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Augmented reality: the legal realities

Posted on 07 August 2017 by Simon Leaf. Source: Retail Week

Augmented reality: the legal realities

Augmented reality is growing in popularity but what are the legalities that retailers should bear in mind?

In the late 18th century, Napoleon described Britain as “a nation of shopkeepers”. Fast forward three centuries and forecasters are estimating 30,000 retail job losses and about 15% of retail units to be vacant this year.

In order to draw people back to the high street, retailers are turning to augmented reality (AR).

AR integrates digital or computer-generated content through sound, video, images or data, changing how someone sees the physical space around them.

This was put into action with Nintendo’s Pokemon Go App, which saw a £15bn increase in the company’s value in a week.

Last year, Blippar turned Covent Garden into the world’s first AR shopping destination, which included an interactive AR reindeer hunt around the market.

With some of the biggest names in technology making significant investments in this space AR’s potential is clear, but retailers need to bear the following points in mind when dealing with technology vendors and engaging end users in this way.

Getting the contract correct

The relationship between the retailer, developer and platform providers can often be fairly complicated and therefore requires a number of different contracts.

In particular, any agreement between the retailer and the developer should include a service level and service credit mechanism to ensure that the end-product is produced on time and then appropriately maintained.

The retailer may also be keen to ensure that the developer doesn’t promote similar products with competitors. Any exclusivity provisions will need to be properly drafted and considered from a competition law perspective to ensure they are enforceable.

AR output: who owns the IP?

Does the AR product allow end-users to develop or publish content, such as an app that lets the user create and then publish a new design for a clothing retailer or amend existing product lines?

In such scenarios, it is important that appropriate terms are included in the development contract to deal with who owns the rights to such creations and publications, and to try to protect the retailer from liability if the end-user uses a third party’s intellectual property.

Data: the devil will be in the detail

Retailers will need to ensure that end-users have been adequately informed and the data they provide through use of the AR tool is lawfully processed and secure.

The end-user must consent to the specific use of their data and they must be able to withdraw this consent at any time. Burying the detail in a privacy policy or making use of the service conditional on accepting the privacy policy will not be good enough.

The cost of getting it wrong could be significant – with fines of up to the greater of €20m or 4% of global annual turnover under the new General Data Protection Regulation coming into force across Europe from May 2018.

Who’s responsible if something goes wrong?

Who should be responsible if an end-user suffers loss, such as an injury, as a result of using the AR product on offer?

Under English law, liability for certain losses – such as death or injury caused by negligence and fraudulent acts – cannot be excluded. However, where the liability sits for all other matters and who takes the risk of liability is generally up for negotiation and should be considered before embarking on an AR project.

This article was first published in Retail Week.

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