a supplier may co-create a virtual production environment. The parties should decide whether the resulting rights are jointly owned, allocated by contribution, or owned by one party with an extensive licence to the other. Joint ownership can be inconvenient because exploitation, licensing and enforcement may require cooperation.
Feedback provisions must also be drafted carefully. If the customer reports defects and suggests improvements, the developer may want to use the feedback across its platform. The customer may object if the feedback reveals confidential engineering information. A balanced clause can permit general technical improvement while excluding customer-specific confidential information.
Infringement and Liability
A digital twin can infringe rights even where no physical product has been made. Creating a virtual replica may involve copying technical drawings, scanning a protected design, reproducing software or displaying a trademark in a commercial virtual environment. The UK Government’s metaverse research recognises that digital twins can be created rapidly through sensors, real-time data and machine-learning analytics, which may make copyright and licensing questions arise alongside the physical object.
Liability must therefore be allocated among the parties. The developer may warrant that its software does not infringe third-party rights, but may exclude liability where the customer supplies infringing drawings or directs the development. The customer may accept responsibility for data and models it provides. The agreement should also address claims resulting from modifications, interoperability with third-party systems and unauthorised access by users.
Indemnities should be matched to control. A party should not provide unlimited protection for risks it cannot manage. Liability caps may need exceptions for confidentiality breaches, data misuse, intellectual property infringement, fraud and cybersecurity incidents. Industrial customers may require higher protection where the twin is used in safety-critical decisions.
Conclusion
Digital twins are transforming industrial metaverse licensing by connecting virtual models to physical machinery, live data and operational decision-making. In the UK, protection may arise through copyright, database rights, patents, design rights, trademarks, confidentiality and trade-secret principles, but none of these rights independently answers the question of who may access, modify, commercialise or transfer the twin.
A durable licence should define the components of the twin, allocate ownership, regulate data, permit controlled third-party access, address updates and derivative models, and establish security and liability rules. It should distinguish rights in the physical asset from rights in the digital representation and should anticipate the involvement of suppliers, maintainers, cloud providers and customers.
For aerospace and automotive businesses, the key lesson is that a digital twin is an operational asset, not merely a digital image. Its legal value depends on the data, software, engineering knowledge and permissions that allow it to function. Industrial metaverse licensing will therefore succeed only when intellectual property protection is integrated with data governance, cybersecurity, interoperability and lifecycle management.
Author:- Amrita Pradhan, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing.
References
- UK Intellectual Property Office, IP and Metaverse(s): An Externally Commissioned Research Report (2024) https://www.gov.uk/government/publications/ip-and-metaverses-an-externally-commissioned-research-report/ip-and-metaverses-an-externally-commissioned-research-report accessed 16 June 2026.
- Government Office for Science, Rapid Technology Assessment: Digital Twins (2023) https://www.gov.uk/government/publications/rapid-technology-assessment-digital-twins/rta-digital-twins accessed 17 June 2026.
- UK Intellectual Property Office, ‘PAN 2/23: The Classification of Non-Fungible Tokens, Virtual Goods and Services Provided in the Metaverse’ (3 April 2023).
- Copyright, Designs and Patents Act, 1988, Section(s) 1, 3, 4 and 9.
- Copyright, Designs and Patents Act, 1988, Section(s) 50A and 50D.
- Copyright and Rights in Databases Regulations, 1997, SI 1997/3032.
- Patents Act, 1977, Section(s) 1 and 3.
- Coco v. AN Clark (Engineers) Ltd., 1969 RPC 41 (Ch).
- UK Intellectual Property Office, An Analysis of the Metaverse IP Landscape (2024).
- European Union Intellectual Property Office, The Impact of the Metaverse on IP Infringement and Enforcement (2024).
- Centre for Digital Built Britain, National Digital Twin Programme, The Gemini Principles (2018).