This article is written by Abhinay Bhattacharya, pursuing a Diploma in Intellectual Property, Media and Entertainment Laws from Lawsikho.com.

Introduction

Let’s start with a person John. John is an Animator and a Game Developer. One day he creates a game called War Machine that is an online first-person shooting game. The game has many features one being the ability to scroll through and select hundreds of guns from the armoury shop. John has designed the guns from the replicas of the actual guns and has even inscribed the names of the guns on the weapons itself. 

John being a fresher in the gaming industry has the idea just to develop this game as a test project and to gain positive feedback from its customers. He publishes the game on the internet and within few weeks the game has reached new heights and is among the top recommended online games. But little did he know the outcome of this golden egg. Within a span of time he starts receiving several Trademark Infringement and Copyright Infringement notices from actual manufactures of the guns and the ammunitions. 

John’s deary path to success has been hurdled with a mountain of legal mess and is now fighting for the survival of the game. 

The situation above clearly states the aspect and scope of Intellectual Property including Trademarks in a Virtual Reality (VR) environment and creates a scenario how an infringement can happen. As VR provides a real-life experience to its users and has a very thin distinguishable line from actual reality, the laws governing them should be accordingly similar. 

Virtual reality: Past, Present & Future

History of Virtual Reality

Virtual Reality is still an emerging and developing technology but its root was planted way back in 1950s. Then, a 3D chair with the ability of sound, vibration, smell generators etc. called a SENSORAMA was used that tickled almost every sense of a person using it and gave an out of the world experience.

The term Virtual Reality was actually coined by a researcher and VR specialist, Jaron Lanier in 1987.

With many failures in the upcoming models and after two decades, the VR development company Oculus introduced a brand-new VR device called Rift in 2012. This was the first time when the world was introduced to the futuristic design and approach in the VR technology.

After that many multimedia and technological companies like Sony, SEGA, HTC, Samsung, Google and many more started developing new VR headsets that were light in weight, easy to handle and gave top notch satisfaction.

Recently Facebook bought Oculus VR for $2.3 billion and is now one of the leading companies in the production and development of advanced VR technology. 

A timeline was created by Goldman Sachs in 2016 to illustrate the major players in this industry:

How Virtual Reality (VR) or Augmented Reality (AR) Technology Functions

To start with, a VR a user must have a Console or a PC connected where he can run the application or game. He also needs to buy the VR device and install the app that will monitor the VR.

The VR and AR are almost similar to each other but there is a slight difference when it comes to their functioning.

• VR– The VR works by sending a signal from the computer or console to the HMD (Head Mounted Display) device. The device then takes the video feeds and displays them simultaneously on each eye. The headsets come with lenses that helps to focus and crisp the image for a more immersive gaming experience.

A Sony PlayStation VR © 2016 HMD

As the users wear these HMDs and move around, the video feed display changes accordingly. The HMD sends video signals according to the movements and refreshes the displaying image as the user moves. These images displayed as video are measured as FPS (Framerate Per Second) and big tech companies always aim for developing devices capable of higher framerates. Sony has set a standard of minimum 60fps or else the device won’t be certified by Sony.

The body movements made by a user wearing a VR device is done by a technology called Spatial Mapping. VR uses technologies like LEDs, infrared sensors, accelerometers, gyroscopes etc to plot the movements. The main aim of the device makers is to reduce the lag in the feed as much as possible.

There are two methods to track the body movements. First being the Optical Marking where imaging devices called optical markers are used that track and send signal to the VR device. The second being Non-Optical Markers where a user will wear an equipment or hold a controller that are equipped with sensors which monitor and track the movements of the body and converts them into electrical impulses.

AR: AR uses real time images with the help of webcams or cameras and overlap two- or three-dimensional computer images over them. The AR system uses the real-world images as it is and adds the programmed data images of the computer to those images compiling them to be as a single image.

There are two types of AR first being Marker-Based AR where a camera or webcam uses a marker to determine the image and then processes the image for information to overlay the computer image on the marker. Scanning of a QR code works on this principle of AR. The second type is Marker-less or location-based AR, as the name suggests it renders and processes the real-world images without the help of a marker and displays the virtual image according to the location of the image. Google lens is bases on this type of software and technology.

Future of VR Technology

The VR technology has witnessed a drastic surge in the market for this industry after 2014. It is estimated by the Goldman Sachs that the Gaming Industry including the Virtual Reality industry could be from $80 billion industry to a whooping $182 billion dollar industry till 2025:

In current times the top devices are of the Oculus Rift, Google Cardboard, Samsung Gear VR, HTC Vive, and Sony PlayStation VR. The price of these VR devices is less than any smartphone and cost for almost a $100 each.

According to Mark Zuckerberg, the Facebook CEO, VRs will provide an experience in live classroom studies, face to face doctor consultations and a whole new experience in gaming and visual interactions which will make it a new communication platform.

Now there are new VR devices that are much sophisticated and run on a console or a computer without any hassle costing around $100 dollars.

With such a booming industry and the contribution of big companies like Google and Facebook and also with the help of new tech developers the future of VR is for sure to achieve new heights and change the course of history through technology.

Trademark infringement issues and conflict with VR

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Trademark Law on VR

As the demand of the VR technology is increasing the developers are doing their best to stay within the legal ambit and resolve any complications arising out of it. Various major legal issues of IP infringement are at stake when dealing with virtual world.

Trademarks provide a unique identity to the goods or services of the business provider and helps in maintaining a separata and outstanding image in the society. The law provides that a trademark has to be 1) distinctive, fancy and unique; 2) to be used in commerce, to receive protection. A trademark infringement can be challenged irrespective of whether it is registered or not. The Infringement can be challenged on the basis of similarity with the conflicting mark malicious intent, consent to use, damage to the goodwill, etc.

A plaintiff must show the following points to prove the infringement of trademark: (a) the mark is eligible for trademark protection, (b) he is the owner of the mark and (c) the defendant’s use of the mark causes a likelihood of confusion as to the origin or sponsorship of goods or services.

For a mark to be infringed under the virtual reality world it will depend on the scope of the trademark agreement. The agreement must clearly mention that the mark covers goods in all type and forms including virtual and intangible goods.

VR developers can also show and prove the defence that mark used is for Nominative Fair use. A Nominative Fair use when a company uses a third-party mark as the goods and service of the third party for the purpose of advertisement of its own goods or service. For example, the use of Coca Cola mark by Pepsi in their ads to show the comparison and sale of its own goods.

To prove Nominative Fair use the courts require to satisfy three criteria: (1) the public must not be able to identify the trademark owner’s product without use of the trademark, (2) the party must use only as much of the mark necessary to identify the product, and (3) the party must not imply endorsement by the trademark owner where none exists.

Precedents defining the Trademark Infringement

• In the case of Marvel vs NC Soft Corp., NC Soft had created a game called City of Heroes where people could make their own characters and choose avatars and also could change the apparels of those characters. However, those characters and their costumes resembled a lot to those of the characters owned by Marvels Comics. Thus, Marvels sued NC Soft claiming that NC Soft has copied the trademarks without permission and has done infringement. The court dismissed Marvel’s claim and has clearly stated in this matter that NC Soft has not committed any infringement as the marks were not used for any trade or commerce in the respective goods and services.

Thus, it becomes difficult for trademark owners to prove infringement in the virtual world when there has been no sale of good or services through the virtual platform.

• A different kind of issue may also be possible for a Trademark owner will be if any damage is suffered by the mark used in a VR world. For instance, in the world-famous game Pokémon Go, real world pictures are shown in the game. Thus, if Trademark logos may be used as poke stores and that the game in reality shows the logo in accordance to their use, then a trademark owner may file an infringement suit if he doesn’t want his mark/logo to be associated with the game. But the million-dollar question arises that will such case be maintainable? As again in this instance no damage is caused to the mark thus, any claims asked would not be entertained by the court. However, a truce can also be made by both the parties as the logo and the game can help each other symbiotically. Brand owners can always start working with the VR platforms to reach a singular objective of gaining popularity and profits together by displaying the logos in their virtual worlds.
• A successful claim may arise if a virtual platform sells in reality goods or services under a copied mark. A similar incident aroused in the case of Taser vs Linden in 2009. Linden Research had developed a popular game called Second Life at that time, that sold exact replicas of the Taser Company’s stun guns to its players with the Taser brand mark imprinted on it. Taser then sued Linden Research that they had copied the mark and had committed Trademark infringement. They also claimed that the guns in the game were sold in online stores that had pornographic content and thus this was damaging the reputation and goodwill of the company.

Later, Taser and Linden settled the matter and the game removed the guns from the online stores. 

Any VR platform should refrain itself from copying a mark to save itself from any future infringement issue. However, if in dire need it can always acquire the license of the Trademark and use accordingly in the VR or can always enter into a litigation stage and deny all the contentions made against itself. 

• In the case of E.S.S. Entertainment vs. Rock Star Videos, a strip club sued the game Grand Theft Auto: San Andreas as they had copied the trademark and trade dress of the club and infringed the mark by using it on a building in the game. The court relied on the two-pronged test mentioned in the Rogers v. Grimaldi case. The test states that 1) the use of a trademark is not actionable unless the use of the mark has no artistic relevance to the underlying work 2) the use of the trademark is explicitly misleading as to the source of the work.

The Ninth Circuit Court held that the First Amendment protected the Rock Star games as the public wouldn’t have recognized the mark on the building in the game and associate it with E.S.S. Entertainment or that E.S.S. Entertainment would have produced the game. 

• In the case of Mil-Spec Monkey, Inc. vs. Activision Blizzard, Inc, Activision games had copied the trademark of the plaintiff and had used it as a patch so that the players could choose to wear on their costumes. Consecutively, Activision was dragged to court, but the court ruled out in favour of Activision and said that the patch had an expressive purpose that was protected by the First Amendment and also Activision never showed that it had any interests with the plaintiff.

VR developers can save themselves from the Descriptive use of a mark by actually describing any prospect of the advertised goods or service and the mark must be used in normal course of language too.

Conclusion

Virtual Reality is one of the growing industries and has gained mass popularity and recognition world-wide. In the next five to ten years this is going to be one of the largest sectors aiding the gaming industry. The VR and game developers must always be vigilant before adopting any mark and must follow all the laws and acquire license from the owner before adapting the mark. With the increasing demand of VR, it is now mandatory for the developers to safeguard and protect themselves from any kind of infringement by properly educating themselves about the current laws and mitigating any possible issue. This will not only provide a hassle-free VR environment but also a win-win situation for both developers and customers. 

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