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Developing products for the VR market: intellectual property rights and other legal issues

As VR gaming technology moves closer towards being as good as (if not quite yet better than) real life, we consider some of the legal issues currently faced by developers.

The leading hardware and platform providers such as HTC, Oculus and Samsung offer convenient developer toolkits, but what legal implications arise from the terms that they require developers to sign up to?  And what broader legal risks should developers be aware of?

Intellectual property rights

In order to bring a VR product to an end user, various elements need to work together at the same time, including:

  • the VR content that is developed;
  • the underlying toolkit through which it is developed;
  • the platform through which it is advertised and sold;
  • the marketing materials that are produced;
  • the respective logos and branding and of the developer and the hardware; and
  • platform provider/device through which the VR content will be viewed. 

Each of these elements may contain underlying intellectual property rights that should be identified and addressed in the terms between developer and platform, including the grant of appropriate licences to enable all elements to work together.  Consider how long the licences that are granted should last; once an end user has purchased content, are there any circumstances in which it should be possible to take back that content from the end user, such as if a legal issue arises in respect of the purchased content?  The licences granted should address this, in addition to other necessary limitations on the scope of the IP rights held by both developer and platform.

Consumer rights

When selling VR products and/or services (such as product maintenance services to be provided to end users) it is important to bear the provisions of the Consumer Rights Act 2015 (CRA) in mind, which give end users rights including the right to a repair or a replacement if digital content is faulty.  A developer may have the opportunity to upload its own end user licence agreement (or 'EULA') when submitting content to a platform.  To ensure that compliance with the CRA and to avoid losing the opportunity to set out clearly, for example, the circumstances in which refunds for a VR product will apply, it is useful to upload and rely on a bespoke EULA rather than the default version provided by the platform, particularly if the default version is not drafted from the perspective of English law. 

Use of data

Platform terms are likely to contain specific provisions dealing with the ownership and use of different types of data generated through the sale and use of a VR product.  This may be split into user data that is generated through use of the product and data that relates to the product itself, such as sales figures.  In relation to user data, to the extent this falls within the definition of 'personal data' then the processing and other use of this data will be governed by data protection law. 

In the UK the new General Data Protection Regulation (GDPR) will come into effect on 25 May 2018.  Amongst other things the GDPR introduces higher standards regarding consent to use an individual's personal data, requiring unambiguous consent.  Given that the duration of agreements entered into with platforms may well stretch into next year it is important to look forward and consider the provisions of the GDPR when negotiating terms to ensure GDPR compliance.

Liability for health and safety issues

The basic English-law premise that liability for death or personal injury cannot be excluded in a contract applies to both your agreement with any platform and end users.  Hardware providers are likely to want to be able to recover any losses they might incur if any health and safety losses arise in relation to a VR product and may therefore include indemnity provisions to that effect in their standard terms, which developers might look to cap financially but may struggle to achieve with the big players.  Developers should check hardware provider's guidance on how VR headsets should be used and VR products provided; although it may not be possible for developers to limit liability contractually, from a practical perspective, the less scope for end users to complain of VR-related ill effect such as motion sickness, the better. 

Which law applies?

Skipping to the end of a VR platform's terms may well reveal the terms are governed by overseas laws, often those of a particular US state, rather than English law.  In order for a developer to be fully aware of the legal implications of signing a non-English law agreement, including the laws of the place that the agreement is subject to, then advice from a legal advisor qualified to practice in the relevant law should ideally be obtained, which could be costly.  A simple solution, if possible to agree with the platform provider (which admittedly may be difficult), is for the relevant clause to be amended to refer to English law or, if different, the law applicable to the developer's business. 

The issues referred to above non-exhaustive but highlight the importance of reviewing terms provided by VR platforms before accepting them.  By accepting a current set of terms a developer may be setting a precedent for any future arrangements it may wish to put in place, therefore negotiation of the terms provided by VR hardware and platform providers upfront is key to ensuring that any on-going legal risks are addressed and minimised.  

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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