NEW TECHNOLOGY

Welcome to the New Reality

Virtual reality is the new technology on the block. But the law has not been able to keep up, creating a realm of trademark issues for brand owners. Sarah Morgan reports.

“Virtual reality (VR) and augmented reality (AR) create an immersive experience for users by simulating the look, sound, and feel of the real world, and allowing users to connect with brands, products, and entertainment offers in innovative ways,” said Jaime Vining, partner, Friedland Vining, P.A. (US), opening yesterday’s session, Virtual Is the New Reality: The Future of Intellectual Property in a Virtual Marketplace.

Unfortunately, the accelerated development of these technologies has also created trademark issues for brand owners.

Noted Ms. Vining: “The legal dangers with this virtual gaming world are largely rooted in the lack of clarity around intellectual property (IP) rights when content and tech come together to produce something new and valuable.”

Allison Rothman, founding partner, Morrison Rothman (US), added that the law has not yet caught up with the technology. However, this is not a unique situation.

“Despite VR and AR being super-sexy topics, in general the IP implications are not much different from how we treat IP issues in gaming,” she said.

“Users know they’re not getting the game; they’re buying a license to use the game.”
Allison Rothman, Morrison Rothman (US)

In agreement, Frank Gregory Casella, legal counsel, Marketing & IP, Electronic Arts Inc. (US), said that the IP and other implications relating to VR and AR regularly surface in other emerging technologies.

“The tech is new, and you might be interacting with the issues in new ways,” he said, “but, for the most part, the toolkit you have is fairly robust.”

One issue the panelists discussed is user-generated content in games. Horizon Worlds, a VR online video game in beta-phase that was developed and published by Meta Platforms Inc., allows users to go into virtual sandboxes and build and create worlds, said Zac R. Rich, lead counsel, Facebook Reality Labs (US).

“Who owns the rights to those [worlds]? Does the creator?” he asked. “The law has not caught up to these types of questions, and there’s no easy answer.”

Ms. Rothman expects to “start seeing a lot more legislation” around this aspect of ownership in the virtual world. She added: “The ownership issues are usually addressed pretty straightforwardly in the terms of service. Users know they’re not getting the game; they’re buying a license to use the game.”

However, she questioned whether users should be able to own their content when the user-generated content is “truly unique and creative.”

“The legal dangers with this virtual gaming world are largely rooted in the lack of clarity around IP rights.”
Jaime Vining, Friedland Vining, P.A. (US)

Mitigating Risks

Mr. Rich added that the tools available today, such as YouTube’s (US) ability to scan for copyright content, do not exist in the 3D space.

“When you launch user-generated content in the virtual world, you’re absolutely inviting users to create infringing material. This is not done purposely, but they’re going to create things they know,” he said.

For Mr. Rich, balancing branded content and user-generated content in the virtual world is crucial and adds a new level of complexity. Imagine, for example, a singer performing in VR versus users creating a fake singer and holding their own concert.

In terms of infringement, Mr. Casella noted that companies should try not to rely on fair use defenses where the VR users have created user-generated content that infringes copyright.

He said: “It’s a totally subjective view. It’s difficult to rely on that as a basis, and it is functionally impossible to review every submission on a content platform to see if it satisfies the level of fair use.”

“There are more opportunities than you can ever imagine inside the metaverse.”
Zac R. Rich, Facebook Reality Labs (US)

Ms. Rothman added that fair use is a “defense, not a free pass” and that there are many myths surrounding this defense, such as “we can use the fair use defense if we use only X percentage of content.”

“I do think that what is partially going to come into play is whether the purpose of the infringing use of the copyright is to make the virtual world realistic and immersive,” she said.

Ms. Rothman cited AM Gen. LLC v. Activision Blizzard, Inc. 450 F. Supp. 3d 467 (S.D.N.Y. 2020), in which the court ruled that the use of the HUMVEE vehicle in a game without a license was acceptable because it was necessary to make the game realistic.

This, she said, was a “very slippery slope and a dangerous concept that comes into play, particularly with VR.”

On mitigating the risk of counterfeits on a VR platform, Mr. Casella said: “Every time a new marketplace comes into being, it’s not as if you have to rewrite the trademark or copyright act. The market changes, the locations where people are hawking their goods and where the goods exist change, but the underlying tools can be incrementally added to catch up.”

An Eye on the Future

The panelists agreed that the COVID-19 pandemic has been hastening the uptake of VR. As Ms. Vining put it, “Our digital lives have become increasingly 3D.”

So, what does the future hold?

Mr. Casella is confident that one of the biggest barriers to widespread adoption has fallen: the cost of entry. Now, more consumers can enter the market and experience VR, which will “build interest” and “cause everything to snowball.”

Meanwhile, Ms. Rothman predicted that while it may seem surprising that brands traditionally used for tangible goods are engaging in the digital space—for example, filing trademarks for digital goods—this is “only going to continue to speed up.”

A session on VR could not take place without mention of Facebook’s (US) rebranding to Meta Platforms Inc., and its announcement that “building the metaverse” is one of the company’s biggest priorities. The metaverse is an online world where people can game, work, and communicate in a virtual environment.

Mr. Rich believes that the metaverse will create a “connected, embodied Internet” and will change the way people can earn an income.

“There are more opportunities than you can ever imagine inside the metaverse. What the metaverse will do for individuals is what YouTube did for the creator community,” he said, adding that there could be opportunities in creating worlds, games, and content for avatars.

It seems that while the pandemic may have created an environment where people are more receptive to VR, resulting in accelerated adoption, this new technology is here to stay, and will potentially change lives.


The views and opinions expressed are those of the speakers. They do not necessarily represent the views of their companies.


Video courtesy of Envato Elements / 2ragon

Friday, November 19, 2021

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