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Advertising, Marketing & Promotions:
5th Edition: Trends in Marketing Communications Law

Virtual Reality >> As Augmented Reality Engagement Increases, Novel Legal Issues Arise

May 24, 2018

While both technologies still show great potential, the pace of evolution and rate of adoption of virtual reality (VR) and augmented reality (AR) began to diverge in 2017. VR continued to experience some initial legal growing pains last year, most notably through the ongoing lawsuit between Zenimax and Oculus. On the other hand, AR – in which computer-generated imagery is superimposed onto real-world content – is expanding much more rapidly due to its lower costs of entry and more widely available technology. Numerous brands have launched AR marketing and shopper experiences, such as programs that allow users to “try on” clothing, make-up or accessories, or to superimpose branded electronic “accessories” onto video content they generate. Meanwhile, new technology that facilitates AR experiences through a web browser obviates the need for a user to download a unique app for each program, further decreasing barriers to entry and use.

Unlike VR, where the entire experience is constructed with bespoke or specifically licensed intellectual property (similar to a highly immersive video game), AR experiences use a combination of constructed intellectual property content and real world or pre-existing content.

Before marketers distribute, or provide technology that enables consumers to distribute, combinations of newly created content and existing content, there are important copyright and trademark law implications to consider. In the copyright realm, are marketers who design augmentations and adornments for famous, copyright-protected statues (e.g., with clothing and sunglasses) creating derivative works of that statue for which a license may be required? Does the answer differ if the program used for the augmentation is built by a marketer for promotional purposes, or could be categorized squarely as First Amendment speech? Meanwhile, questions related to tarnishment and alteration arise under trademark law. If a marketer causes a well-known trademark displayed in the real world to appear differently on a user’s smartphone screen through an AR application (e.g., with a giant red "X" over the mark), would that establish grounds for a tarnishment claim? Would that claim be against the user or the creator of the AR application?

Intellectual property infringement issues in the AR context have not yet been addressed in the courts, likely because AR technology (though increasingly popular) is still relatively new. But as marketers and their agencies see increased opportunities to use AR applications in 2018 and beyond, they should carefully consider how existing intellectual property frameworks may be applied to this new medium so as not to end up as a test case in this brave new world.

Key Takeaways:

  • AR use is expanding more rapidly than VR use because of AR’s lower barriers to entry.
  • AR marketing may have copyright and trademark implications (pertaining to the creation and distribution of derivative works and to tarnishment, respectively) as AR programs find novel ways to “modify” the real world.
  • Marketers and their agencies looking to leverage the use of AR applications should carefully consider if their use may invite the ire of third-party brands and content owners (and, in some instances, what licensing arrangements may be necessary).