Real IP Issues Surface In A Virtual World 01/05/2017 by Dugie Standeford for Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)As virtual reality (VR) and augmented reality (AR) technologies emerge, so do legal questions arising from their use. While the issues are still mostly hypothetical, they implicate, among other areas, intellectual property rights, lawyers say. VR and AR “are going to be big – not just for gaming but for work, for social life, and for evaluating and buying real-world products,” Stanford University Law Professor Mark Lemley and University of California, Los Angeles, School of Law Professor Eugene Volokh said in a working paper on “Law, Virtual Reality, and Augmented Reality” posted on 17 March. AR, which the authors define as technology that allows digital content to be layered over the real world, has already made a splash via the popular game Pokemon Go. Beyond AR, they wrote, there is VR, which replaces the real world altogether, and which, like AR, also got big in 2016 with the rollout of four major VR hardware platforms and VR games. Both technologies “present legal questions for courts, companies, and users,” the paper said, but won’t necessarily require a fundamental rethink of legal doctrine. The paper, which considers AR/VR issues only from the US perspective, is here. Copyright Issues In the virtual world, people appear through their avatars. If they design the avatars themselves, they could be subject to copyright and trademark lawsuits, Lemley and Volokh said. Fictional characters’ images together with their unusual character traits are protected by copyright, so users who copy enough of the visuals, character traits or both to be copyrighted expression and not simply an idea might be infringing. If the use is non-commercial and the copyright owner isn’t distributing licensed avatars, the use might be fair use, but selling such avatars without rights owner approval would likely not be fair use, they said. It could also amount to a trademark infringement. Rights holders might choose not to go after individual users or small avatar sellers, but to sue the AR or VR operator for contributory infringement, the paper said. The operator might be immune under the US Digital Millennium Copyright Act, but only until someone sends it a notice-and-takedown request that isn’t quickly acted upon, it said. Established case law sets out the limits of intermediary liability under the DMCA; there’s less clarity about intermediary liability for trademark infringement on the internet but the law is developing, it said. The academics predicted that many of the infringement allegations will be against user-generated works that incorporate works or logos in VR, particularly if those works are copyrighted, rather than the kind of wholesale duplication that takes place online. For AR, however, there will likely be novel copyright issues involving derivative works, the paper said. AR allows users to combine their work with another to create a new work, something people do when they place a virtual Pokemon “in,” say, a sculpture. And while those derivative works are transient, not permanent, there is some case law that considers ephemeral changes to a copyrighted work as infringing, the paper said. IP Issues “Exacerbated” by VR/AR VR is like “really immersive video games” and, as such, brings up, and exacerbates, many IP issues, Lowenstein Sandler LLP (New York) IP lawyer Matthew Savare said in an interview. One of Savare’s clients, Boulevard, provides VR/immersive access to arts institutions such as the British Museum and US National Gallery of Art. The company’s executive summary says it uses a “variety of minimally intrusive photographic, film, and scanning technologies to capture the visual data,” after which the 3D visual “assets” are integrated with qualitative educational content. The offerings allow people to virtually walk through museums and interact with the exhibits. For art works in copyright, Boulevard must, as in the real world, clear rights with the artist and/or museum, Savare said. But whereas before VR the chief issue was distribution, now other verbs –enhance, animate and gamify – apply (so licensing artwork for VR also involves seeking the right to manipulate the work), he said. Under European “moral rights,” artists can prevent their works from being manipulated without permission, but in the US that right is permitted only in very narrow circumstances, he said. “Freedom of Panorama” Imagine a VR app which allows virtual tours of top cities around the world, Dentons (London) technology, media and telecom attorney Andy Lucas and IP lawyer Robyn Chatwood wrote in a 13 March 2017 article, “Intellectual property rights in a virtual world.” The user begins a virtual tour of Paris by walking from the Champs Élysées to the Eiffel Tower, marveling at the realism of the architecture surrounding her while listening to a soundtrack of light jazz. The UK-based developer didn’t seek permission from any copyright owners before launching the app. This appears to raise the same sort of straightforward copyright issues present in the real world, such as infringement by unauthorised reproduction of the musical works, the authors wrote. But in addition, virtual tours bring up the issue of “freedom of panorama” – the copyright in the buildings, architecture and other artworks visible in the tours, they said. Under Article 5(3)(h) of EU directive 2001/29/11 (harmonisation of certain aspects of copyright and related rights in the information society), European member states may introduce a freedom of panorama clause that gives content creators the right to reproduce panorama images or public scenery without infringing copyright, but the right varies from country to country, they said. France chose not to put the exception in place, so the hypothetical app developer would have to check whether its use of panorama images required licenses from the copyright owners of each building and artwork shown on the tour or face heavy penalties for infringement, the paper said. The Denton paper is here. Virtual Trademark Infringement Virtual and augmented reality also pose trademark questions, the Denton paper said. It posed the hypothetical situation of a confectionery company, whose particular chocolate bar is globally famous and has trademark protection in the UK. The candy bar is then featured in a popular VR game, and its virtual form is identical to its real-life counterpart. The chocolate bar appears as the snack of choice of an avatar resembling a celebrity, one the company wouldn’t have chosen to represent its product. The VR game is free to download and play, and is monetised by advertisements that pop up as users play. The game developer, however, hasn’t asked the company for consent to use the candy bar in its game. This is probably a straightforward case of trademark infringement under UK law, the paper said. The mark, which has a worldwide reputation, was infringed, although, it might be difficult to show that the infringement use took place in the course of trade. If however, the product’s trademark doesn’t have sufficient reputation in Britain to establish infringement under UK law, the rightholder would have to rely on other sections of the legislation to establish that the VR game maker used the mark in relation to identical or similar goods or services for which the trademark is registered, raising the “central legal issue in transposing IP rights into a virtual or augmented world: the difference between the trade mark owner’s real world goods and the virtual goods.” That difference creates what may be too high a hurdle for rights owners to clear, but they might be able to rely on common law principles of “passing off” by claiming consumer confusion over the association of trademark for the real goods with the virtual world goods, the Denton paper said. In addition, many owners and operators of iconic buildings also try to register them as trademarks, Baker & McKenzie (London) IP attorney Julia Dickenson said in an interview. And the virtual world throws up other interesting questions as well, such as how to protect new user-generated content, such as avatars, created in VR, or even whether it can be protected at all, she said. For example, trademarks in the offline world can be vulnerable to being taken back if they’re not used for five years, Dickenson. But what if they are being used—in the virtual world? VR adoption isn’t widespread yet because the technology is clunky and expensive, said Savare. If the technology takes off and users and companies spend time and effort creating their virtual worlds, they’re going to want to protect them, Dickenson said. But every time a new technology emerges, we see copyright law “straining and stretching to adapt,” she said. For now, Dickenson advises clients not to try to do anything differently in VR than they do in the offline world with respect to IP, and in particular not to use others’ content without consent. Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related Dugie Standeford may be reached at email@example.com."Real IP Issues Surface In A Virtual World" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.