IP Rights in VR and AR Gaming

“A common issue in VR gameplay arises when a headset receives images and media streams from, and transmits user-movement data to, a remote server rather than processing everything locally. That round trip creates latency. An invention that reduces that latency or computing demand may provide a patentable technical efficiency improvement.” — Gurbir Sidhu

The evolution of gaming into virtual and augmented reality (VR/AR) has transformed the medium from one that users observe and manipulate through a screen into one they physically inhabit and navigate. In doing so, it has shifted creative and commercial value beyond appearance alone to the combined experience of presence, responsiveness, movement, and sensory feedback i.e., how the game feels to the player.

That shift has led intellectual property (IP) law and practice to evolve, with rights holders adopting more deliberate and tailored strategies to protect the technical, creative, and commercial elements of an immersive game.

“The foundational IP principles remain the same, but VR makes their application more nuanced by complicating how protectable subject matter, ownership, infringement, and evidence are identified,” says Gurbir Sidhu, a computer science engineer turned lawyer in the Toronto offices of Smart & Biggar, a member of the IPH Network.

The challenges, it turns out, affect both how rights are acquired and how they are exercised.

Acquiring rights

Patents

“Merely moving an existing process or game mechanic into a VR/AR environment may not, on its own, support patent protection,” Gurbir says.

Patent offices usually look for a technical improvement in how the computing system operates, rather than an abstract idea or pre-existing logic implemented in a virtual environment.

“To meet that requirement, patent applicants can benefit from explaining the specific technical means by which the invention operates, including how physical user controls interact with the system, how haptic feedback is generated, or how the invention achieves efficiency gains over existing technologies,” Sidhu says.

By way of example, Gurbir points to a VR headset.

“A common issue in VR gameplay arises when a headset receives images and media streams from, and transmits user-movement data to, a remote server rather than processing everything locally. That round trip creates latency. An invention that reduces that latency or computing demand may provide a patentable technical efficiency improvement.”

While the virtual experience may drive player interest and commercialization, patent protection is more likely to focus on the underlying performance engineering. Those technical improvements, such as reduced latency or computing demand, may nevertheless enhance the gameplay itself.

Copyright

Compounding that problem, copyright protects the expression of a game—such as its art, code, animation, sound, and audiovisual presentation—but not its underlying ideas, methods, systems, rules, or functional mechanics. It may therefore protect the distinctive combination of expressive elements that contributes to a game’s “feel,” but not the method of interaction itself, including how a player moves or how the virtual world responds.

Patents may protect those functional aspects where the claimed implementation satisfies the applicable patentability requirements, leaving the two rights to cover different, but sometimes overlapping, layers of the immersive experience.

“The stronger copyright strategy is generally not to claim the feel of a game in the abstract, but to identify the specific expressive elements that create it. Studios and game developers may therefore benefit from documenting the creative choices that shape the player experience, including how visual, audio, animation, and interface elements are selected, combined, and arranged.”

Trademarks

From a trademarks perspective, there’s what might be called a registration gap.

“Trademark applications define the scope of protection sought. Companies entering virtual markets may benefit from mentioning their AR/VR uses in the initial filing or, where relying on existing registrations, considering a subsequent application to expand the coverage.”
Gurbir Sidhu

A case in point is the litigation in the United States stemming from a Los Angeles-based artist who released 100 NFT-linked digital images, titled “MetaBirkins” and depicting a fur-covered version of Hermès’ Birkin handbag.

Hermès owned registered rights in the BIRKIN name and asserted trade-dress rights in the handbag’s design, but its existing portfolio was directed primarily to physical goods rather than digital collectibles. That did not prevent enforcement, but it required Hermès to rely on broader trademark principles, including likely confusion, dilution, and cybersquatting, rather than a registration expressly covering the digital goods at issue. Hermès prevailed at trial and obtained a permanent injunction, although the judgment has been appealed.

Exercising rights

As Gurbir sees it, the practical risks fall into two broad areas: clearing immersive content for IP risks before launch and enforcing IP rights once infringement occurs.

Clearance

“Game developers and counsel need to consider both whether the game’s own IP is adequately protected and whether its content may infringe third-party rights. For example, an avatar or character created for a VR/AR environment may resemble a protected character from an existing 2D game or a brand symbol creating an IP infringement risk.”

Gurbir adds, “The risks in virtual environments extend beyond conventional IP assets. The use of a real person’s identity, likeness, or voice in VR space may also engage personality rights, which generally protect against the unauthorized commercial exploitation of an individual’s persona.”

In Canada, rendering real people as avatars may raise particular complexity because personality rights rest on several legal foundations. British Columbia, Manitoba, Saskatchewan, and Newfoundland and Labrador have statutory privacy torts addressing unauthorized uses of a person’s identity. Quebec protects image and personality rights through its Civil Code and Charter, while the remaining common-law provinces may recognize claims based on appropriation of personality, although the depth of authority varies. As a result, the elements of a claim, the treatment of post-mortem rights, and the available remedies may differ depending on where the claim is brought.

Enforcement

Enforcement difficulties in the VR/AR space begin with the collection of evidence.

“It is harder to preserve what happened in an immersive environment,” Gurbir says. “Content may be dynamic, personalized, or short-lived, while the most useful records, such as platform logs, publication data, and account information, may be controlled by the platform rather than the rights holder.”

This is so for several reasons:

Infringement in this space is not a tangible file or object: it is an experience that is ephemeral and mutable;
The evidentiary burden may be unchanged, but meeting it can be harder where recordings capture only part of a dynamic, personalized, or short-lived immersive experience;
Much of the evidence—asset files, code, upload logs, even the identity of users—sits on platforms’ servers, reachable only with the platform’s cooperation or a court order; and

“Detecting infringement can also be difficult because automated tools for identifying copied interactive 3D assets remain less mature than those used for audio, images, and video,” Gurbir says.

To be sure, there is a silver lining: virtual environments may leave behind better evidence than the physical world in the form of server logs, timestamps, transaction records, and tamper-resistant blockchain records, to name just a few. But that assumes the rightsholders can access them.

Licensing & Commercialization

Generally speaking, games aren’t sold and delivered by the studios alone.

“Games reach players through licensing arrangements with multiple delivery partners,” Gurbir says.

On the grant side, those partners may include platforms, storefronts, console or hardware makers, publishers and regional distributors; and merchandise, media and spin-off licensees. On the other side, licences may flow into the studio from engine and middleware providers.

“IP is a big component of each of those licensing structures, so when a game moves into VR, those licensing relationships should be reviewed to confirm that the granted rights extend to immersive formats, virtual goods, user-generated content, and the relevant platforms. Legacy language drafted for conventional games may not clearly address those uses,” Sidhu says.

Additionally, some VR/AR games are developed in community-built environments where players create the content by building levels, items, and experiences—but on the studio’s platform, tools, and terms. Those terms usually include a clause that grants the studio broad rights governing user-created content.

“That is where ownership and control can diverge,” Sidhu says. “The player may retain ownership of the content, while the studio or platform holds broad contractual rights and most of the practical control over how it is hosted, distributed, modified, monetized, or removed.”

None of this, however, is a reason to stay out of the virtual space—only a reason to enter it deliberately with experienced counsel ensuring rights are filed, cleared, and licensed for a place the old paperwork never imagined.