United States: The Legal Challenges Of Augmented Reality – Part 1: The Basics

The sudden rise of Pokémon Go was one of the biggest news stories of 2016. While the introduction of reality-altering applications has been underway for some time, the unprecedented popularity of the game and the resulting controversies (discussed in further detail below) generated new buzz in the legal community as it scrambled to reconcile the law with the changing technological landscape.

For those who may not be aware, virtual reality (VR) is an artificial simulation of real life environments, whereas augmented reality (AR) blends VR elements with the real world to create an enhanced or 'augmented' version of reality. Pokémon Go, for instance, is a free-to-play (with the option to buy in-game currency) mobile app that requires players to walk around to catch superimposed Pokémon. The app uses the GPS on a player's phone to monitor the player's actual whereabouts and introduces virtual components of the game (such as Pokéstops or gyms for training Pokémon) on the screen based on the player's geolocation.

It quickly became apparent that the legal parameters that govern in physical reality don't always readily translate to augmented reality. Local police departments started receiving complaints from alarmed residents of players trespassing onto private property or otherwise congregating in restricted spaces in their zest to catch elusive Pokémon (see, for example,  http://www.yorkdispatch.com/story/news/2016/07/13/police-pokemon-go-players-trespassing/87035696/). There were also reports of players becoming so engrossed in the virtual aspects of the game that they inadvertently physically hurt themselves or others by failing to pay attention to their real world surroundings (http://www.cnn.com/2016/07/15/health/pokemon-go-players-fall-down-cliff/). The sheer number of users, estimated to be in the millions, substantially increased the chances and scope of potential harm.

Unsurprisingly, some of these scenarios eventually resulted in lawsuits. A homeowner in California sued Nintendo and Niantic, the makers of the game, for trespass, alleging that the "Defendants have shown a flagrant disregard for the foreseeable consequences of populating the real world with virtual Pokémon without seeking the permission of property owners." (Marder v. Niantic Inc., 16-cv-04300, N.D. Cal. July 29, 2016) A Florida plaintiff filed suit under state unfair trade practices law alleging an illusory contract, claiming Niantic collected significant personal data, but contractually eliminated its liability so that it was effectively not bound by the Pokémon Go terms of service and privacy policy limitations on data use and retention. (Beckman v. Niantic Inc., No. 2016-CA-008330, Fla. Cir., 15th Jud. Cir. July 26, 2016)

Commentators have cited a number of other possible legal concerns raised by augmented reality games, including:

  • Privacy (collection of large amounts of user information for an infinite variety of potential uses)
  • Nuisance (e.g. due to large groups of players gathered in a public location)
  • Negligence and contributory negligence (by distracted players)
  • Violations of COPPA and other advertising regulations protecting children
  • Intellectual property infringement (resulting from photos, names, landmarks and other protected items that may appear in the game)
  • Misappropriation of rights of publicity or name/likeness (e.g. individuals that are captured on film)
  • Range of legal issues connected with virtual currencies, from consumer fraud to money laundering

On the flip side, games like Pokémon Go offer potentially robust advertising platforms for brands, particularly with respect to location-based ads. A number of large brands have partnered with Pokémon Go and the list of co-sponsors is growing as the game's popularity expands globally. As the technology advances, new forms of marketing may become available, and the companies who are ahead of this trend stand to benefit greatly. Nevertheless, advertisers should be aware of the potential issues these applications face and continue to keep an eye on important legal developments.  You can check back here for the most recent updates.

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This post first appeared in Frankfurt Kurnit's Focus on the Data blog (www.focusonthedata.com). It provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

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