New developments in Virtual Reality (VR) and Augmented Reality (AR) are as innovative as they are exciting. The technology is getting better by the day, as is the content. But hastily implementing, and making available to consumers, these new technologies can expose companies to unforeseen risks, and correspondingly, legal liability.
Potential Legal Issues:
There are several potential legal claims that could arise from the increased proliferation of VR and AR technologies. Consumer safety, products liability, and torts/negligence appear to be the most glaring – as we have seen with litigation involving users of Pokémon Go. Other potential issues, such as privacy considerations (stemming from the collection of data related to consumer’s behavioral habits), also come to mind. There are cases from mediums comparable to VR, such as films, music, video games, board games, and amusement parks, which can serve as a proxy for VR and give insight into potential areas of liability.
The case law outlined below provides several key areas around which to focus: First Amendment issues, negligence and products liability, and privacy.
First Amendment Issues:
VR’s unmatched level of “interactivity” far surpasses that of any medium before it and enables a new level of depth of immersion. Many litigants center their claims on the principle that certain virtual worlds can affect, and ultimately alter, an individual’s behavior in the physical world. But most such cases are defeated because the mediums that allegedly spurred the undesirable behavior – which span board games, video games, and music – are protected by the First Amendment of the US Constitution.
In Brown v. Entertainment Merchants Ass’n, the United States Supreme Court held that video games qualify for First Amendment protection. The court specifically addressed the issue of “interactivity” as the alleged differentiating factor between video games and other, less interactive, mediums of entertainment. The Court concluded that despite the potentially disgusting features of some violent video games, “disgust is not a valid basis for restricting [artistic] expression.” The US Supreme Court in Brown did not accept that the increasing interactivity of video games distinguished the medium from previous creative expressions, and thus afforded video games the broad protections of the First Amendment.
But, if the content of a VR experience were to stray into the “instructive speech” territory, then the content would not be protected by the First Amendment. In Rice v. Paladin Enterprises, Inc., the 4th Circuit Court of Appeals held that defendant publisher’s book, which provided reader’s with detailed instructions on how to commit murder, was not entitled to protection under the First Amendment. The court held that the book’s methodical approach towards preparing its readers for specific criminal conduct disqualified the book from classification as an expression of the “abstract advocacy of lawlessness,” which is a form of protected speech.
Negligence & Products Liability:
Many tort causes of action involving video games rely on negligence as the theory of liability. In such cases, the plaintiffs often assert that the violent video game was the “cause” of a heinous act of violence, such as a mass shooting. Along with asserting claims of negligence, many of these cases also assert products liability claims, also under state law. As demonstrated below, it appears that in many of the products liability cases, which rely on state products liabilities statutes, that most expressions of art are exempt from the respective statute’s definition of “products.”
In James v. Meow Media, Inc., the parents of students victimized by a mass school shooting, alleged that video gaming, film, and Internet companies created content that “desensitized [the shooter] to violence and caused his actions.” The 6th Circuit Court of Appeals held that the risk of gun violence was not “foreseeable,” insulating the companies from liability. The court cited another case, Watters v. TSR, Inc., where the mother of a suicide victim sued the manufacturer of the game “Dungeons and Dragons.” There, the court held that the victim’s suicide was not foreseeable, as doing otherwise would have “stretch[ed] the concepts of foreseeability … to lengths that would deprive [it] of all normal meaning.”  In James, the court reinforced the reasoning in Watters, stating that it would be “impossible to predict [the degree to which] these games, movie, and internet sites (alone, or in what combinations) would incite a young person to violence.”
In addition to general contact and personal information we provide directly, different digital mediums over time have obtained access to increasingly more data. For example, websites use our browsing data and mobile apps use our location data. However, VR takes this further by, among other things, accessing where we are looking (eye tracking), tracking and recording our movements, and listening to what we are saying.
In 2016, Oculus Rift, which collects records of any online transactions and website and app usage patterns, faced some backlash regarding its use of user data. Companies such as Oculus often explain that they need to collect such extensive data to enhance user experience. Collection of such data also allows companies to understand how their products are being used and whether there is any room for improvement of its services. Yet the information and data gathered from VR technology, which tracks and records a user’s movements, raise real concerns about surveillance and data harvesting.
With several unresolved privacy issues stemming from use of VR technology, these privacy concerns will only be multiplied by the rise of AR. The interactive nature of AR, which adds digital content overlaid onto the physical world, can potentially draw unwitting participants who are within the AR users’ sightline and earshot. Moreover, AR provides companies the opportunity to see what a user’s space physically looks like, which is one data point among many that such companies can collect against the user. The adoption of laws to deal with these issues will likely lag beyond the increase in usage and sophistication of both AR and VR technology. Until then, users should press commercial purveyors of technology to address these ongoing privacy concerns.
The US Supreme Court’s holding in Brown that, despite the increasing degree of interactivity in video games, such works are considered creative expressions entitled to First Amendment protection, could analogously insulate VR and AR content manufacturers from many sources of liability. Additionally, the case law of most tort negligence claims, including products liability and intentional/negligent infliction of emotional distress, in comparable industries (such as video games, board games, films, television and music) clearly shows that most cases have been resolved against plaintiffs, and in favor of defendants involved in the creation and dissemination of creative works from the aforementioned industries.
But, companies involved in the VR and AR industries – ranging from those who create hardware, content, and software – must still take pro-active steps to further shield themselves from liability. Namely, VR and AR companies must be wary of the allowing their VR and AR experiences to tread into the territory of “instructive speech,” which, as demonstrated in Rice, may not be a form of protected speech under the First Amendment. Although the US Supreme Court in Brown stated that increased interactivity does not, in and of itself, exclude a medium from being designated as a “creative work” entitled to First Amendment protection, the combination of increased interactivity of VR, along with a finding of “instructive speech,” could potentially pose a threat to producers of VR content, and expose them to legal liability. The great unknown of liability lurks in the future use and possible abuse of private user data allowing marketers to gain access to consumers’ uncommunicated thoughts.
Article Contributors: John M. Gatti, partner and Co-Chair of the Entertainment, Media and Sports Litigation Practice Group at Manatt, Phelps & Phillips, LLP; Naader Banki, associate at Manatt, Phelps & Phillips, LLP; and Katrina Dela Cruz, associate at Manatt, Phelps & Phillips, LLP.
1- Brown v. Entm’t Merchants Ass’n, 131 S. Ct. 2729, 180 L. Ed. 2d 708 (2011)
2- Rice v. Paladin Enterprises, Inc., 128 F.3d 233 (4th Cir. 1997)
3- James v. Meow Media, Inc., 300 F.3d 683 (6th Cir. 2002)
4- Watters v. TSR, Inc., 904 F.2d 378 (6th Cir. 1990)
5- 300 F.3d 683, 693 (6th Cir. 2002)