Trevor Little

A new study from Perkins Coie and virtual reality proponent Upload has surveyed 653 industry professionals, including investors, startup founders and executives with established tech companies, to obtain a snapshot of industry expectations for the growth of the augmented reality (AR) and virtual reality (VR) environment. While still in its nascent stages, the success of Pokémon GO has provided a glimpse into the potential of AR – and if the technology goes truly mainstream, there will be a direct impact on the work of trademark counsel.

Until recently, AR and VR technology have been hyped in technology circles but hasn’t experienced wide public interest or adoption. It could be argued that this all changed in July. As the report notes, the day after a Fortune magazine headline proclaimed ‘It doesn’t look like virtual reality is a thing yet’, Pokémon GO was released. The location-based augmented reality game was an instant worldwide hit. Crowds would gather when rare characters became available in particular locations. Authorities released warnings about player safety following reports of users trespassing on private land, sustaining injuries while playing and - in one instance - having to call 911 after getting stuck in a tree while seeking out a Pokémon character. Furthermore, lawsuits have been initiated over the placement of characters on private property.

Last week, downloads of the game surpassed the 500 million mark. So was this the ‘big bang’ moment for augmented reality? While a highly significant development, it is important to note that, although Pokémon GO has taken AR to the masses like no other launch to date, it was building on a much-loved property, creating a unique brand proposition that will not be easily replicated. For many companies in the AR/VR space, there is still much work ahead – with a lack of compelling content, cost and issues with the user experience viewed by industry specialists as the main impediments to the expansion of the industry.

In the survey, the lack of content offerings was seen as the most significant obstacle by 37% of respondents, with one arguing that investors “need to fund content, not technology” because “only killer content will make it desirable”. However, encouraging investors to embrace a market that is still in its early stages is no easy matter, and 80% of AR/VR startup founders identified the lack of an established market as the greatest concern they hear from potential investors.

Positively, investor respondents to the survey do anticipate a growth in their investment levels over the next year, and perhaps the estimated billion dollar revenue that Pokémon GO is projected to generate this year will make this new technology an easier sell.

Looking ahead, the expectation is that VR and smartphone manufacturers will focus on developing mobile VR technologies in the next two years, while two-thirds of respondents expect the augmented reality market to surpass virtual reality in revenue (with 82% expecting that it will take at least three years to do so). So what does this mean for intellectual property counsel?

Interestingly, only 4% of respondents stated that the biggest obstacles to the growth of the market would be regulation and legal risks. Of course, the survey wasn’t a ‘legal’ survey and many of the respondents are focused on the development of products and finance-raising, so legal aspects have perhaps not yet become central preoccupations. However, for counsel in the technology sectors there will undoubtedly be challenges. When the identified legal risks were drilled down into, almost a fifth (19%) cited technology and IP licensing as concerns, while 16% cited intellectual property infringement and 11% rights of publicity. In an environment where new technology is being harnessed, and with content creation a central endeavor, IP disputes are almost inevitable.

Additionally, for trademark counsel in particular, the growth of AR/VR technologies could create unique new challenges. Back in 2010, after the Deepwater Horizon oil spill, we reported on a smartphone app which, when pointed at the logo on a BP service station, added a gushing oil pipe to the trademark – one of the earliest instances of how augmented reality can intensify reputational headaches, and the ways that content producers may utilise third party brands as they seek to manipulate the real world environment.

When it was in development, video promos for Google’s Project Glass highlighted how users could be delivered local content, overlaid on the physical world in real-time via an optical head-mounted display. Taking mobile advertising, through the use of geolocation technology, onto the street facilitates a unique user experience and creates new ways to position brands. However, where such devices result in messages tailored to your specific location, the question of how brand owners can monitor use of their marks is raised.

Similarly, the ability for brands to use augmented reality to bring products to life brings both benefits and challenges. An example would be empowering a consumer to enhance their pair of branded trainers, which could appear on the screen of their smartphone with all manner of additions, be it flashing or moving icons or three-dimensional enhancements. A powerful tool for marketers, but one that would require a canny approach to trademark prosecution when motion and sound marks result.

As argued, despite the success of Pokémon GO, the AR/VR industries have some way to go before they can be considered mainstream. However, the success of Niantic’s game provides a glimpse into both the possibilities of the technology and the public’s willingness to embrace new types of interactive content. For IP counsel, it is an industry to keep a very close eye on. 


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