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Virtual Reality Content for Education: Legal Concerns, Part 1

 1000 648 David B. Hoppe
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Virtual reality is playing an increasingly significant role in education, especially in the context of classes that are traditionally theory-based and abstract, delivering content has been difficult and uninteresting to students. Not suprisingly, a number of legal concerns accompany the growing use of virtual reality in education.

image2 One legal issue is ownership of property. Formula Student, an educational motorsport competition, challenges engineering students in universities to design and build cars to compete in events. Virtalis, a virtual reality technology company, partnered with a university to design cars in a virtual reality system, which allowed the students to design a car and then decide which one to use rather than try to have each student’s design actually manufactured. In such partnerships, however, there may be a question of who owns a car simulation. Is it the property of the student who designed it, or the virtual reality company who produced it? Could there be joint-ownership? Should the actual design be owned by the student and the finished product be owned by the company? Such concerns should ideally be addressed early on in the transaction.

Another area of education that can otherwise be abstract is medical education. Virtual reality has helped medical students and doctors train on realistic simulations of anatomy, approximating operation on real people as closely as possible. Simulations can even be based on the anatomy of specific patients.zeeboid_burnout

With this development, of course, comes the legal issue of patient privacy. If a virtual reality company produces technology that allows patient anatomy to be copied and transformed into a virtual simulation, the company must safeguard patient medical information. Thus, virtual reality companies should familiarize themselves with privacy laws. Doctors also must be careful not to share information even to the medical community about patients without respecting patient privacy.

While no particular law addresses this use of virtual reality directly since this is a relatively new technology, all parties involved should familiarize themselves with law such as the Health Insurance Portability and Accountability Act (HIPAA) and the Medical Information Privacy and Security Act (MIPSA) simply to get a sense for the general values and standards that U.S. privacy law protects.

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Trademark 101 for Virtual Reality Content Creators

 1000 648 David B. Hoppe
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Like other intellectual property issues, trademark issues may arise in interesting ways in the context of virtual reality. While virtual reality companies face trademark-related concerns similar to those in any industry such as choosing a distinctive name and other distinguishing marks, virtual reality also presents its own challenges. Virtual simulations may draw from reality, or already existing fictional worlds, and the simulation may be created by just one entity, or it may also be built on by other participants. When (in-game) currency is added to the mix, virtual reality companies may want to prepare for challenges from rights holders in the future.

thWith respect to using a similar mark, virtual reality companies face the same general issues as other companies. They should not use a mark – name, symbol, logo, or other feature that indicates a source – that is too similar to the mark of another company in the same industry. Otherwise, they may face a trademark infringement lawsuit. Since the guiding consideration in such cases is whether consumers are likely to be confused regarding the source of a product, virtual reality companies probably need not worry about trademarks in industries wholly unrelated to the industries in which the virtual reality companies are involved. If a company makes video games, it will not invite a lawsuit by having a mark similar to a mark in the baked goods industry. A company in baked goods is not likely to extend into video games, and vice versa. However, it is worth noting that because virtual technology traverses many industries (education, training, entertainment, medical, arts), a virtual reality company choosing a mark should first investigate marks in some related industries.
More specific to virtual reality, simulations depicting reality or fictional worlds may be using protected marks. In such a case, the owner of the mark might sue for trademark infringement. An example might be a game set in a particular city and made to be as accurate as possible, incorporating company names and logos. Another example might be a spaceship setting that looks remarkably like the main room (the “bridge”) on the starship Enterprise from Star Trek. The distinctive design of the famous bridge could arguably be a trademark. If consumers are likely to be confused with respect to the source of a good, an infringement claim may stand, provided the useveil_nebula of the mark is in commerce. So, could a Star Trek setting design in a video game that is sold constitute a use of a protected mark in commerce? In addition, some games may face potentially infringing input from users. Suppose a game allows users to build a city, and a user adds real company names and logos on buildings and billboards. In-game currency may even be exchanged with relation to the in-game use of these real is going on video games, rights holders are more likely to become concerned with these issuesworld marks. With the addition of money (whether in-game or not) being exchanged, companies will be more likely to bring lawsuits. As they become increasingly aware of what

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Collateral Damage: Real Legal Risks for Virtual Reality Companies

 1000 648 David B. Hoppe
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Virtual Reality devices are opening a new universe of possibilities for hardware makers and application developers. However, these opportunities may lead to new and still unexplored liabilities. In particular, the increasing prevalence of head-mounted displays, which often obstruct completely the user’s vision, may lead to increased risks of personal injury and property damages. A typical concern is that of collateral damage: for example, what happens when an user punches a bystander while playing a game?

broken-glassWhen an user or a bystander suffers real damage as a result of the use of a virtual reality device, numerous actors may be liable, and in particular application developers and hardware makers. In addition, users or bystanders suffering damage as a result of actions induced by a virtual reality game may consider a number of legal doctrines to recover from their damages: they can sue on the basis of strict liability for products defects, but also bring claims of negligence, breach of warranties, or breach of more specific regulations (for example, consumer protections acts).

Application developers are the most exposed actors. Even though softwares are fundamentally intangible, their intangible nature does not necessarily relieve their developers from any real-world liability: on a forum dedicated to Oculus Rift games, one can read the developers calling the users to be careful, since “lots of people try to support themselves on the crates when they try to stand up or when leaning up against a column, but find there is nothing there!”… but are such warnings sufficient?

Virtual reality devices may also lead to claims against hardware makers. First, unsatisfied users may try to sue 3588517180_b269037de0_zhardware makers by claiming that their product is defective and dangerous, as some users of Nintendo’s Wii controller did when the strap securing the Wii remote broke while they were mimicking sports movements in front of their television screen. A clear problem in such a scenario is whether a virtual reality device could be deemed defective where, for example, the user is unable to see her surroundings, and how hardware users may be able to avoid liability. A second problem might arise out of the hardware maker’s control over the developers actions. Virtual reality devices typically function as platforms for game developers, with the hardware maker exerting some degree of control on the distribution of the developers’ work on its platform. As a result, harware developers might also be confronted with claims based on the way they exerted this control if they were to distribute a game that could potentially induce injuries.

In sum, virtual reality platforms may lead to compound responsibilities. Since neither the hardware makers nor the application developers have complete control over the user’s experience, a feature may rapidly morph into a source of liability. In the second and third installment of “Collateral Damage”, we will explore steps that both hardware makers and application developers can take to limit the legal risks associated with virtual reality devices.

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How Does “Fair Use” Apply to Virtual Reality Content?

 1000 648 David B. Hoppe
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A primary defense against a copyright infringement lawsuit is fair use, but particularly in virtual reality cases, fair use should not be viewed as a guarantee since the outcomes in fair use cases are generally quite unpredictable, and virtual reality is such a new technology. A fair use outcome is difficult to predict because a court’s analysis will consider many aspects of the allegedly infringing work and the original work, and these aspects can weigh more or less heavily in the balancing test. Additionally, since virtual reality is so new, courts may make comparisons to many different technologies when pursuing consistency with earlier case law.

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The balancing test that courts will apply to a fair use case includes four main factors. First is the purpose and character of the allegedly infringing work’s use. Is it for profit? Is it for educational purposes? If the allegedly infringing use is a video game, it is less likely to be considered fair use than a non-profit museum simulation or simulation for schools, at least with respect to this factor. However, more important for this factor is whether the allegedly infringing work’s use is transformative. Does it convey a new expression or message? If so, the work has a stronger fair use defense.

Second is the nature of the original, copyrighted work. If it is highly creative, it will receive more protection than a more factual work. So for this factor, a video game with a fictional setting will be more protected than a medical training simulation striving for an accurate replication of a specific patient’s anatomy; an allegedly infringing work based on the medical simulation would fare better with respect to this factor because the original work is less creative and more factual. Courts will also consider whether the original work was published or unpublished, and they will be more protective of an unpublished copyrighted work and less likely to find fair use.

Third is the amount and substantiality of the portion used in the allegedly infringing work in relation to the copyrighted work. Did the second work take more than necessary from the original work? Not only considering how much of the original work was used, courts will also analyze whether the heart of the copyrighted work was appropriated. If something central to the original work was used, the court is less likely to find fair use.

The most important factor is likely the fourth factor: the effect of the allegedly infringing use on the current and potential markets for the copyrighted work and derivative works. The owner of the copyrighted work must show harm to the market or value of the work. Will people purchase or use the allegedly infringing work instead of the original work, or might the allegedly infringing work instead have a positive impact on sales of the original work? Is the second work invading a market that the original work’s owner intended to enter? If more likely to harm the original work, fair use will not be found for this prong of the balancing test.

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Could Your VR Content be an Unauthorized Derivative Work?

 1000 648 David B. Hoppe
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In addition to strength of copyright protection, discussed in a previous post, another concern for owners of copyrights in virtual reality products may be derivative works, which are creations based on preexisting works. Virtual reality environments could be derived from other works, and creations by participants in virtual reality simulations could arguably be derivative works. If a derivative work is unauthorized, it could be grounds for a copyright infringement suit.

film_stripThe right to prepare derivative works is one of the exclusive rights given to authors via copyright law. Examples of derivative works include a film created from a novel, fan-made art or merchandise for a franchise, or a TV show made from a video game. In these examples, the characters, plots, and worlds in the original works are incorporated in new works.

If a virtual reality product is derived from a preexisting work protected by copyright law, the author of the virtual reality work needs either permission from the original work’s rights holder (which usually entails securing a license), or a strong fair use defense. Otherwise, the original work’s rights holder might successfully sue for copyright infringement.

For example, a virtual reality environment could be based on photographs of a specific place. Photographs are copyrightable, but their protection is based on expressive choices such as lighting, coloring, positioning of objects or people, and so on. This means a virtual reality setting could arguably be a derivative work if it is an adaptation of photographs with expressive, copyright-protected elements. However, it could be difficult to prove that the author of the virtual reality work relied on the expressive photographs in question rather than on other non-expressive photographs of the same place.

In contrast, if a virtual reality environment is based on a fictional world captured in artworks, motion pictures, or other media, the rights holders for the original works would have stronger arguments than rights holders for photographs, which are relatively less creative. The rights holders in the original works would need to point to identifiable, expressive elements of their own works that appear in the virtual simulations. These could include unusual buildings, plants, patterns, color schemes, characters, choreography, and modes of transportation, to name a few. A combination of many unusual elements from the original works would strengthen the case for infringement.

worldskin-01Another issue involves the users of virtual reality products. Some video games allow users to author their own creations, which could arguably be copyrightable. If a user creates an expressive building or work of art within the video game, can the user claim the copyright in his or her individual creation? Would it matter more if the user were able to market and profit from the work? Is the user’s creation even in a fixed medium (a prerequisite for copyright ownership)? Did the user sign away all rights to his or her creations within the game? And since the user’s creation may incorporate many elements of the virtual reality game, is that creation an unauthorized derivative work? These questions depend on the technologies and policies of the individual games, and game creators should certainly consider them if copyright protection is a priority.

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How Strong is that Copyright in Your Virtual Reality Content?

 1000 648 David B. Hoppe
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While patent law usually comes to mind first when considering how best to protect virtual reality technology, copyright law may provide protection to virtual content. However, the strength of the copyright will depend on the degree of creativity incorporated. This is a particular concern in the case of virtual reality content, which may endeavor to replicate real-world environments. While a copyright may be registered, if the underlying claim is weak, it will be more difficult to find that a similar work is infringing.

svetlana_podobedova_2012cIn general, virtual reality products create simulated environments that are based on reality or on imagined worlds. Depending on how much creativity is required to create the simulated environment, the work may have more or fewer protectable elements
. When an author’s creation portrays reality accurately, there may be very few ways to create the simulation. The fewer possible ways to create it, the less copyright protection a work will likely receive. If there is only one way to create something, it would be anti-competitive to allow only one author to create and protect it. Conversely, if there are many diverse ways to create the simulation, then the author must have made specific choices in order to achieve the final result. The contribution of the author’s expressive decisions would give the work stronger protection.

It is helpful to apply these principles to specific uses of virtual reality technology. One use is video games. Suppose two video games are set in present-day Los Angeles, and the game creators are striving to portray the city as realistically as possible. The more closely the two simulations succeed in reflecting reality, the more similar they would look to present-day L.A. and to each other. These simulated environments would receive weaker protection than they would if the setting were a fictional environment, or an imagined L.A. from a different time period.

Virtual reality is beginning to be used in training for pilots, commercial drivers and heavy-equipment operators, and will increasingly be used for more occupations as the cost of the technology decreases. Training simulations generally involve many different scenarios and terrains, all of which involve creative choices on the part of the authors, so copyright protection in these situations should be strong.image-20151020-32235-12gt607

However, medical training simulations can present a contrast. Virtual reality allows doctors to conduct surgery on  virtual patients, and in the case of patient-specific anatomy, the simulated anatomy is made to be an accurate replica of the anatomy of an actual patient. Because there is not much expression or originality in the realistic representation of the anatomy, copyright law may not afford much protection to the simulated anatomy.

Another use is in museums, which may feature simulated environments that allow people to feel they are in a particular geographic place at a certain time in history. These simulations will often be historical, requiring authors to make more creative choices, which would give the works stronger copyright protection.

If copyright protection of simulated environments is a priority for creators and rights holders, how much expression and value the author contributes should be considered. The more creative choice involved, the stronger the copyright protection will be.

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Oculus Rift Revisted

 1000 648 David B. Hoppe
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We’ve written before about the hot new virtual reality, Oculus Rift. A few months ago, Facebook announced that it was going to purchase Oculus Rift for a whopping $2 Billion. While the ink hasn’t yet dried on the acquisition, Oculus is making headlines again. This time, it appears that they, and Facebook, are being threatened with a lawsuit by Zenimax Media, parent company of Id Software, for the unauthorized use of its technology in the Oculus Rift.

Specifically, Zenimax is alleging that Oculus is “illegally misappropriating ZeniMax trade secrets relating to virtual reality technology, and infringing ZeniMax copyrights and trademarks[.]” Oculus returned fire in a statement saying: “The lawsuit filed by ZeniMax has no merit whatsoever. As we have previously said, ZeniMax did not contribute to any Oculus technology. Oculus will defend these claims vigorously.”

585px-john_carmack_gdc_2010The controversy centers around well known Doom developer, John Carmack, current Chief Technology Officer at Oculus, and former co-founder of Id Software. Carmack apparently started working for Oculus in August of last year, but left his post at Id Software a few months later in November. The more significant allegations are that Carmack began working on the virtual reality technology while still employed by Id Software, and that that technology has been used in the development of the Oculus Rift.

It seems clear that Carmack began tinkering with virtual reality headsets while he was still with Id Software. In fact, at E3 2012, Carmack displayed a “ski goggle” prototype at the Zenimax booth (to much industry acclaim, which then led to the blockbuster Kickstarter campaign, and ultimately propelled Oculus to its current level of success). He then mentioned his R&D development work for virtual reality headsets in connection with Rift, but said that it was his “toy project – it really wasn’t a sanctioned company endeavor [because] it’s not at all clear how [Zenimax would] monetize a head-mounted display.”

Some critics view this suit as a strategic step for Zenimax – assuming that the company waited for the technology to gain momentum, then the Facebook acquisition happened, and now there are deep pockets to pursue. In reality, according to various media outlets, it appears that prior to the Facebook acquisition, Oculus acknowledged, in writing, that Zenimax owns some portion of the technology. The two sides even engaged in settlement negotiations where a portion of a stake in Oculus was on the table. Those negotiations broke down however, and now Zenimax is looking to the courts for resolution.

In response to the allegations, last month, Carmack cryptically tweeted “No work I have ever done has been logo1blogpatented. Zenimax owns the code that I wrote, but they don’t own V[irtual] R[eality].” Although true, Carmack’s tweet sheds little light on the issue. It’s clear that while Carmack was working for Id Software, any code that he developed in connection with his work, belongs to Zenimax. The suit will likely center on whether Carmack’s contributions to Oculus, while still employed at Id Software, belong to Zenimax.

As we watch this particular case unfold in our newsfeeds, it will be interesting to see the impact on talent acquisition strategies – specifically in the context of the talent wars in Silicon Valley. In a climate where poaching employees is not only common, but is celebrated, will employers recognize the liability that may come with the new employee’s intellectual knowledge and experience?

VR lawyer

Is Virtual Reality the future of gaming (again)?

 1000 648 David B. Hoppe
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If, in the mid-1990’s, you had asked any gaming industry expert about the future of gaming, you would have received a singular unequivocal response, in unison: Virtual Reality. Thinking back almost two decades, the hype and excitement were palpable; the possibilities and expectations for the technology, and the benefits it could bring to gaming were limitless. In retrospect, with clunky headsets, poor graphics, and prohibitive equipment prices, it’s pretty clear now, that 90’s era virtual reality was doomed to fail. These days, a quick survey of gaming expos and conferences in 2012, reveals that virtual reality is back and cooler than ever.  Is the gaming world ready for it – this time?

Before getting much deeper into the VR question, let’s first take a look at the console technology bringing VR, in whatever new form it comes, back to the forefront of gaming tech.

First, came Nintendo’s Wii in 2006, which revolutionized the user experience. Not only was the original bulky controller redesigned into a sleek and ergonomic wand, but it was wireless – with an innovative motion sensor that was capable of detecting movement and rotation in all three dimensions. For the first time, players could physically interact with the virtual world – a seachange in the gaming experience.[1]

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