Augmented Reality in German law | A 360 degree overview

Augmented Reality (AR) applications have an established place in everyday life of many people and industrial processes worldwide. The law is sometimes struggling to keep up, however: Despite the increasing economic importance of AR, developers and users of AR applications encounter unsolved legal issues in a number of areas of German law.

AR and Intellectual Property

When AR applications monitor and process the user’s real life environment (as they do either constantly or at least when in use), they may conflict with intellectual property law, specifically the IP rights existing in the items of such surroundings. If these surroundings contain legally protected works, the recording and processing of such objects (including temporary RAM storage in the AR device) must most likely be considered as a reproduction under the German copyright Act (GCA), so that the consent of the author of the relevant work is necessary in general.

Unlike common law copyright regimes, German law lacks a general “fair use” exception. However, the copyright act does have a number of specific exceptions that can apply to AR applications under certain conditions:

• 59 GCA (so-called “freedom of panorama”) allows the reproduction of any work located permanently in public roads and ways or public open spaces whereby in the case of buildings this authorisation only extends to the exterior.
• Beside this, the exemptions made by Sec. 53 GCA (reproduction for private and other personal uses) or Sec. 44a GCA (temporary acts of reproduction) may be relevant from case to case.

Even if these exceptions may apply for many practical cases, certainly not all important fields of applications of AR technology are covered. For example, “freedom of panorama” does not cover reproductions made within buildings or by using additional “tools” which modify the perspective of a regular pedestrian (e.g. ladders, or drones), and the private copy exception obviously cannot cover commercial use of AR applications.

However, it might be possible to extend existing approaches in the jurisprudence of German courts in related fields. One possibly transferable doctrinal approach was developed by the German Federal Court of Justice in regard to the legitimacy of “thumbnails” used by online image search engines. The rulings in these cases can appear a little self-serving, but they do take into account the ubiquity of image search functions and presume a kind of general consent that one’s content might be parsed by such technologies. Following this ruling and given the growing significance and presence of AR, temporary and occasional reproductions of protected works made in order to enable the use of AR applications might be permitted under German law with a similar justification.

AR and GDPR

The possibility of collecting and processing personal data (including potentially sensitive data such as the state of health of recorded people, or payment data and passwords) by AR applications must be seen as highly problematic.

Under existing German law – which will not fundamentally change under the new General Data Protection Regulation (GDPR) on this point – the monitoring of publicly accessible areas with optic-electronic devices (video surveillance) is only allowed under strict conditions. The question arises to what extent this provision also applies for AR applications. German courts have not decided this issue yet, but do take a generally critical view of the practice of recording traffic videos with cameras mounted in private vehicles (“dash-cams”). However, AR recordings are not necessarily made to be stored and reviewed, so the cases are not entirely comparable.

If the AR applications also implement tracking functions, the user’s consent is generally required. Only if the use of personal data is needed to create, perform or enforce a legal obligation or quasi-legal obligation with the user, such consent is not necessary. Finally, if AR applications are used in a commercial setting (e.g. logistics provider equipping their employees with smart glasses), this triggers an obligation to involve the works council, if one exists.

Conclusion

This article addresses just some of the issues presented by AR. AR applications may also conflict with competition law (e.g. AG advertising inside a competitor’s premises) and the extent of the AR provider’s or user’s liability for damages caused by the use of AR applications is not ultimately clear under German law either.

However, a closer look at many of the underlying legal theories reveals that the tools are there to address the legal challenges set by the advent of AR. Providers and their lawyers will need to take them into account when designing the devices, services and contracts to go along with them, as the solution to a particular legal problem often depends on finer details of technical implementation.

Nevertheless, lawmakers, courts and legal scholars have their work cut out for them. AR will require the development of new solutions – with a sense of proportionality and a forward-looking approach.