Virtual Celebrity Avatars Mean Real Legal Headaches

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By Alexis Kramer

In the exploding field of virtual reality technology, users can chat with friends, try on outfits, and attend meetings with simulated presences representing what once only a physical body could.

But even as Facebook Inc., Alphabet Inc.'s Google, and other companies focus on developing new and better virtual reality tools, it’s still unclear how courts will apply laws written for the physical world to virtual ones.

To interact in virtual worlds, users can create characters, or avatars, that represent themselves. Avatars can replicate a user’s physical appearance with traits like dark hair or eyeglasses. They can be based on animals, plants or things. Or they can resemble celebrities or other famous people, an option that, in a growing universe of virtual alter egos, raises thorny questions about how far people can go to control the use of their images or other aspects of their identities.

“It’s difficult to draw bright lines from what we’ve seen so far,” David Adler, a technology attorney and principal of Adler Law Group in Chicago, said.

Virtual Reality Boom

International Data Corp. predicts worldwide spending of virtual reality and augmented reality—technology that superimposes visual elements onto an image of the real world—will reach $11.4 billion in 2017 and $214.9 billion in 2021. Tech giants including Google, Facebook’s Oculus, Microsoft Corp., and the Mozilla Foundation are “actively developing” a standard called WebVR to enable virtual reality experiences on the web, according to Google WebVR developer Brandon Jones.

As more virtual reality products enter the market, an increase in right-of-publicity litigation is likely, attorneys in the virtual reality field told Bloomberg BNA. Right-of-publicity laws generally prohibit the use of a person’s name, image, or likeness for commercial gain without consent.

Right-of-publicity law is hazy. Each state follows either common law or its own statute. No federal law is on the books. When right-of-publicity litigation involves virtual reality avatars, new questions are sure to emerge, such as whether an avatar based on a celebrity has sufficiently transformed that celebrity’s likeness to be considered free expression, and whether the avatar is being used commercially.

Lines will “continue to be blurred” as courts consider right-of-publicity claims stemming from virtual reality avatars, Jason W. Gordon, a member of Reed Smith LLP’s entertainment and media group in Chicago, said. But there are precautionary steps that companies can take to head off such cases.

Different Enough?

Courts in several federal circuits employ a transformative-use test to balance publicity rights with First Amendment protection. Under that test, companies may be able to defend against right-of-publicity claims by showing that they sufficiently transformed a celebrity’s image or likeness into a separate thing that should be protected under the constitutional right to free expression.

It’s an open question though, as to whether an avatar can pass muster as sufficiently transformative. Whether a company can show that depends on the setting, the creator’s intention, and the way users perceive it, Bobby Ghajar, an intellectual property partner at Cooley LLP in Santa Monica, Calif., said.

For example, some companies have the goal of creating lifelike avatars and environments. If a company lets users create or choose an avatar that’s indistinguishable from a celebrity, they may have more trouble showing that an avatar is a work of free expression than a company that lets users create custom, distorted, or dramatically different avatars, David Hoppe, a virtual reality attorney and principal of Gamma Law, a practice group within Access International Law Group PC in San Francisco, said.

Avatar maker Morph 3D gives developers and users a number of morphing abilities to create unique, expressive avatars. Users of virtual reality platform High Fidelity as well as JanusVR—a virtual universe inside the web itself—can choose to customize an avatar or make a lifelike one.

Hoppe said that the ability of VR to create 360-degree experiences may help companies pass another balancing test called transformative works, under which courts look at whether the content of the entire work transforms a person’s likeness into something new. With a 360-degree experience, it may be “easier for a virtual reality creator to say a celebrity is minimal in the overall field of vision,” he said.

Use Matters

Companies can also defend against right-of-publicity claims if they can show that the avatar at issue isn’t being used for commercial gain.

The concept of commercial use is already vague when it comes to video game avatars, David E. Fink, a virtual reality and IP attorney and partner at Kelley Drye & Warren LLP in Los Angeles, said. In the virtual reality context, it will be “at least as blurry” as with video games, he said.

The use of the technology is essential in determining commercial use, Fink said. If virtual reality is used to simply enhance a traditionally expressive experience, the product will likely be protected by the First Amendment. But if VR is used for gaming, one would have to look to video game right-of-publicity claims, which have resulted in a “murky, inconsistent field of court rulings,” he said.

Because the uses of virtual reality are endless, the outcomes of right-of-publicity claims arising from other types of experiences, such as for training or educational purposes, may be even more uncertain.

Video Games to VR

Courts asked to decide whether a virtual reality avatar runs afoul of right-of-publicity law are likely to look to existing cases involving video game avatars, such as the Madden NFL football players created by Electronic Arts Inc., and the Grand Theft Auto V characters created by Take-Two Interactive Software Inc.

The U.S. Supreme Court last March refused to review an appeals court ruling, in Davis v. Elec. Arts Inc., that the use of ex-football players’ likenesses in the Madden NFL series wasn’t transformative because the game portrayed athletes doing the same activity for which they are known in real life. The case is still alive in a California federal district court.

Two separate cases by Lindsay Lohan and Mob Wives star Karen Gravano over Grand Theft Auto V avatars that allegedly replicated their likenesses are on appeal in the New York State Court of Appeals, after a lower court tossed the actresses’ claims. The New York Supreme Court held that even if the depictions were close enough to be considered likenesses, the game is a work of fiction protected by the First Amendment.

Can We Use Your Image?

To be sure, companies can make some moves to head off litigation—especially by requesting a celebrity’s permission before adding that celebrity’s avatar to their virtual reality experience.

If it’s impossible to get permission, however, and the use of that celebrity is critical, companies should “take advantage of the possibilities of virtual reality to transform the character,” Hoppe said. The entire physical image and field of vision are available for modification, and companies should take advantage of that to help defend against a potential right-of-publicity claim, he said.

To determine whether their product may violate the right of publicity, companies should look to the “strictest” state’s publicity law, given that state laws vary and companies may be marketing all over the nation, Matthew Schruers, vice president for law and policy at the Computer & Communications Industry Association, said. For example, Schruers said California has one of the strongest right-of-publicity laws due to its expansive scope and the remedies it provides for—statutory or actual damages plus profits and punitive damages.

Despite so much legal uncertainty, companies are not shying away from creating more celebrity avatars. Artificial intelligence company ObEN later this year plans to launch virtual reality experiences with AI-powered celebrities, CEO and co-founder Nikhil R. Jain told Bloomberg BNA.

However, Jain isn’t taking chances. The company is contracting with SM Entertainment Co. Ltd.'s “top celebrities"—and getting the right permissions to use their images and voices in its virtual experiences, he said.

Even so, as more celebrity avatars populate virtual worlds, right-of-publicity battles are likely to increase. As courts take on a greater role in this vivid new world of emerging technology, said Adler, the legal landscape is “definitely going to get grayer.”

To contact the reporter on this story: Alexis Kramer in Washington at aKramer@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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