Trademark law in virtual worlds

Theodore Max, a partner in the New York City office of Sheppard Mullin Richter & Hampton, has written a 42-page article titled Trademarks in the Veldt: Do Virtual Lawyers Dream of Electric Trademarks? For a law review article, it is packed with allusions to science fiction. The "Veldt" in the article's title is the title of a Ray Bradbury story - one of the first (a footnote indicates) to refer to virtual reality. Lawyers of a certain age will recognize the article's subtitle as an intended homage to Philip Dick's 1968 novel Do Androids Dream of Electric Sheep? And the article's opening paragraphs refer to Neal Stephenson's 1992 book Snow Cash - a novel (the article notes) that anticipated that virtual worlds could be developed on the Internet, and players on opposite sides of the world could duel with one another using virtual swords. What does this have to do (you may wonder) with trademark law? Mr. Max explains:
There is no question that the Internet and virtual reality are part of our very fiber. As was the case in Snow Crash, the effects of viral commerce, both good and bad, have had a great effect upon humankind in real life and in virtual reality. Virtual commerce can have a great or grave effect upon the creation or destruction of a brand in the same way that counterfeiting in real life can destroy a brand. The future will show that the problems that are being grappled with in the real world with respect to counterfeiting, famous marks, dilution, and licensing will prove even more vexing in the virtual world.