UK: My House: What Rules? IP Implications Of Augmented Reality Advertising

Augmented reality technology (AR), in which computer-generated images appear superimposed upon a real-world environment, is quickly advancing to a point of general commercial application. While predictions about AR market size vary, most analysts expect the market to exceed $50 billion in the next three to four years.

How consumers experience AR will likely vary, with some applications available through phones (Pokémon Go being the most famous example to date) and others through special AR glasses. An example of the latter case might be an immersive walking tour of New York in which users download an app and don glasses to experience the tour

One potential revenue stream for this market is the sale of advertising superimposed in a real-world environment, combining the techniques of location-based AR and superimposition AR. In the walking tour described above, or a navigation tool on a phone, as the user traverses the city, they might see not only AR-generated information and directional signals, but also advertising superimposed on buildings or street furniture (bus shelters, kiosks, etc.). Such uses raise a number of intellectual property questions. For example, does the AR developer need permission from a building owner or a street furniture franchisee to superimpose branding or advertising on their property? Does a building owner have any intellectual property rights it can exclusively license to certain AR providers, thus prohibiting non-licensees from superimposing logos or advertising on their property? Would advertisers have a claim if AR advertising, perhaps of a competitor, was superimposed on and "replaced" their own real-world advertising or store signage? We consider these and other issues below

AR Advertising On Unused Spaces

Assume in the first instance that the AR advertisement will be displayed on an otherwise unused space on a building's facade. In a few cases, such as the Empire State Building or the Chrysler Building, the building itself may enjoy trademark protection. For example, in White Tower System v. White Castle System of Eating Houses, 90 F.2d 67 (6th Cir. 1937), the U.S. Court of Appeals for the Sixth Circuit enjoined a competitor of the White Castle fastfood chain from using a similar white miniature castle store because the public associated this structure with the White Castle brand. However, AR developers are not replicating a structure, but rather creating the illusion that an image is superimposed on a building

A more instructive case is Rock & Roll Hall of Fame & Museum v. Gentile Productions, 134 F.3d 749 (6th Cir. 1998), in which the museum brought a trademark infringement and dilution case against a photographer selling a poster that depicted the museum. At the time, the museum held a state trademark for the building's design. The Sixth Circuit noted that "to be protected as a valid trademark, a designation must create 'a separate and distinct commercial impression, ... which identif[ies] the source of the merchandise to the customers.'" Here, the court found no support "for the factual finding that the public recognizes the museum's building design, in any form, let alone in all forms, as a trademark," and concluded that the poster was not "an indicator of source or sponsorship," but instead simply "a photograph of an accessible, well-known, public landmark." Owners of buildings claiming that unauthorized AR projections infringe their rights may face similar challenges.

Of course, most property owners will not have any basis to claim trademark protection in their building design. For such owners, their intellectual property arguments may be limited. While the building owner may want to claim that the AR advertising falsely implies that the building endorses the product or service, the "false endorsement" doctrine generally arises in cases of false or implied endorsements by an individual. Moreover, a building owner may have a hard time establishing any consumer confusion as to sponsorship. Consumers may well see an AR advertisement no differently from a billboard that happens to hang outside a building. The more interesting cases may be those in which an AR developer "wraps" an entire building in a virtual advertisement without consent or superimposes advertising on a stadium where the public is more aware of the linkage between the stadium and sponsorships. Developers may be able to mitigate this risk with a disclaimer that the advertising the user sees has no affiliation to the structure on which it might appear

AR Advertising That Replaces Existing Signage

Would a building owner or advertiser have a stronger claim if AR software "replaced" a real-world advertisement with a digital impression? There is some guidance offered by a Second Circuit case, Sherwood 48 Associates v. Sony Corp. of America, 76 F. App'x 389 (2d Cir. 2003). In that case, Sony digitally replaced billboard signage in a Spiderman movie scene with advertising from paying promoters. Property owners and licensees of the original signage asserted that Sony infringed their trade dress rights in the "'unique configuration and ornamentation'" of each building and its advertising. The Second Circuit disagreed, holding that the plaintiffs failed to articulate specific elements that would justify protectable trade dress and that the "'overall look'" of a building was insufficient. Most building owners would face similar challenges, putting aside that in many cases it would not be clear what product or service the building's trade dress is meant to identify. Building owners may also have difficulty proving consumer confusion since, as the district court noted, buildings constantly "change their advertisement dress." Sherwood 48 Assocs. v. Sony Corp. of Am., 213 F. Supp. 2d 376 (S.D.N.Y. 2002), aff'd in part, vacated in part, 76 F. App'x (2d Cir. 2003).

While a number of courts have addressed whether computer trespass claims exist where there was only digital access and intangible harm to the underlying system (see, e.g., Register. com v. Verio, 356 F.3d 393 (2d Cir. 2004)), AR presents a unique combination of trespass issues; namely, a digital "use" of a physical space that does not harm or diminish the space's functioning in the traditional sense. New York law provides that trespass to chattel occurs if the personal property is diminished as to its condition, quality or value. (Id.; see also Restatement (Second) of Torts §218(b) (Am. Law Inst. 1965).) A property owner may argue that AR's use of its property diminishes its value with respect to advertising opportunities, even though no physical damage occurs. Any such case would likely be one of first impression.

Other state law claims may present similar challenges. In New York, a claim for deceptive trade practices must allege that the act or practice at issue was consumer-oriented and misleading in a material respect, and that the plaintiff was injured as a result of the deceptive act or practice. Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20 (1995). While competitors can bring suit, "'the gravamen of the complaint must be consumer injury or harm to the public interest,' not mere competitive disadvantage." Mobileye v. Picitup, 928 F. Supp. 2d 759 (S.D.N.Y. 2013). In the case of AR, such injury or harm to the public interest may be difficult to establish

In order to prevail on an unfair competition claim under New York law, a plaintiff needs to show that the defendant has misappropriated its labor and expenditure in bad faith (i.e., exploited a commercial advantage belonging exclusively to the plaintiff) and caused either actual confusion or a likelihood of confusion among consumers. Carson Optical v. Prym Consumer USA, 11 F. Supp. 3d 317 (E.D.N.Y. 2014). As noted, actual or likely confusion may be difficult to establish with respect to an AR experience, especially if the developer includes a disclaimer regarding the AR advertising a user might see. A stronger confusion argument might exist if the AR program replaces a store's identifying signage, but it is not apparent that there would be a meaningful market for such AR images.

Finally, to sustain an unjust enrichment claim, a plaintiff would need to show that it had a relationship with the defendant, that the defendant benefited at the plaintiff's expense, and that equity and good conscience require restitution. Georgia Malone & Co. v. Rieder, 19 N.Y.3d 511 (2012). Unjust enrichment is thus a quasi-contract theory to prevent injustice in the absence of a contract between two parties. Such a relationship is unlikely to exist in the AR scenarios described in this article.

AR Advertising in Proximity To Real-World Advertising

In some cases, an advertiser may pay an AR developer to have its advertisement superimposed next to instances of a competitor's real-world advertising. Here, the body of keyword advertising cases may have precedential value. In these cases, a company purchased a competitor's name as a search engine keyword so that when someone searched for the competitor, the purchasing company's advertisements appeared in the search results. While courts were generally split on whether purchasing a keyword was a "use in commerce," the vast majority did not find any consumer confusion. See, e.g., Alzheimer's Disease & Related Disorders Ass'n v. Alzheimer's Found. of Am., 307 F. Supp. 3d 260 (S.D.N.Y. 2018). In the AR context, it is similarly likely that users would not be confused by seeing an AR advertisement juxtaposed to a competitor's real-world advertisement.

Copyright Considerations

A building owner seeking to enjoin an AR developer may not find much support in copyright law. While architectural works created on or after Dec. 1, 1990 are explicitly protected by copyright, 17 U.S.C. §102(a)(8), the Copyright Act explicitly states that this protection does not prevent others from creating pictorial representations, such as photographs, of the building if made from a public place. 17 U.S.C. §120(a). A court would likely consider a digital image of a building with a superimposed AR image to be covered by this exclusion.

An AR developer should, however, give consideration to superimposing images on separable copyrightable elements, such as a sculpture or mural, located on or next to a building. Here, the question is whether an AR image layered on a real-world copyrighted work creates an unauthorized derivative work. In general, derivative works include any form in which a work may be "recast, transformed or adapted." 17 U.S.C. §101. While an AR work may not be "fixed" for copyright protection purposes, a derivative work does not need to be fixed to infringe. Lewis Galoob Toys v. Nintendo of America, 964 F.2d 965 (9th Cir. 1992).) However, a derivative work does need to incorporate the copyrighted work in a "'concrete or permanent form.'" Perfect 10 v. Amazon.com, 508 F.3d 1146 (9th Cir. 2007) (quoting Lewis Galoob, 964 F.2d 965). In the case of AR, a copyright owner may have a difficult time establishing that the AR program uses its protected work in that manner. Indeed, in distinguishing another Ninth Circuit case in which the defendant was found to have created a derivative work by gluing photographs to tiles, Mirage Editions v. Albuquerque A.R.T. Co., 856 F.2d 1341 (9th Cir. 1988), the court noted that the holding would have been different had the defendant "distributed lenses that merely enabled users to view several artworks simultaneously," as such use would not have been in a concrete or permanent form. Lewis Galoob, 964 F.2d 965.

Even if a court finds that superimposing an AR image does infringe any of the rights discussed above, the use of copyrightable content in AR may constitute fair use. A fair use analysis focuses on several factors, but in recent years, courts have emphasized whether the allegedly infringing work is transformative, meaning that it alters the copyrighted work by adding a new message or expression. See, e.g., Blanch v. Koons, 467 F.3d 244 (2d Cir. 2006). Particularly, courts have found fair use where the defendant's work provides a social benefit or serves a different purpose than the original copyrighted work. In Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013), a photographer sued the appropriation artist Richard Prince for using his photographs in Prince's paintings. In finding fair use, the Second Circuit emphasized that Prince's works contained distorted forms and sizes of the photographs, saying that "Prince's composition, presentation, scale, color palette, and media are fundamentally different and new compared to the photographs ... ." The reasoning from the Cariou case is applicable to AR, which will display copyrighted content on a different medium and possibly in different colors or distorted forms. Because AR transforms content into a new mode of expression, even if AR reproduces the entirety of a copyrightable work without alteration, courts might find such reproduction to be fair use.

Implications of the Visual Artists Rights Act

In some cases, an AR developer may want to superimpose advertising on a statue. Consider for example, that on the New York walking tour described above, an advertisement for a financial institution appears across Di Modica's "Charging Bull" sculpture near Wall Street. Under the Visual Artists Rights Act (VARA), the creator of a VARA-protected work, which includes sculptures, can "prevent any intentional distortion, mutilation or other modification of that work which would be prejudicial to his or her honor or reputation." However, VARA contemplates physical modifications to a work. A digital image that simply appears to be on a work would not trigger the artist's VARA rights. Indeed, VARA expressly provides that any use of a protected work in connection with any audiovisual work or electronic publication is not a prohibited modification.

Conclusion

There is no doubt that AR applications will raise many issues of first impression for the legal system. U.S. courts have continually adapted intellectual property law to a digital environment, often protecting new technologies, particularly where the new, potentially infringing content does not supplant the demand for the original content. However, the intersection of real-world objects with digital images will test a number of legal doctrines. Property owners, advertisers, and copyright holders may feel frustrated by how AR is transforming their tangible and intangible rights, but may have a difficult time prohibiting such use under current law

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions