Why is virtual reality becoming lucrative

Real legal limits in virtual reality

With the increasing spread of VR applications, the legal questions about the new technology are also increasing.

Virtual Reality (“VR”) is on everyone's lips, and there was hardly a more prominent topic at this year's Game Developers Conference in San Francisco as well as at this year's Gamescom in Cologne. What began in the games sector will, with the wider spread of VR equipment, also spill over into other branches of industry; While we are only scratching the surface of VR today, the possible fields of business seem to be almost endless. As with any revolutionary technology, however, it remains to be seen whether the current legal framework is sufficient to legally secure the current and future business fields, especially since VR technology will continue to develop. In particular, it is to be expected that VR equipment will be linked to additional (e.g. biometric) sensors.

Walk through the luxury apartment

VR equipment currently has many facets: from simple cardboard frames for mobile phones (e.g. "Google Cardboard") for around 15 US dollars for 360-degree videos to entire sets for around 900 euros, which not only contain high-resolution VR glasses, but also motion sensors including room measurement by laser and require a powerful PC (e.g. "HTC Vive"). The latter can catapult you into worlds that no one has ever seen before, at least in this intensity. And with the upcoming Playstation VR glasses and Microsoft's “Project Scorpio”, virtual reality will probably reach many more households. And the more VR spreads, the more lucrative the business areas become. You will soon be able to carry an entire - albeit virtual - cinema around with you to visit Matt Damon on Mars, and VR webshops will enable interested parties to take a much closer look at products - with luxury apartments this is already "real" reality. And how about being at least virtually live on stage during a concert of your favorite band?

Suspended picture virtually immortalized

From the point of view of intellectual property law, the matter initially seems clear: For example, to bring a game, a film or a concert to the VR, a corresponding license from the respective rights holder is required. If you have produced the content yourself or if you have a VR-specific license, the rights situation turns out to be clear enough. The same applies to VR web shops as long as the goods sold there have been brought into circulation in the EEA with the consent of the rights holder (e.g. the brand or design owner). In this case, the IP rights would be exhausted and the goods could easily be virtualized. In the case of a license that was only granted for a specific purpose, it would be necessary to check whether this would enable virtualization: For example, the Supreme Court had to deal with a case in which an artist had allowed a hotel to hang his works in the hotel premises; the “license fee” for this was EUR 83 per month. After the second payment was not made, the artist removed his works again. In the meantime, however, the hotel had already taken photos of the affected rooms and posted them on its website. On one of these photos the painting “Mozart Symphony No 41” (120x160cm) by the artist could be seen in the background. Since this online use was not covered by the license, the artist sued for omission and payment of a reasonable license fee. The Supreme Court only dismissed the claims because the painting was not sufficiently recognizable in the photo (4 Ob 208 / 09f). However, if the hotel had brought the room in question, including the painting, into the VR and put the virtual hotel tour online, the case would probably have turned out differently, especially since the virtual hotel guest could have looked around better and examined the painting more closely.

Sightseeing license

From a copyright point of view, the so-called panorama freedom can also play a role, for example in connection with VR city tours. It is basically regulated in Article 5 (3) of the Copyright Directive 2001/29 / EU; The member states were and are free to decide whether to provide for a corresponding regulation in their respective national law. Here the legal situation turns out to be not harmonized. The providers of VR city tours must therefore check for each country whether they are allowed to virtualize sights (such as buildings or sculptures) or whether they need a license and who should grant it.

But that's not all: the more VR spreads, the more use cases there will be, all of which have different legal implications. Just think of virtual films that turn you into an actor and not just a viewer; Corresponding horror films can react to the field of vision of the "viewer" and z. B. fade in appropriate shock effects. However, this technology would also make it possible to place subtle advertisements - for example in the form of product placements. In such a scenario, Section 31 of the Audiovisual Media Services Act (“ADM-G”) must be observed, according to which audiovisual advertisements - and therefore also advertisements in VR - must be clearly identifiable as such. Concealed advertising is generally not permitted, which in turn can have consequences not only under the ADM-G, but also under the law against unfair competition ("UWG") (cf. eg RIS Justice RS0123239).

Film could react to the viewer

In addition to intellectual property law, advertising law and the UWG, data protection law will ultimately also play a major role in virtual reality: While the current VR equipment is "only" equipped with cameras and motion sensors, it is only a matter of time before it other (e.g. biometric) sensors can be linked. Smartwatches are leading the way: at the moment, they may only measure heart rate, but soon they could turn into potent medical devices that measure and monitor all possible vital functions. This data could then also be fed into VR applications: How about a horror film, for example, whose shock effects depend on the flow of data from the smartwatch? If the viewer's heart rate turns out to be low, the film “accelerates” in the VR glasses, and when the smartwatch “ticks” close to the heart attack, the film switches to adult-friendly shock effects. Depending on their state of health, viewers could see a different film each time, although this is, of course, sensitive health data. These could be collected and processed on an anonymous basis outside of the data protection (consent) requirements. As soon as it is possible to draw conclusions about the individual behind it, the data collection and processing are subject to strict data protection law. This could be the case in particular if the person affected by data protection law has to be logged into their account in order to be able to access the content of a VR provider at all.

Pay attention to data protection

Since the overwhelming number of VR providers will be based in the USA or the (sensitive) user data will in the majority of cases probably be transferred to servers in the USA, it is questionable whether the current instruments - above all the “privacy Shield ", which has replaced the" Safe Harbor "agreement - offer sufficient or convenient data protection coverage for these data streams (cf. ECJ, C-362/14 - Max Schrems v. Facebook). The fully informed consent of the user under data protection law to such data collection and processing will therefore still be necessary - including the corresponding lengthy distribution of information and declarations of consent.

From today's perspective, it can be assumed that VR technology will raise many legal questions and that all of these questions must be answered on solid (legal) bases; The profitability of any business opportunity depends to a large extent on whether it is on legally secure feet. As with any revolutionary technology, answering all of these questions will take (a lot) of time. What is certain, however, is that the “legal” breakthrough of VR can only be postponed, but in no way stopped.

To the author

Alexander Schnider is a partner at GEISTWERT Rechtsanwälte.