The rise and rise of AR and VR: how to stay on the right side of copyright law

The explosion of AR and VR has not only caught the attention of consumers and those working in industry, but also legislators and regulators.

Without doubt augmented reality (AR) and virtual reality (VR) have been the breakout disruptive technology stars of 2016. Innovative start-ups are popping up ever more frequently, each looking to take their share of a market that DigiCap estimates will be worth $150 billion by 2020. AR and VR has been embraced by a wealth of industries from healthcare to defence, marketing to automotive. The explosion of wearable technologies has outpaced expectations and virtual and augmented reality headsets, games and apps are on the wish list of many this Christmas, a further sign of just how mainstream this technology has become.  

However, the explosion of AR and VR has not only caught the attention of consumers and those working in industry, but also legislators and regulators. As more and more companies develop and exploit this technology, they face a myriad of legal issues, perhaps most significantly in relation to the copyright challenges associated with exploitation of AR and VR technology. In a recent Upload Collective report, when asked to select the biggest legal risks in developing AR/VR technology or content, respondents chose technology and IP licensing (19 per cent) and product liability and health and safety issues (18 per cent). Yet they saw this as a much less onerous obstacle to growth as compared to creating compelling content or driving mass user adoption.  

When any new technology is developed, stakeholders and legislators must determine the extent to which existing law stands up to the challenge of being tested by that technology. A past example lies in the safe-harbour exemptions available under EU and US copyright law. Can this legislation, initially designed to protect ISPs, be extended to protect other digital content services? This question has been and will be tested in international courts.  Similarly, the opportunities afforded by developments in AR and VR, which can significantly enhance users’ experience of content and information, bring their own legal complexity, in particular in the context of copyright. So, how well does existing legislation stand up to this challenge? 

Ownership of copyright

VR and AR content will be copyright protected in their own right as films, artistic or (in the case of the code behind the software that powers the product) literary works. They will also likely contain underlying third party works such as soundtracks and scripts. For game developers and film and TV producers familiar with this ‘layering’ of protection for rights of third parties and rights of producers, VR and AR simply presents familiar challenges packaged in a new form. The rights clearance task is to ensure that, for each VR and AR product, all rights are properly cleared so that the product can be used for the purposes intended. Developers and producers will often commission bespoke content to be included in their AR or VR offerings. 

The key question then becomes who owns the copyright in the end product and the underlying commissioned content? The default position varies from country to country. In the UK, if a commissioning contract is silent on who owns the copyright in the commissioned work, the creator automatically owns the copyright. On the other hand, the developers or producers will own the copyright if there is a clear assignment, and/or if the work is created by an employee, unless the employment contract states otherwise. The US takes a different approach, with copyright in “works made for hire” created by either employees or independent contractors belonging to the person that commissioned the work, unless the contract states otherwise. It is vital to establish from the outset who owns the copyright, and ensure that this is made expressly clear in the contact.  

Added complexity arises when users create images and videos through AR apps (for example a picture using a Snapchat filter). Does copyright in the image belong to the service provider or the end user? This is something most service providers tend to address in their terms of use, and it is particularly important for users and those who wish to exploit such content to be aware of the copyright position in those terms of use.

Moral rights

Most countries recognise the concept known as “moral rights”. Moral rights give authors control over the eventual fate of their work, even after they assign their copyright to someone else. They allow authors to protect the personal and reputational element of their work. English law recognises moral rights as the right to be credited as the original author of the work and to object to derogatory treatment of the work, but other jurisdictions differ as to what exactly will be considered a “moral right”. In the vast majority of copyright licences and assignments the author agrees to waive their moral rights. 

However, there are some jurisdictions where that waiver won’t be valid, with France being a case in point. It is therefore important to consider this when exploiting works created by the original author.

Freedom of panorama

The true power of AR and VR technology lies in its ability to bridge the gap between the digital and physical worlds. It is now possible to take users on virtual tours of the world’s most beautiful cities with apps such as YouVisit, while Google Goggles can augment users’ real-life experience of them by recognising famous landmarks and providing overlaid details about their history. These overlays might even include virtual advertising banners. By doing this, AR and VR products are exploiting a whole host of copyright protected landmarks and public art.  

Clearing rights in every protected work featured in the user’s experience can often be time and cost-prohibitive. So what is the solution? Currently, EU copyright law still allows member states to create an exception to copyright infringement known as “freedom of panorama” (although there have been proposals in recent years to limit the freedom of panorama to non-commercial uses only). In the UK, for instance, there is an exception in the Copyright, Designs and Patents Act for buildings and sculptures "if permanently situated in a public place or in premises open to the public". 

Unfortunately, some member states, such as France, have chosen not to legislate this exception, and outside the EU the law is equally variable. In the US, permission would not be needed for public buildings but would be needed for public art, as the US Postal Service found when it was sued for copyright infringement after including a famous Vietnam War memorial on special edition postage stamps.  As a result, VR and AR providers face varying national regulations and should seek local advice for each country in which landmarks they plan to virtualise or augment are situated.

Conclusion

VR and AR therefore throw up some interesting challenges and have the potential to create very real legal risk if not treated in accordance with the existing copyright framework. Fundamentally, copyright legislation in the EU stands up reasonably well to the challenge of keeping pace with this emerging technology. This is largely because AR and VR technology usually results in the consumption of content, and copyright law is agnostic towards the content it protects. It makes no difference if that content is part of a television show, a 3D film, or is delivered via an AR or VR device. 

That said, the volume of clearances that are required in an AR or VR context are often greater than in traditional content ecosystems. This is because the individual user has a stake in determining what they experience, and can guide the content consumption process using more interactive technology than traditional ‘lean-back’ experiences. 

TrendForce predicts that the global market for virtual reality will hit $70bn by 2020. It is a market that shows no signs of stopping. It is crucial that all stakeholders are cognisant of copyright and other legal considerations (such as those related to product liability) and drive mass market adoption while clearing copyright effectively, and avoiding the risk of infringement or regulatory action.

Image Credit: Knight Center for Journalism / Flickr
Sachin Premnath, Associate,
Reed Smith

ABOUT THE AUTHOR

Sachin Premnath is a senior associate in the Entertainment and Media Industry Group. He focuses on advising clients on legal and regulatory matters in the digital media industry.