United States: Augmenting Reality: A Pokémon Go Business And Legal Primer

We have become inured to the sight of people staring at their phones rather than engaging with one another or enjoying their real-life surroundings. But, over the past two weeks, enslavement to mobile devices rose to new levels, with smartphones and tablets actually propelling users' movements in the real world as opposed to merely distracting them from it.

Unless you've been off the grid this month, you know that the force mobilizing these seemingly possessed pedestrians (and drivers!) has been Pokémon Go, an app that has been downloaded more than 15 million times. Pokémon Go is currently boasting more daily users than Twitter despite having been launched on July 6, 2016, making it the most popular mobile game of all time.

Despite all this, if you happen to be, umm, over a certain age (i.e., you're not a Millennial or younger), you may be a bit mystified as to what this Pokémon Go thing is all about. Accordingly, we put together this primer on Pokémon Go, including some observations regarding potential legal issues raised by the app.

How the Game Works

Pokémon Go is an augmented reality game that uses the device's ability to track time and location and shows the user a map of his or her real-life surroundings. As the player moves around, the game superimposes animated Pokémon characters onto the screen over a view of the player's real-life surroundings as seen through his or her mobile device's camera. The more characters the player catches, the higher his or her ranking rises.

The game is free to download from online app stores, but, as players progress, they need Pokémon coins to enable certain functions. While the game allows players to earn coins over time, the fastest way to acquire them is by purchasing them. Such in-app purchases are real money makers, expected to account for more than $50 billion in industry-wide revenue this year.

Who's Behind It

The funds that players are plunking into Pokémon Go are likely to add up to real money for the companies behind the app, a joint project of The Pokémon Company, which is 32%-owned by Nintendo, and Niantic Inc., a spinout from Alphabet Inc.

Since the app's recent release, shares in Nintendo—a company that has struggled in recent years as a result of its reluctance to embrace mobile games—have risen 56%. The game has also significantly strengthened the financial position of Unity Technologies, the company that owns the game engine software that provides basic functionality for Pokémon Go (and for approximately 31% of the 1,000 top-grossing mobile games).

Perks and Pitfalls (some, unfortunately, literal)

Pokémon Go is being hailed as boon for small businesses; to drive foot traffic, merchants are paying the app a $10 daily fee for items called lures, which attract users. It's also being lauded for incentivizing some players to exercise and for relieving users' depression and social anxiety. Of course, the app is also creating problems and drawing its share of controversy.

Safety concerns have arisen as players who won't look away from their mobile devices have run-ins with their real-life physical surroundings, cutting and bruising themselves, getting into driving accidents, and even falling off cliffs. These incidents have prompted a police department in Texas to post to social media a list of safety reminders for Pokémon Go users.

The list advises players to "tell people where you're going if it is somewhere you've never been"—wise advice in light of police reports describing Missouri armed robbers' use of the game's geolocation feature "to anticipate the location and level of seclusion of unwitting victims."

And, while some columnists have deemed the game educational because many of its so-called PokéStops (places where players can get free in-game items) are famous landmarks and historical markers that allow "players to learn about their community and its history," some of those PokéStops, such as the Holocaust Museum, have objected, maintaining that playing the game on their property is inappropriate. They are frustrated by the fact that they have no control over their PokéStop designation.

Legal Issues

Despite the app being so new, it is already raising legal concerns. Some of the key concerns include the following:

Privacy

The Pokémon Go app has been dogged by privacy concerns. When it was first launched, the Pokémon Go app requested permission to access all of the data associated with the player's Google accounts (including emails, calendar entries, photos and stored documents). The app's first update, available since at least July 12, 2016, remedied that problem and now asks people downloading it for permission to access only their Google IDs and email addresses.

The more limited-information-access permission terms—which downloaders of the original version of Pokémon Go can only adopt by downloading the update, signing out and signing back in—haven't stopped U.S. Senator Al Franken from penning a letter to Niantic's CEO John Hanke requesting Niantic to answer a series of questions to "ensure that Americans'—especially children's—very sensitive information is protected."

Product Liability

And what about the aforementioned injuries that people have sustained while playing Pokémon Go? Can Pokémon Go's developers be held liable for such injuries? At least one car accident victim is suing another popular social media app, Snapchat, for the traumatic brain injuries he suffered when he was struck by a car driven by a Georgia woman allegedly trying to use the Snapchat speed filter—a feature that tracks how fast the app's user is moving and rewards points to users who submit photos of their speed.

Trespass

There's also the question of property rights. In some cases, owners of the physical real estate sites that have been designated as PokéStops have complained about the traffic and other nuisances caused by the players. As a result, Niantic is accepting requests for removal of PokéStops from property owners, but removal isn't guaranteed.

Of course, app users who enter upon another's land without permission may be subject to trespassing claims. But could the companies behind the game also be liable for trespass? As The Guardian points out, "A Pokéstop cannot be 'on private property.' A PokéStop does not exist: it is a latitude and longitude stored on Niantic's servers, interpreted by the Pokémon Go client which then represents it as a circle hovering over a stylized Google Map of the area surrounding the player."

It is possible to recover in trespass for an intangible invasion of property, but whether a real estate owner's exclusive rights to his or her property extends to cyberspace remains to be seen.

Steps Taken to Mitigate Legal Risks

Pokémon Go's owners have taken steps to limit their potential legal liability. For example, a warning screen on the app advises users to pay attention to their real-world surroundings. And Pokémon Go's detailed, robust Terms of Service attempt to limit the potential liability of the companies behind the app. In addition to a $1,000 liability cap and a mandatory arbitration provision, the Terms of Service contain an entire "Safe Play" section, which states in part that, as a player, you "agree that your use of the App and play of the game is at your own risk, and it is your responsibility to maintain such health, liability, hazard, personal injury, medical, life, and other insurance policies as you deem reasonably necessary for any injuries that you may incur while using the Services. You also agree not to use the App to violate any applicable law, rule, or regulation (including but not limited to the laws of trespass)."

Pokémon Go's Terms of Service, however, don't do anything to limit the liability of the game's players. As noted above, users could be liable for trespass and for any harm that others suffer as a result of players' use of the app (especially careless use, such as playing while behind the wheel of a car).

The Upshot

Any innovative technology that becomes a worldwide phenomenon overnight is bound to raise legal concerns. But, as we've noted here at Socially Aware, such concerns often turn out to be overblown. The real significance of Pokémon Go is ultimately a business, rather than a legal, story: thanks to the app, millions of consumers around the world have now embraced augmented reality technology. Lawsuits will inevitably follow in the wake of Pokémon Go's success but, more importantly, so will millions of dollars of investment in new augmented reality applications. As a result, in what could be a very short amount of time, the integration of augmented reality into nearly every facet of our everyday life will become, well, a reality.

[Authors' Note: We would like to thank Luke D. (age 13), Ben R. (age 12), Alfredo M. (age 10) and Dylan J. (age 9) for the invaluable research that they contributed to this blog post.]

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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Aaron P. Rubin
 
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