There's a new form of trademark infringement on the horizon. For the past few years, brand owners have been scratching their heads over what to do when third parties use their trademarks in online games and virtual worlds. The merging of parody, free speech and trademark infringement has led brands into some murky waters. Now programmers have come up with a new way to play with brand value: augmented reality.

It is an innovation that connects the real world with the virtual world: for example, physical branded products can be augmented in real-time with digital images. Point your camera phone at the logo on a BP service station and the screen displays the now infamous Helios with a gushing oil pipe bursting from its centre. This topical example is the basis for the first brand application of the system.

However, while augmented reality is already in use on smartphones and other devices, the brand and trademark implications are yet to be explored fully. "As augmented reality technologies become more prevalent, we will see increasingly innovative uses of brands, by brand owners and others. Much of this activity will be creative and positive, but some of it may also be unauthorized, and potentially damaging," says David Naylor, partner at Field Fisher Waterhouse. "Aside from the sheer increase in the number of issues that can be expected, we also anticipate that new categories of business will potentially get caught up in disputes: for example, the developers of augmented reality applications. We're also looking into whether the combination of mobility and augmented reality will create new substantive issues that have not yet been addressed in the law or by the courts."

Potential threats aside, augmented reality provides brands with a huge opportunity. Shrewd brand owners can develop applications of augmented reality that support their brand strategies and bring trademarks to life in new ways. A consumer may be able to enhance their pair of Nike trainers, which could appear on the screen of their smartphone with all manner of additions, be it a flashing swoosh or winged soles.

Naturally, this will be done by marketers and IT experts but trademark managers will have to ensure they are involved in the discussion to ensure the marks are used appropriately. Augmented reality might also beg the question: are motion marks about to take on a whole new life force?

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