Augmented reality and virtual reality technologies are beginning to enter the mainstream, with applications ranging from training exercises for doctors to simulations for NASA engineers. However, AR and VR industry leaders also say that there remain some unsolved legal issues worth monitoring, particularly when it comes to health and safety issues and trademark and copyright enforcement.

Law firm Perkins Coie released its fourth annual "Augmented and Virtual Reality Survey Report" earlier this week, detailing the growth of the industry and also some of its risks. The survey, completed by 191 industry professionals in January and February, found growing optimism for AR and VR technologies' long-term outlook, with more than 75% saying they expect immersive technologies to be mainstream within the next five years.

Kirk Soderquist, a co-chairman of Perkins Coie's interactive entertainment practice, told Legaltech News that there has been some discussion in the past 12-18 months about whether AR and VR are fads that are beginning to die out. But the survey shows that its growth is strong, though the practical applications of the technology may not be as visceral as once imagined. Survey respondents expect that the largest disruption outside of gaming and entertainment will be in health care (38%) and education (28%).

"While so much of the emphasis has always been on gaming and entertainment, and it continually will be, people are beginning to see the other applications and other use cases," he explained. "It may not be as fun and sexy and out-front as entertainment and gaming. The immersive experience that comes from that still has its pop and pow. But I think where companies are actually going to make money and we're going to see the innovation and killer apps probably come from other areas."

Still, there remain some barriers to growth, with the three largest being user experience, content offerings and consumer and business reluctance, according to survey respondents. But ranking fourth was legal and regulatory risks. Fourteen percent said legal and regulatory was the biggest risk for AR technologies, while 12% said the same for VR technologies.

The largest legal risk to industry professionals, perhaps unsurprisingly, was consumer privacy and data security, said 49% of respondents. Perhaps surprisingly, though, that number was actually down 12 percentage points from the 2019 version of the survey, in a decrease Soderquist attributed to privacy and security knowledge across the board in business increasing in recent years.

"I think people have gotten a better handle on it generally, as a necessity of becoming more compliant with the CCPA [California Consumer Privacy Act] and the GDPR [General Data Protection Regulation]," he noted.

Health and safety legal risks, in its first year being measured on the survey, were the third largest concern (also behind product liability) at 41% of respondents. Export control issues, meanwhile, more than doubled its percentage of concerned respondents, rising from 12% in 2019 to 29% in 2020, likely due to economy and trade war fears.

Soderquist said health and safety risks often go hand-in-hand with product liability concerns, though immersive technologies do also provide some unique safety risks as they push into specific industries such as manufacturing, HR/training and health care. As an example, he pointed to a technology that helps train health care workers to do lifesaving surgeries, which opens up exposure to other regulations.

"If it's not accurate or doesn't properly replicate an emergency situation, this is now a company responsible then for not adequately training their people," he explained.

Indeed, the ultimate legal risk might not be AR- or VR-specific at all, but rather related regulations that most tech companies never have to deal with, Soderquist said. A VR meditation app that is being integrated into a wellness and benefits program, for example, now has a number of new regulations to abide by from the Food and Drug Administration and other agencies. "Companies are like, 'I'm not a health care company; I don't have to comply with insurance requirements.' Well, if you offer your health care app in a plan with a company, now you do."

And this leads to more questions that lawyers in all industries deal with: How should a VR company notify its consumers to consent to auto-renewal terms? Or if you want to use a VR version of a celebrity such as Tom Cruise, how do you get rights to his avatar image?

"Those are things that gaming companies deal with all the time," Soderquist said, "but [now] take it and put it into VR, an area that people didn't contemplate when they wrote the agreement five years ago."