Virtual Reality, Augmented Reality and Trademark Law: How Freely Can Imagination Run?

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We’re pleased to bring to you a guest post by Bhavya Solanki and Medha Bhatt, discussing the applicability of the fair use provisions of trademark law to unauthorised use of trademarks in the virtual world. Bhavya and Medha are 2nd year students at Maharashtra National Law University (MNLU), Mumbai.



Virtual Reality, Augmented Reality and Trademark Law: How Freely Can Imagination Run?

Bhavya Solanki & Medha Bhatt

Technologies like Virtual Reality (‘VR’) and Augmented reality (‘AR’) are witnessing a growth spurt and are bleeding into multiple facets of human life. We experience them while engaging in interactive gaming like Pokémon Go, using Snapchat filters or apps like IKEA Place, in education, simulation training, etc. However, due to their rapid advancement, the law is straggling behind – giving rise to a variety of convolutions. Among these, issues relating to trademark law are of particular interest to us.

Since one of the more riveting aspects of such technologies is that they grant developers or users with unrestrained creative freedom, they, in a quest to provide or enjoy increasingly realistic experiences, could attempt to base the virtual world on the real world and, in doing so, may end up mimicking trademarks owned by proprietors in the real world. For example, imagine you are a developer. All in good fun, you recreate your room in the virtual world. You recreate the walls lined with band posters. In fact, you even give your avatar the make-up design of a band member of KISS or name him Darth Vader. This seemingly harmless naïveté could give rise to a legal quagmire buffeted by a lack of concrete legislative framework and authoritative precedent. Suddenly, the Rolling Stones, KISS or Lucasfilm could be suing for anything ranging from trademark infringement to dilution.

This post deals with unauthorized usage of trademarks in the virtual world and possible defenses.

Insulating the Mimesis

Stipulations of Indian trademark law

In cases of unauthorized use of TM in the virtual world, as described above, even on a finding of trademark infringement or dilution, the use can be immunized through the exceptions provided under section 30 of the Trade Marks Act, 1999 (‘TMA’). Although there are numerous exceptions available under the section, the post focuses on the defense of fair use – and particularly on the principles of descriptive and nominative fair use as embodied under it. These principles are embodied under section 30(2)(a) and 30(2)(d) of the TMA.

In general, for an exception under section 30 to apply, it is necessary that the usage (i.e. the usage containing a mark similar or identical to the registered mark in question) does not imply association with the trademark owner; is consistent with honest commercial practices and does not depreciate the value of the goodwill in the mark. Further, per section 30(1) of the TMA, such usage must not take unfair advantage of or be detrimental to the distinctive character of the mark as stipulated.

Section 30(2)(a) permits a third party to use descriptive indications as to the kind, quality, quantity, intended purpose, value, geographical origin and time of production of the goods or services or other characteristics of the goods or services. Descriptive fair use is known to occur when the trademark is used to merely describe the defendant’s own products and not to refer to the proprietor’s products. Thus, section 30(2)(a) of TMA provides that use of a registered trademark, or a mark similar or identical to it, by a third party as a descriptor of its own goods or services, does not count as infringement.

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As per Section 30(2)(d) of TMA, a registered trademark shall not be infringed where, “the use of a trade mark by a person in relation to goods adapted to form part of, or to be accessory to, other goods or services in relation to which the trade mark has been used without infringement of the right given by registration under this Act…if the use of the trade mark is reasonably necessary in order to indicate that the goods or services are so adapted, and neither the purpose nor the effect of the use of the trade mark is to indicate, otherwise than in accordance with the fact, a connection in the course of trade between any person and the goods or services..”

Nominative fair use is known to occur when the defendant is using the proprietor’s trademarks to refer to the proprietor’s products. Thus, the distinction is drawn between trademark “use” and trademark “mention”, with the latter denoting nominative fair use.

Applying the above to the present instance, avatars bearing the names of trademarked characters can be defended on the grounds that the use is to directly refer to the proprietor’s trademarked characters only. For example, naming your avatar ‘Captain America’ would be to directly refer to the Marvel character.

Although the expression “nominative fair use” is not explicitly used in TMA, it has been accepted as a defense by the courts. Support can be drawn from the Madras High Court, which, after relying on the U.S. Ninth Circuit judgments, viz. New Kids on the Block v. News Am. Publ’g Inc. outlined the scope of the nominative fair use argument. The Court laid down a three-prong test for the nominative fair use defense to be applicable:

  1. the product or service concerned should not be instantly identifiable without the use of a trademark;
  2. just as much of the trademark as is reasonably necessary for the identification of the good or service should be used;
  3. the user should not do anything that would indicate sponsorship or endorsement by the trademark holder in connection with the mark.

Thus, the arguments above could be invoked to insulate an unauthorized usage in the virtual world.

Notwithstanding the above, Indian trademark law jurisprudence on the subject is underdeveloped. Therefore, jurisdictions which have had pronouncements on the issue, like the United States of America (‘U.S.’) continue to be a guiding light for Indian courts.

U.S. trademark law

Due to a dearth of case law directly dealing with AR / VR, cases pertaining to video games could provide guidance on how they may pan out as both immerse users in a detailed virtual environment (see here).

Fair Use…in Commerce

In the U.S., for a claim of infringement or dilution to succeed, “use in commerce” is a threshold requirement, meaning that the use should have been to label or reference goods or services in the course of commerce. In the case of Marvel Enters., Inc. v. NCSoft, Corp., wherein the players of a virtual world called ‘City of Heroes’ could create avatars identical to Marvel Superheroes, Marvel’s trademark claim was dismissed because it was seen that the use was not “in commerce” but was mere gameplay. However, the same might not necessarily follow in cases where the virtual game currency is exchangeable for real currency and the user could reap actual profits, as was the case in Taser Int’l, Inc. v. Linden Research, Inc., in which game, ‘Second Life’, stores were selling replicas of Taser’s stun guns to players.

The nominative fair use defense was argued by the creators of ‘Red Dead Redemption 2’, a western-themed video game set in the late 1800s, upon being sued for referencing the historic Pinkerton National Defense Agency (‘PNDA’) The game depicted two characters wearing the Pinkerton badges, the typical apparel of a Pinkerton detective, and were introduced as agents of the ‘Pinkerton Detective Agency’. It was argued that since the Pinkerton name and badge was used to refer to PNDA, only so much of the name and badge was used as was necessary, and customer confusion was not likely, the usage should fall under nominative fair use. Even though the suit was dropped before the courts could decide, it illustrates how the defense may be asserted in such cases.

Free Speech & Expression

There is yet another defense recognized in the U.S. of free speech which protects artistic expressions from trademark claims. While initially applied to written or spoken words, it has been extended to other mediums of expressions like music, films and even video games. It was applied to the depiction of a strip club in ‘GTA: San Andreas’ which was sued for trademark infringement. Recently, the game ‘Call of Duty’ was allowed to depict Humvees in the interest of free speech. Further, AR has also been held to enjoy this protection.

The defense becomes applicable after passing the two-pronged Rogers test (discussed in detail on the blog here) under which, firstly, the use of the trademark should have some artistic relevance to the underlying work, and secondly, the use should not be explicitly misleading as to the source or sponsorship of the work.

Both the defenses of fair use and free speech have been expressly provided under 15 U.S.C. § 1125(c)(3)(A) of the U.S. Trademark Dilution Revision Act, 2006 with the condition that the unauthorized use should not be as a designation of source i.e. it should be a non-trademark use and the use of the proprietor’s trademark should not be used as a symbol of origin for the defendant’s products.


Although Indian law still has much to learn from its western counterparts on this front, the unauthorized usage of trademarks in the virtual world can be insulated by invoking the sub-provisions under section 30 of TMA. Nevertheless, it may be advisable for developers and users to remain wary of using trademarks owned by others in the real world.

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