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Legal Aspects of Augmented Reality Development

Submitted by on Tuesday, 7 September 20103 Comments

Very few developers I meet know anything about marketing their applications to generate sales or raise overall awareness, even less know anything about the legal aspects of software development. To find out if there are any special considerations that relate to the development of augmented reality applications, we contacted Pillsbury Law to get an insight into legal issues around virtual world & video games.

No mater what kind of software you develop, close your IDE, product mangers grab a cup of coffee; settle back and have a read of our exclusive Q&A with Pillsbury Virtual World & Video Game attorneys Sean F. Kane and John L. Nicholson. It could save you thousands in litigation costs.

Augmented Planet: Firstly, tell us about virtualworldlaw.com and how you help developers stay out of trouble.

Sean Kane:  Pillsbury was the first major law firm to establish a practice dedicated to virtual worlds, video games and social media (www.pillsburylaw.com/virtualworlds).  Augmented reality (AR) is a sector we follow closely.  We have about 30 or so attorneys in our Virtual Worlds and Video Games team who work with developers and other clients to ensure that they are complying with a whole host of cutting-edge legal issues.  We do this by engaging with clients at an early stage and are typically involved in providing advice on business model and technology design issues for a given service or application.  This lets us fully understand a client’s needs and vision for the application, and counsel them on necessary or problematic design elements – before significant time and financial resources are spent on programming and development.

We also routinely attend and participate in many industry events and legal conferences to stay ahead of emerging issues and technologies.

Our team started the Virtual World Law Blog (www.virtualworldlaw.com) to present daily analysis of rapidly evolving business, legal and regulatory issues associated with AR, virtual worlds, goods and currency, and other social media issues.

AP: From my experience, developers generally don’t worry about the legal aspects of the application.  They build it; release it, and then sit back waiting for Apple or Google to send the cheques.  Do developers really need to worry about the legalities of releasing software or is this just a lot of fuss over nothing?

Sean Kane:  Developers must absolutely be aware of and consider legal aspects prior to releasing an application.  Generally, all software is subject to some form of Intellectual Property (“IP”) protection (i.e. copyright, patent, trademark, trade secret).  There are statutory damages available if one developer infringes on another’s rights.  Damages can range from several hundred dollars to several hundred thousand dollars per occurrence of infringement.  We have seen numerous cases where even unknowing infringement was punishable with serious consequences.

So, burying one’s head in the proverbial sand is not sufficient protection.  The same goes for complying with applicable laws concerning things like privacy, virtual goods transactions, handling currency and other mechanisms.  This is an important point, because when you look at the industry, the traditional boundaries between what was a “game,” a “social media” platform or handheld app are all blurring.

The more features developers aim for across these categories, the more they need to appreciate and address significant regulatory issues.

John Nicholson:  In addition to the IP issues, we frequently see new companies try to take shortcuts by copying someone else’s privacy notice and terms of service (TOS).  Not only is this potentially copyright infringement, but a developer who merely cut-and-paste’s someone else’s TOS – which itself may have been blindly copied from another source – runs the risk of the TOS being deeply flawed and not relevant to their objectives and business model.  This presents serious business problems.

As a developer, your privacy notice and TOS reflect operational aspects of your business – how you plan to make money, protect your users and manage risks.  You may have made choices about how your applications and company will operate that are vastly different from TOS text that is widely copied.  If you are careless with your TOS design, you run the risk of actually violating your own TOS, privacy, and other rules.

Developers must avoid this pitfall, as it is a scenario likely to draw attention from government regulators such as the Federal Trade Commission (FTC) here in the U.S.

AP: If I am developing applications for a hobby or I’m a small company, isn’t worrying about legal aspects just overkill?

Sean Kane:  If you are developing applications merely for your own non-commercial use you may have a “fair use” defence available, but it is still necessary to understand the controlling legalities.  Moreover, if you are seeking to monetize an application being a “small company” is not a defence to legal liability.  What would be a better option is to retain counsel that are knowledgeable about augmented reality since a limited budget will go a longer way with attorneys that don’t need to be first trained about what you are developing.

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  • augmented-reality.net said:

    Legal Aspects of Augmented Reality Development – Augmented Planet…

    Very few developers I meet know anything about marketing their applications to generate sales or raise overall awareness, even less know anything about the legal aspects of software development. To find out if there are any special considerations that …

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