I have a guest post for you today. It’s by Gary Nissenbaum, Esq. (not pictured at right), the managing attorney for the Nissenbaum Law Group. His firm focuses on intellectual property cases and works with developers and cases pertaining to apps regularly.

Protecting the Developer’s Legal Interests: A Different Aspect of Augmented Reality Apps

By Gary Nissenbaum, Esq.

Recently, there has been a virtual tsunami of articles about the so-called hidden dangers of using the Pokémon GO app. The vast majority of them concern potential violations of the privacy rights of both consumers and landmark-owners. The media’s Chicken Little-like take on this is that augmented reality apps are opening the door to a dystopian future.

However, what has not been widely discussed is the impact of all this on the developers of augmented reality apps. That deserves some space as well.

I am the managing attorney of the Nissenbaum Law Group, LLC, a boutique commercial law firm located in NY, NJ, PA and TX with a focus in intellectual property. Our firm handles a fair amount of work involving apps. This includes everything from licensing agreements and movie and book deals to lawsuits over infringement of our clients’ intellectual property. We have reviewed the Pokémon GO controversy from the developers’ perspective and have come to the conclusion that it raises some very intriguing legal issues. Here are a few.

  1. What sort of access is really necessary in order to utilize the app? Many commentators have complained that signing into Pokemon GO provides “full access” to users’ Google accounts, i.e. gmail, maps, contacts, calendar, etc. See Slate.com’s excellent article on this concern. But does the app need to require a user to give total access to their Google account or is that simply an unnecessary overreach?

    If not, why stir up the hornet’s nest of privacy concerns when you can simply dial back the access without impairing the app’s functionality? The developer may not have complete control over how the app is downloaded, but that is precisely the point. Indeed, implementing such legal protections might give the developer a marketing edge to sell a more privacy-friendly product when others are not, e.g. end-to-end encryption. On the other hand, many developers have taken the position that no change is necessary since the heightened access level is fully disclosed and consented to by the app users in the terms and conditions and privacy policy. Either way, the developer should enter this legal thicket with eyes open. There is a downside of having the “benefit” of free access to user data.

  2. The web has been rife with articles concerning Poké Stops and Pokémon Gyms located at properties owned by people who have no idea that they have been selected. Notable examples of this have come from such wide-ranging landmarks as the Holocaust Museum and Arlington National Cemetery. Setting aside the concern that it can be irritating to suddenly have 50 people show up at a national landmark because it has now become part of a video game, there are serious questions about whether this is also an invasion of privacy.

    State laws differ, but generally, invasion of privacy breaks down into three basic categories. As set forth in the Restatement of the Law, Second, Torts, § 652, they are:

    • Intrusion Upon Seclusion – One who intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the intrusion would be highly offensive to a reasonable person.

    • Appropriation of Name or Likeness – One who appropriates to his own use or benefit the name or likeness of another is subject to liability to the other for invasion of his privacy.

    • Publicity Given to Private Life – One who gives publicity to a matter concerning the private life of another is subject to liability to the other for invasion of his privacy, if the matter publicized is of a kind that
      (a) would be highly offensive to a reasonable person, and
      (b) is not of legitimate concern to the public.

    It is obvious that any one or all of these could apply to the legal issues raised by augmented reality technology.

    So how can the developer be protected? A good start would be a waiver of liability. It is critical that the terms and conditions for the app waive liability not just for the company distributing it, but the developer, as well. Another important consideration is whether the developer can obtain a suitable insurance policy that would cover these sorts of claims. There is no way of being completely protected, but such measures at least can offer a partial shield to potential liability.

  3. Where does copyright law come into all this? Let’s consider the following hypothetical: the XYZ Candy Company is known throughout the country as being the best place to buy high-end candy and related items in bulk. It has a tremendous Internet presence and has franchised stores all along the eastern seaboard. Its unique building design—which is in the shape of one of its candies—has been copyrighted (Yes, under the right circumstances, a building design can be the subject of a copyright).

    But now, the XYZ Candy Company building also has become a Pokémon Gym. Players from miles around aggregate to that location because the name and logo are depicted in the app as a Pokémon Gym location. At what point does this mean the app is using the copyrighted design in violation of the copyright registration?

    The concern is not just that a developer would lose a lawsuit like that, but that they would be sued at all. Even a successful defense against such a challenge would create all sorts of negative consequences for the developer, e.g. litigation cost; backlash from the fan base; strain on the relationship with the app distributor; etc. If the potential for a copyright suit relating to building design is significant, the developer should consider negotiating license agreements / location releases with the copyright owner to specifically authorize the app’s use of it.

  4. Another legal risk for the developer that should be mitigated by appropriate waivers of liability and indemnification clauses is a slip and fall claim. Believe it or not, there are already proposed laws that would prevent people from walking in public locations while utilizing their cell phone. These laws would penalize pedestrians who use the sidewalk while distracted: something which would only be exacerbated by using a cell phone with an augmented reality location app. (And while we are on the subject, how about liability for using the app while driving?)

    This raises the obvious question of who would be indemnifying the developer in this scenario. Perhaps the user. They could, on the one hand, hold the developer harmless from the user’s own claim for damages caused by the user’s negligence and, on the other hand, indemnify the developer for any claims by others (third parties) for damage that also arose from the user’s conduct. While not foolproof, the best way to try to obtain this protection would be to include it within appropriate terms and conditions for use of the app.

  5. An integral way that augmented reality apps can be monetized is for the property owners to pay (perhaps on a per visitor basis) to be listed as a sponsored location. This can be complemented by such businesses using their status as an augmented reality location to provide discounted services to participants. All of this raises the question of how the developer can maximize the value of the brand and the monetization opportunities. Proper intellectual property registrations and a strong licensing and enforcement regime would be critical to doing so.

    Let’s take the example of a restaurant that advertises itself as a “Poké Stop” and utilizes a game image in connection with the stylized “Poké Stop” mark in its store window. That is arguably an instance of both copyright and trademark infringement. To best enforce those rights, however, it would be important for the game developer to have federally (if not internationally) registered those intellectual property rights.

    But why is it important to inhibit this type of use? Doesn’t it help promote the game? Perhaps, but, on the other hand, once a restaurant can associate itself with the game and the developer for free, the opportunity to sell that right to another restaurant diminishes greatly. Why would Restaurant A pay to be a sponsored location, if Restaurant B is doing it without paying? The value of the license—the amount that Restaurant A might pay the developer for that opportunity—is greatly enhanced by properly policing the intellectual property and not allowing third party infringers to use those rights without permission.

    Moreover, even if the developer is not seeking to make money from these opportunities, it still behooves it to have a license in place. Having a proper license can help the developer maintain brand integrity and quality control.

    As to brand control, for example, if the game is sold and targeted as being family-friendly, it will be important to ensure that the reality-based locations that are associating themselves with the game and its intellectual property, are appropriate venues, rather than liquor stores, places of adult entertainment and so forth.

    Quality control is also critical. A license can help maintain this and ensure that a location using the brand indicia of the game does not inadvertently tarnish it. In other words, if there is a restaurant that has health code violations, terrible reviews and other such challenges, the developer may very well not want to have its game associated with it. A proper license can help to provide an exit strategy and afford the developer enhanced rights.

Augmented reality apps are a quintessential example of disruptive technology. Their impact will extend beyond the digital world and affect other segments of society that may not currently even be aware of their existence. In the past, the law has done a very uneven job of keeping up with the pace of change created by such disruptive technologies… I could provide more examples, but I just saw a Mewtwo run into my law library. Gotta catch ‘em all…

Gary D. Nissenbaum is the managing attorney and founding principal of the Nissenbaum Law Group, LLC, a law firm with offices in New Jersey, New York, Pennsylvania and Texas. He has practiced continuously in the area of commercial litigation and transactions, with an emphasis in intellectual property and technology law, for over 30 years. Mr. Nissenbaum has been awarded the highest professional peer review rating (“AV”) by the Martindale Hubbell Legal Directory Rating Service.