The Challenges Oculus And Google Lawyers Expect For AR, VR Projects

Legal teams at the world’s top tech companies are bracing for a new era — one that aligns the real world with an increasingly expansive virtual one.

Facebook Inc FB’s Oculus and Alphabet Inc GOOGL GOOG’s Daydream already market virtual reality devices and augmented reality toolkits, and the pace of innovation is accelerating. For the most part, business will continue as usual.

“The old rules still apply to the new tech,” Joel Emans, general counsel at The Pokémon Company International, said Tuesday during a panel at the South By Southwest Conference in Austin, Texas.

Developers are designing content and hardware mindful of traditional legal principles around copyright, transformative use, terms of service or use contracts, and consumer protection — and they’re ready for laws yet to come.

“There’s a wide range of other laws that are coming up that will capture AR and VR intentionally or unintentionally,” Holly Nguyen, associate general counsel at Oculus, said on the panel.

Early-stage Internet of Things legislation will “undoubtedly” apply, and unprecedented nuances in community interactions will call for clarifying amendments.

“There’s this real nice, clean divide between laws in digital and laws that impact the physical, and AR/VR inherently merges those things,” Emans said.

Below are some of the lawyers’ concerns and the steps their companies are taking to design tech with timeless legal compliance.

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Health And Safety Liabilities

Industry players are preempting government intervention by issuing VR content ratings around physical comfort and motion intensity; developing environment monitors and “safe space” protocols to protect minors from inappropriate content; and pressing for consistent, cross-platform standards.

“There is a question of whether this is inherently dangerous technology,” Rachael Vaughn, Google product and commercial counsel, said on the panel. “I personally don’t think that the research supports that at all, but one thing that we are doing as an industry is to align and do research together and form policies together to address this so that we avoid the situation where we have a state or a country regulating us.”

Free Speech And Property Laws

Intellectual property lawyers are also anticipating restrictions around AR content planted on physical property — a concern raised during the Pokémon Go craze that drew spirited crowds to somber and sacred places.

“This is going to be a really interesting time in the development of the way the law looks at property,” Alexia Bedat, media law associate at Klaris Law, said during the session. “Do you have a right not to have a virtual object dropped on your front lawn?”

Whether such plantings constitute trespassing, graffiti or a disruptive nuisance will affect the parameters of AR and VR products. As will the determination of free speech priority around virtual advertisement — whether a property owner’s right not to say something trumps a designer’s right to say something.

Designer rights to virtually enhance another artist’s work are also yet uncertain, as the Visual Artists Rights Act, which protects artists from reputation-harming alteration of their work, is not yet known to apply to AR.

Intellectual Property Protection

Lawyers anticipate additional rulings around copyright and intellectual property within virtual spaces, including ownership of collaborative works and opportunity for replication. Potential outcomes are wide-ranging and may result in looser or more stringent design policies.

“At what point does intellectual property law have to advance to reflect the knowledge that there’s infinite replication of IP on some level, or can we actually get to a point where IP through blockchain tech is no longer replicated?” Emans said.

Defamation Of Avatars

The increasing prevalence of virtual interactions might challenge legal notions of personhood, bearing significant implications for content managers.

“If you truly become immersed in a virtual world, does your avatar have reputational rights and privacy rights?” Vaughn said. “Can you commit a virtual tort? Can you injure somebody virtually?”

These aren’t silly theoreticals — not for people spending more time living or accruing wealth in their virtual lives than in their real lives.

“To someone who is doing that and is spending time building a reputation in the virtual world, his or her reputation might mean a lot to them, maybe more than their real persona,” Bedat said.

Consequently, content creators may eventually be charged with actively policing their communities.

Data Privacy

The involvement of data collection and processing also presents unique regulatory challenges.

“With a lot of privacy regulations, we don’t have that real nice comfort yet,” Emans said.

In May, Europe will enforce General Data Protection Regulations requiring consent, notice and purpose for data collection. European subjects will have the right to request all the data a company has on them, the right to be forgotten, and the right to transfer data between competitors.

A lot of state-to-state variables remain around critical issues like child consent ages, which may require corporate flexibility in data collection or consumer accessibility across jurisdictions.

“We still don't know what it's going to look like ultimately,” Emans said. “We’re two months away and there are still a lot of pretty significant questions being hammered out… We need to think about what the scope of potential could be and get ready and plan for how this could shake up.”

In the U.S., states are pursuing similar restrictions and statutes around transparency, purpose and consent.

The regulations place an extra burden on developers to define what data to collect and why.

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Last-Resort Solutions

The cross-border variances will prove difficult for product developers.

“I imagine we'll see some laws that will make it tough for people to operate, and you can go from having a different experience in different jurisdictions that have different laws,” Vaughn said. “In some cases that’s a [lesser] experience, and in some cases it might just be actual work for your engineering team, or completely blocking things from launching in those places.”

Companies can roll out modified products in those regions or, in drastic circumstances, strategically exit those markets.

“If laws go down a path that are so restrictive that they practically disable innovation, that is a nuclear option,” Vaughn said. “I don’t think any legitimate company that cares about its users, Google included, would want to do that.”

And that “nuclear option” might not even be feasible, Bedat said, noting that laws like the GDPR still apply to European citizens even when they leave the territory.

At the very least, then, companies would need to either adjust their baseline content to meet the maximum legal standards or treat certain clients differently, which would prove taxing.

“From technical standpoint, it’s difficult to implement and maintain, it’s difficult to track users and can lead to poor user experience,” Nguyen said.

Image credit: Maurizio Pesce, wearing a Google Daydream VR Headset, Flickr