In case you have been living under a rock, virtual reality (VR) and its first cousin, augmented reality (AR), have arrived. The highly publicized and long-awaited head-mounted displays (HMDs), the headsets through which the world of virtual reality can be accessed, have been or will be made available for sale to the public this year, such as Facebook-owned Oculus VR’s Oculus Rift, Samsung’s Gear VR, Sony’s PlayStation VR, HTC’s Vive, etc. In other words, VR/AR is going mainstream.

Nearly all of the top 10 tech companies, including Apple, Google, Samsung, and Microsoft, have jumped on the VR bandwagon, investing significantly in the space. Countless players across many different industries, including Marriott, Netflix, Hulu, Birchbox, and Ford have developed VR “experiences,” seeking to capitalize on the hype. Indeed, 75% of the 100 companies on Forbes’ World’s Most Valuable Brands list have either developed VR or augmented reality (AR) experiences for their customers or employees, or have invested in developing the technology.[i] Television networks have broadcast sporting events such as the Kentucky Derby, NASCAR, and the NBA live in VR. The 2016 Sundance and Cannes Film Festivals featured VR short films. The Coachella music festival provided each 2016 attendee with a custom cardboard VR headset, allowing them to explore the festival grounds and preview performances through the Coachella VR app. Six Flags debuted the New Revolution, a roller coaster experience during which riders wear a VR headset while riding a roller coaster. As the foregoing examples demonstrate, VR is the new “it” technology, and “it” is everywhere.

Even in its nascent state, VR is proving to have a multitude of beneficial uses stemming far beyond the gaming industry with which it is most readily associated. The healthcare industry is using VR to treat human cognitive and behavioral conditions and provide training to medical students. The real estate and automotive industries are using VR to show properties and cars to potential buyers. The sports industry uses VR to provide zero-impact training to athletes. Educators are incorporating the technology into learning tools designed to engage children. VR is also being utilized for advertising, space exploration, tourism, military and law enforcement purposes, and, naturally, entertainment.

In contrast to the virtual world they exploit, however, the new HMDs, as well as VR/AR in general, raise very real legal issues, especially in the areas of consumer safety, privacy, intellectual property, and First Amendment law. Most recently, Pokémon Go, which was released to the public on July 6, 2016, has captured so much attention that it borders on mania.[ii] For the uninformed, Pokémon Go is a game that uses the player’s smartphone camera and augmented reality to insert virtual Pokémon (fictitious creatures) into the user’s real world. The game designates real-world locations, such as buildings and landmarks, as in-game destinations; players are encouraged to walk around their community in order to locate and capture these Pokémon. Pokémon Go is producing some beneficial effects, such as promoting physical exercise, generating revenue for businesses, and assisting law enforcement in apprehending suspects. It is also foreshadowing the problems that future VR/AR games and devices may create.

For example, cell-phone-fixated players are walking into the street without looking. Some are driving while playing the game – indeed, one player crashed into a tree due playing Pokémon Go while driving.[iii] Players are also attempting to capture Pokémon located in inappropriate places such as the Holocaust Museum and the 9/11 Memorial. At least one man’s private residence has been marked by the app as an in-game destination, causing players to congregate outside of his home at all times of the day.[iv] Armed robbers are using the game to bait unsuspecting players into unpopulated areas. A teenage girl in Wyoming even discovered a dead body while trying to catch a water Pokémon.[v] For at least a few days, the app contained a coding “error” that gave the game’s developer “full access” to users’ Google accounts, including Gmail.[vi] Remarkably, all of the foregoing events happened over the course of the first week Pokémon Go was available to the public. The fact that Pokémon Go became ubiquitous in such a short period of time is a testament to public appetite for VR/AR.

Below, we highlight some prospective issues raised by VR/AR, while recognizing that this discussion is pure conjecture at this point. The world of VR is still in its infancy, and, as such, these legal issues have not yet been explored in connection with VR. While we can (and do, below) compare VR to other forms of media and technology preceding it, because VR is unlike anything before it in terms of the immersive and interactive experience it provides, it is difficult to predict all of the legal implications of this new technology. As HMDs and other VR devices become ubiquitous, these and other issues will come to the forefront and legislation and case law will likely provide answers to many outstanding questions. Only time will tell us which issues are non-issues and which issues require further regulation, innovation, and attention.

While The “Reality” May Be Simulated, The Potential Legal Issues Are Not

Consumer Safety

While the fully immersive experience of VR is what makes it unique and appealing, it has also spawned perhaps the top (and most obvious) concern regarding VR – the physical risks involved. It is not difficult to imagine the kind of harm that can ensue when an HMD-user proceeds to move around a room filled with furniture, pets, cords, walls, and other objects while her view of the real world is obstructed. Injury to both the user and others in the vicinity is foreseeable. The Internet is filled with reports and videos of HMD users running into walls, furniture, the ceiling, and other people. The risk of harm is especially high when the user is engaged in a VR experience that encourages moving around (e.g., when the goal is above the user). It is not only real world objects that can cause the VR user harm, but objects within the virtual space, as well; forgetting that these objects are not real, VR users have attempted to sit or lean on non-existent furniture and are quickly jolted back to reality when they fall onto the very real floor. If these physical risks actualize and HMDs begin causing serious consumer injuries, a slew of product liability lawsuits will likely emerge claiming that these products suffer from a design defect and/or fail to sufficiently warn of its risks.

It is foreseeable that future plaintiffs will claim that HMDs are defective in design under both strict liability and negligence theories. But a product does not suffer from a design defect solely because it is dangerous (e.g., a knife). Like a knife, while the HMD’s design, essentially a high-tech blindfold, certainly presents a risk of danger, it is also serves VR’s primary purpose – to fully immerse the user in a virtual experience. On the other hand, some HMD creators have shown that these products can be made safer with minimal interruption to the immersive VR experience. Indeed, Valve created a safety mechanism for its HTC Vive called the Chaperone System, which utilizes the Vive’s front-facing camera to detect physical objects in the user’s path.[vii] It also enables users to define the area of the room that they will use and notifies them when they get close to the boundary.[viii]

Unlike the Vive, the first consumer version of the Oculus’ Rift does not come with a Chaperone type system or a front-facing camera. The Rift, therefore, cannot detect or prevent a user from colliding with physical objects in their path, such as walls, tables, and chairs.[ix] This raises the question: is an HMD’s lack of a front-facing camera or chaperone system a design defect? In other words, could Oculus be held liable if a Rift user suffers a physical injury that could have been prevented by the inclusion of a front-facing camera and/or a Chaperone system? When asked if the Rift can set boundaries to ensure that users do not walk into walls, Oculus’ founder indicated that he believed that to be a software issue rather than a hardware issue.[x] Interestingly, however, at least one earlier model of the Rift had a front-facing camera.[xi] Further, user reports and videos clearly indicate that Rift users are getting up and walking around, and several users are claiming that the Rift is dangerous and needs a Chaperone system like the Vive.

Oculus could take the position that that the doctrine of assumption of risk bars liability for any injury that results from consumers walking around while wearing the Rift. Oculus could argue that not only is the risk of injury foreseeable, but it specifically warns users of such risks in its health and safety warnings. Thus, so the argument would go, the consumer assumed the risk of injury because they were aware of it and still used the HMD. The success of this argument would likely depend on several factors, including the adequacy of Oculus’ health and safety warnings and whether the inclusion of a front-facing camera is economical.

Manufacturers of HMDs may be able to avoid liability for injuries and side effects resulting from HMD usage by providing specific and thorough health and safety warnings. The health and safety warnings that accompany HMDs already on the market, such as the Rift and Vive, alert consumers to the immersive nature of VR and the risk of serious injury if the product is used in an unsafe area (or if one relies upon imaginary furniture to bear their weight). These warnings also notify consumers that VR interaction may produce a multitude of negative side effects, ranging from nausea and headaches to seizures and post-traumatic stress disorder. These types of consumer safety warnings insulated Nintendo from liability in connection with its Wii remotes, and it stands to reason that they will similarly prevent the imposition of liability in connection with VR HMDs.[xii] Future claims will either confirm the adequacy of such warnings or will test their limits.

Furthermore, since VR only recently made its public introduction, it may involve risks that are not yet known, including the long-term effects of VR usage. While more research is needed, many believe that long-term VR engagement may have an impact on eyesight, cognition, and behavioral function, especially in children. Further, there are concerns that the wholly-immersive nature of VR will cause users to develop serious addictions that could lead to death from exhaustion, dehydration or starvation.[xiii] The threat of addiction to VR does not seem so far-fetched when one considers the severe addictions that users have developed to the significantly less immersive massively multiplayer online games (MMOGs).[xiv] Oculus warns users to “take at least a 10 to 15 minute break every 30 minutes, even if you don’t think you need it,” but does not specifically mention anything about the threat of addiction.[xv] Warnings may be modified or enhanced to address these and other concerns as they arise, or may be tested in future litigation. As with all new technology, refinements in both the technology and the business and legal practices surrounding it will continue for as long as the technology is interesting to developers and consumers.

Privacy

Like many mainstream products on the market today, HMDs such as Oculus’ Rift can – and do – collect data about their users. Unlike other forms of technology, however, the new VR HMDs have an unprecedented ability to collect unique personal information that consumers are not accustomed to providing, namely, physical movement. Oculus’ privacy policy reveals that the company not only collects information provided by its users, but also automatically collects certain information when a consumer uses Oculus’ services, including “information about your physical movements and dimensions when you use a virtual reality headset.”[xvi] In addition to user location, Oculus tracks users’ head, hand, and eye movements, and can determine if a user is sitting or standing. Moreover, the software required to run the Rift includes an internet-connected process that is continuously running and routinely sending information to Facebook’s servers, even when the user is not using the device.[xvii] In other words, Facebook, through Oculus, knows what content users are viewing on Rift, where they are viewing it, and the positional tracking of the HMD.[xviii] Concerns over user privacy and security have already been articulated.

Growing concerns over Oculus’ privacy policy caused Senator Al Franken to ask Oculus’ CEO, Brendan Iribe, some hard questions regarding “the company’s collection, storage, and sharing of users’ personal data” to enable consumers to “make informed decisions about whether and with whom they share such sensitive information.”[xix] Oculus responded that it “collects information about physical dimensions to help improve its services” and admitted that it shares such information with its developers, including Facebook, “as necessary to provide our services and enhance the ability of relevant VR products for people.”[xx] Notably, however, Oculus did not address whether it sells such information to third parties, despite being specifically questioned on the subject.

The unique (and arguably sensitive) information collected through VR products will likely be coveted by advertisers, hackers, and potentially government agencies. VR companies that collect this data must be careful not to mislead consumers by failing to implement or maintain “reasonable” and “appropriate” controls to secure such information, or by making materially misleading statements or deceptive omissions of material facts to consumers concerning the use, disclosure, or safeguarding of such information (e.g., in a privacy policy or other public-facing materials). Otherwise, they could be subject to enforcement actions by the Federal Trade Commission, as well as litigation brought by consumers for invasion of privacy..

Like other uses of private information, those selling VR products and experiences will be well served by providing clear policies and choices with respect to the information collected. Responsible safeguarding of private information collected from users will also protect consumers and insulate developers from liability. No matter what policies and practices are adopted, the trove of information collected from the marketplace of VR users will make a tempting target for hackers and thieves. In this respect, the emerging VR community will not be breaking new ground; it will merely be joining the ranks of countless other interactive businesses who are entrusted with protecting customer information. A wide range of businesses, ranging from banking and credit card companies to entertainment and dating services already struggle to balance the quality of the services and products they provide against the need to protect user privacy.

Intellectual Property

VR may also implicate intellectual property issues where the virtual environment contains real world corporate logos, copyrighted works, or a person’s name or likeness. As with video games, the laws of copyright, trademark, and right of publicity govern the use of such content in VR.

A copyright owner has the exclusive right to reproduce, distribute, perform, or display the copyrighted work, or to prepare derivative works based on that work.[xxi] Thus, VR content creators must secure a license from the applicable rights owner before displaying or performing material subject to copyright protection within a VR experience.[xxii] Likewise, software developers must be cautious when it comes to enabling VR users to generate content (such as avatars). If users are provided with the means to incorporate protected material into the content they create, software developers may be held secondarily liable for the user’s infringing conduct.

With respect to the use of another’s trademark in VR, solely including another’s mark in VR is not per se trademark infringement. Rather, the mark’s owner would have to establish the mark was used “in commerce” in order to state a claim for trademark infringement. For instance, if a VR user sells virtual cars bearing the BMW logo to other VR users, the use of the mark may be found to meet the “in commerce” element of trademark infringement.

Similarly, invoking the name or likeness of a celebrity in VR could amount to an unauthorized use – forming the basis for a right of publicity action – if the use was commercial in nature. Because right of publicity laws vary from state to state, content providers must take additional care to ensure that use stays within the bounds of the law in every jurisdiction in which the products are distributed. Addressing this inconsistency is a common issue in the creation of entertainment and other creative content already, and that problem will remain a concern with respect to VR products.

As far as intellectual property issues in the virtual space are concerned, it appears that existing law will apply to protect the intellectual property rights of owners in the virtual world. If VR content is deemed to be an expressive work, however, as with video games, the First Amendment may provide a defense to future intellectual property lawsuits arising out of the use of a trademark, copyrighted work, or a person’s name or likeness within VR.

First Amendment Issues

Like movies, television, books, and other expressive works before it, VR communicates ideas. Given that the Supreme Court has held that even violent video games qualify for First Amendment protection,[xxiii] it would seem that, by extension, most VR content should receive First Amendment protection as well. The highly immersive and interactive nature of VR, however, is encouraging the creation of some content that is less clearly within the protection of the First Amendment.

For instance, the adult film industry is developing X-rated VR experiences that seek to turn pornography into an active experience. But the less than PG VR uses go far beyond ordinary pornography. VR users may be able to engage in behavior that is illegal and unacceptable in the real world, such as virtual prostitution, torture, murder and other illegal sexual activities. This dark side of VR raises many moral and legal questions. It is foreseeable that legislators will be called upon to regulate VR to preclude user access to some types of experiences, which will surely garner the attention of First Amendment advocates. VR is lauded by users for the realistic and completely immersive experiences it provides. For example, users participating in a horror-themed VR experience display palpable signs of fear, signifying that the experience is quite real. By analogy, performing illegal acts in the virtual, yet life-like world, that one rarely, if ever, gets to perform in the real world would arguably feel even more real to the user and bring the action closer to a real-life crime. It is unclear whether VR’s incomparable realness and interactivity, coupled with the obscene nature of certain VR content, would render such content outside of the First Amendment’s protective cloak.

Because VR and the new HMDs have only recently gone public, many interesting issues arise as new uses and experiences with VR are created and reported. The number of products, experiences, and services utilizing VR will certainly continue to explode in the near future as the technology evolves. As the technology grows, so will the legal issues surrounding it. As with anything new, some anticipated hurdles will turn out to be non-issues, while other issues may arise and surprise everyone. With all of the uncertainty surrounding VR, one thing that can be said with confidence is that we have only just begun – and a new world of technology and law lie ahead.