Developments in virtual reality (VR) and augmented reality (AR) have undoubtedly streamlined traditional design and engineering methods. With VR technology, users are able to fully imagine themselves in a realistic replication of a physical space (think head-mount displays). AR technology supplements what can be imagined in the actual world by adding computer generated images (think Pokémon Go). By utilizing software and devices to map physical space in virtual environments, VR and AR technology allows parties to a construction contract to mitigate the risk of design defects and the inevitable claims and litigation that follow them. VR and AR sectors are predicted to generate $150 billion by 2020.
Using VR and AR technology reduces overruns related to accidents, delays, and design efficiencies, by providing more accurate, meaningful details, replicas, and simulations earlier in the construction process. Another major benefit of VR and AR technology is that it allows end users to engage with the design process earlier. For instance, take a hospital renovation project that specifies wall-mounted equipment in each patient room. Using VR, the hospital staff can virtually tour the room to confirm that equipment is the proper distance from the patient’s bedside and that the other facets of the project meet their design expectations. In the same vein, tenants who are wary of the impact of renovation project on their living space can actually walk through the project before expending a great deal of resources, to ensure that the design concept is to their liking. By allowing a user to virtually walk through the project, interact with a superimposed design, and modify designs with greater accuracy issues can be identified earlier and informed decisions regarding changes across various contractors and subcontractors can be made faster.
This technology provides a new tool for parties involved in construction litigation. Imagine walking jurors through a digital rendering to show them the extent moisture migration caused construction defects instead of explaining the degradation of a wall due to water gradually collecting within a stud cavity. Attorneys can transport jurors inside the construction details that can be moved, walked around in, and examined. This would involve coordinating expert evidence to educate the court on the technologies involved; but just as videos and computer models make their way into evidence, it is likely that VR and AR will find its way into construction litigation for its educational and persuasive value.
Avoiding VR and AR related litigation will require parties to design and construction contracts to consider:
- Ownership of VR and AR generated renderings. Ownership or IP issues pertaining to the use of VR and AR should be discussed early on in the project’s life, and drafted into the contract. Digital renderings created with VR and AR software upon hire may provide copyright protection for the creator of the rendering for ninety-five years. Under the U.S. Copyright Act, the creator of an original work created in a tangible medium may prevent others from copying or using that original work for a certain period of time, but does not provide protection against similar or near identical works that were independently created without knowledge of the original work.
- Whether to explicitly require the use of VR or AR technology or prohibit it.
- What constitutes a breach of contract. Under what circumstances would parties conclude that a resulting building does not look like the VR or AR rendering. What functions or disclosures are embedded into the technology system to ensure clear expectations are being communicated?
- Allocation of liability. If the construction contract does not require the use of VR or AR technology, which party is responsible if the technology was improperly used? If a construction contract does require VR or AR technology, who bears the burden to prove whether VR or AR could have prevented the problem?
- Security of the technology. VR and AR is not immune from theft or hacks, and a virtual rendering of a highly secured bank might be of interest to some malicious third-parties. How are virtual or augmented reality depictions of a project protected? What data is being collected, and is that data available to others?
- Whether the use of VR and AR technology warrants including mandatory arbitration clauses or class action waivers in construction agreements.
VR related litigation can be avoided if parties clarify their roles and relationships before sharing ideas and creating material for a project. To formalize the understanding of rights and expectations of all parties involved at the outset, parties involved in construction deals involving VR and AR technology need to update their checklists to:
- define the licensor and licensee of the VR or AR technology in the agreement, or create an entirely separate development agreement that identifies the rights and responsibilities of involved parties;
- convey ownership rights to existing and to new creations by (a) reserving title in preexisting intellectual property, and (b) defining the scope of ownership rights to any newly created intellectual property. Provisions involving ownership rights should also establish (i) future exploration rights (e.g., can a party repurpose the VR rendering?), (ii) exclusivity, and (iii) territorial scope;
- include confidentiality and non-disclosure provisions that (a) protect information learned from virtual or augmented reality depictions, and (b) require formal consent or release for renderings or creations to be repurposed or shopped around; and
- provide for adequate due diligence, including (a) a thorough check for infringement on third party rights, and (b) ensuring that commercial general liability insurance policies cover personal injury and property damage resulting from the use of AR and VR technology in the construction project.