Page 25 - LA Games Conference Materials

1. Do Existing Laws Specifically Address VR arcades?
Few, if any, existing laws specifically address VR arcades. As is often the case, the law lags new technologies and business models. As a result, it is important to understand what existing laws may impact this field. It is also important to understand how differences between VR arcades and what has gone before may lead to new issues or new legal results with VR arcades.
2. What Areas of Law Are Applicable to VR arcades?
VR arcades involve a confluence of legal issues. Some of the relevant areas include laws relating to computers/software, games, VR, virtual worlds and entertainment venues. From an IP perspective, many patent, trademark and copyright issues will arise. Offering prizes to players or running VR arcade tournaments can create potential issues under federal, state and local gambling laws. Premise liability and other venue-related issues will arise. Consumer protection and privacy issues will also need to be addressed. Many other legal issues can arise.
As business models evolve, VR arcade operators may look to leverage the rapidly growing business models associated with eSports, competitive gaming and real-money skill-based gaming. These business models all implicate a host of legal issues, not the least of which are gambling-related issues.
3. What Forms of Intellectual Property Can I Use to Protect My VR arcade?
VR arcades may be subject to various forms of IP protection. Many functional aspects of interactive entertainment venues can be patented (see our White Paper on AR and VR Arcade Patents). Design patents may be used to protect the ornamental aspects of your game machines and the structural features of your venue. Trade Dress protection may be used to protect the distinctive, non-functional aspects of VR arcade premises. Trademarks may be used to protect the names and logos you use in connection with your business. Copyrights can be used to protect content and other creative aspects. Other IP protection may be available. We strongly advise you to seek IP counsel who understand the range of IP protection available in these areas and who can proactively advise you on a comprehensive IP strategy.
4. What Do I need to Know to Avoid Infringing on Others’ IP?
As with other forms of interactive entertainment, you need to make sure you are not infringing on others’ patents, design patents, trademarks, trade dress and copyrights. It is important to understand that some unique IP issues can arise with VR arcades. For example, merely having a copy of a VR-based video game may not give you the right to use it in a commercial context. Many games’ end user license agreements (EULAs) limit the license to personal use and prohibit commercial uses. Additionally, some VR arcades may use games in a way that constitute a public performance or public display. A separate license may be needed from the game publisher to use a VR-based game in a VR arcade. Use of third party trademarks (e.g., for VR hardware or games) in promoting the arcade may require a trademark license. Other IP issues can arise depending on the specifics of your business.
5. Can I Reward Players with Tickets Redeemable for Merchandise or other Prizes?
Subject to certain important limitations, you may be able to do so. However, this is a complex area of law and can vary by state and locality. It is critical to seek legal advice on this, because if you do not do it right, you may violate local, state or federal gambling laws. Some of these violations can constitute criminal activity. There have been a number of recent enforcements against arcades for illegal gambling.
6. Can I Run Tournaments Through a Virtual Arcade?
With the rapid growth of eSports and competitive gaming, it is likely that VR arcades will evolve to offer some form of tournament action. It is possible to run legal video game tournaments. Hosting eSports events at VR Arcades is also possible. However, it is critical to seek legal advice on this to ensure that your business model is legal and doesn’t constitute illegal gambling. This is particularly important when fees are charged to enter the tournament and cash or other prizes of value are awarded.
FAQs Regarding VR Arcade Legal Issues www.sheppardmullin.com -2-