MR Headset: Vision Pro, a “Legal Risk Pro” in the Virtual Reality Industry?

Is the MR Headset: Vision Pro a crucial tool for managing legal risks in the virtual reality industry?

Virtual reality technology practitioners should pay attention to the legal risks and compliance issues faced by virtual reality technology.

Key points

1. VR (virtual reality), MR (mixed reality), and AR (augmented reality) technologies are all broadly defined as virtual reality technology, and currently virtual reality technology has huge development potential.

2. With the release of the “Action Plan for the Integration and Development of Virtual Reality and Industry Applications (2022-2026)”, China’s virtual reality technology has relatively good policy support and legal environment.

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3. Virtual reality technology practitioners should pay attention to the legal risks and compliance issues faced by virtual reality technology, such as biometric identification risks, network content governance obligations risks, intellectual property protection risks and anti-fraud, and anti-misleading risks, and do corresponding compliance work.

Apple announced its latest flagship product, the MR headset, at the Worldwide Developers Conference on June 6, 2023. Testers of this headset call it “the best mixed reality device currently available.” CEO Tim Cook stated the revolutionary status of the MR headset at the beginning of the conference: “Mac brought us into the personal computer era, iPhone brought us into the mobile computing era, and Vision Pro will bring us into the spatial computing era.” Some media have called the MR headset the start of a new era. In fact, Apple’s Vision Pro not only brings together the efforts of its developers, but also carries the expectations of VR and AR practitioners worldwide.

VR and AR devices were seen as the carrier of the next generation of smart hardware devices after the smartphone five years ago, but the industry never seemed to take off, and no product has changed people’s lives as much as the smartphone. Like our attitude towards other new technologies, the Sa team has always been optimistic about the application prospects of the VR, AR, and MR industries, and is also concerned about the potential legal issues and policy trends related to this industry in China. The Sa team today briefly summarizes VR, MR, and AR technologies and analyzes the policy trends and legal issues of the relevant industries.

What are VR, AR, and MR?

VR, AR, and MR are abbreviations for Virtual Reality, Augmented Reality, and Mixed Reality, respectively. In most academic and scientific contexts, these technologies are collectively referred to as “virtual reality technology.” China also uses the translation of “virtual reality” to refer to VR, AR, and MR technologies in legal, regulatory, and policy-making contexts. For example, the broad concept of virtual reality was used in the “Action Plan for the Integration and Development of Virtual Reality and Industry Applications (2022-2026)” jointly issued by the Ministry of Industry and Information Technology and four other departments last November.

The so-called virtual reality is a simulation system that can create and experience a virtual world. It uses computers to generate a simulated environment and uses interactive 3D dynamic scenes to immerse the user in the environment. At the current level of technology, the easiest way to immerse users in a virtual environment is through a head-mounted display (VR “helmet”). After wearing the helmet, the user can experience the virtual world through the 3D panoramic display built into the helmet.

So what is AR (augmented reality)? As mentioned by the team before, augmented reality is part of the broad concept of virtual reality technology. In recent years, with the development of virtual reality technology, people have gradually needed to “integrate” scenes in reality with virtual scenes to “empower” some real scenes. For example, in the process of car navigation, the real scenery is presented to the driver through the windshield, and the virtual navigation route simulated by the computer can be projected on the windshield by electronic devices to form a display mode that combines the real road scene with the virtual navigation route, helping the driver to drive smoothly. This is the most typical application of AR (augmented reality).

MR (Mixed Reality) is a further development of AR (Augmented Reality) technology. MR directly combines real scenes and virtual scenes. At this time, the virtual scene is no longer limited to a navigation arrow route, but a truly multimedia scene. The promotional video of the MR helmet from Apple is the best interpretation of the MR concept. After the user puts on the MR helmet, the operation menu immediately “floats” in the real scene. By clicking on the “air” in front of them, the user can directly enter the corresponding application. MR technology completely integrates the real world and the virtual world.

Simply put, if we draw a horizontal line, the far left end of the line represents reality, the far right end represents virtuality, and narrow VR technology will appear at the far right end of the line, while the middle of the line is MR (mixed reality) technology, and the position closest to the far left end of the line is AR (augmented reality) technology.

Legal Prospects of Virtual Reality Technology in China

It is worth noting that although VR technology seemed to emerge five years ago, the prototype of VR devices can be traced back to the SIM-NET real-time simulation system developed by the US DARBlocking in 1983. Undeniably, technologies such as deep area image modeling, computer graphics, and perception, which are relied upon by virtual reality, are still in the early stages of research and development in China. Therefore, China has proposed to accelerate the construction of a digital China, accelerate the development of the digital economy, build a digital industry cluster with international competitiveness, and focus on making up for shortcomings. In November 2022, the Ministry of Industry and Information Technology, the Ministry of Education, the Ministry of Culture and Tourism, the National Radio and Television Administration, the State General Administration of Sports, and other five departments jointly issued the “Action Plan for the Integration and Development of Virtual Reality and Industry Applications (2022-2026)” (hereinafter referred to as the “Action Plan”). The “Action Plan” basically lays the policy foundation for the development of virtual reality technology in China and sets the tone for the healthy and comprehensive development of related industries. The “Action Plan” defines virtual reality technology as an important frontier of information technology and a major forward-looking area of the digital economy. It proposes that by 2026, China’s overall virtual reality industry scale should exceed 350 billion yuan, virtual reality terminal sales should exceed 25 million units, and 100 backbone enterprises with strong innovation capabilities and industry influence should be cultivated.

In the foreseeable future, practitioners in China’s virtual reality industry will receive substantial policy support, and the supply capacity of the entire industry chain related to virtual reality will gradually increase. It can be foreseen that the scale of the virtual reality industry will further expand in the future, and corresponding legal regulations and challenges will gradually emerge.

Finally

While enjoying the significant benefits brought by policies, practitioners in China’s virtual reality industry must not forget that regulatory and legal risks are important issues faced by any emerging technology industry. At the end of the article, the author’s team lists the legal risks and compliance issues that the virtual reality industry will inevitably face, to remind practitioners to pay attention to relevant risks.

1. Risks associated with the collection of sensitive information such as biometric information.

Currently, some VR headsets collect and scan users’ facial contours, irises, retinas and other biometric information during the wearing process. Lawsuits related to the collection of sensitive information by VR devices have already appeared overseas. According to China’s “Personal Information Protection Law,” relevant biometric information may belong to sensitive personal information, which raises the issue of the risk of collecting sensitive information. Practitioners must pay attention to compliance settings related to relevant issues.

2. Content governance obligations in VR applications.

As technology alienation becomes more unpredictable with the development of the “metaverse,” the famous “drifting bottle” in WeChat applications has been used for the dissemination of obscene information, and deep synthesis technology has been used for the production of pornographic videos and fake news. VR technology also faces the problem of technological alienation. The famous “VR sexual assault case” a few years ago is a typical representative of VR technology alienation. This requires practitioners in related industries to always remember their obligations for governing network information content.

China’s “Regulation on the Ecological Governance of Network Information Content” requires that network information content service platforms should fulfill the main responsibility of information content management and strengthen the management of information content on their platforms. VR application developers and operators should pay attention to fulfilling the content governance obligations stipulated in the above regulations to achieve content governance compliance.

3. Intellectual property protection and anti-fraud and anti-misleading obligations.

In fact, VR technology faces significant intellectual property protection issues. For example, under virtual reality technology such as digital twins, should the buildings in digital twin cities be protected by copyright? Does virtualizing an object protected by copyright constitute a corresponding infringement? All of these issues require detailed demonstration by practitioners to avoid infringement risks. Anti-fraud and anti-misleading obligations are also another major legal risk that the virtual reality industry will face. In recent years, virtual reality and artificial intelligence, especially AIGC technology, are moving towards integration, and AIGC technology is likely to generate many “falsehoods.” These false information, empowered by virtual reality technology, will have tremendous destructive power. Practitioners in related industries must pay attention to such legal risks, fulfill their anti-fraud and anti-misleading obligations, and enhance their compliance.

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