Virtual and Augmented Reality: An Overview of the Patent Landscape

Apple’s release of the Vision Pro earlier this year showed that Apple is betting big on the importance of augmented reality (AR) and virtual reality (VR) technologies in the future. And they’re not alone.

Many early AR/VR devices didn’t live up to the hype (looking at you, Google Glass). But in recent years, the market for AR/VR has started expanding rapidly. According to a report published by Verified Market Research, the global market size for AR/VR is now projected to grow at a compound annual growth rate of 31.70% from 2024 to 2031.

What changed? For starters, the technology has since found growing application in diverse industries, from healthcare, to education, to retail — and that’s just the tip of the iceberg.

In addition, increased consumer demand for communicating and collaborating remotely, as well as technological developments that have improved the AR/VR user experience, have all helped to encourage bolder adoption.

For folks innovating in the AR/VR space, it’s become more important than ever to understand the current trends, and where future growth might occur. With that in mind, let’s take a closer look at the patent landscape for VR and AR.

What is virtual reality and augmented reality?

Broadly, AR/VR refers to a class of technologies that either replace or enhance a real-world environment with virtual objects or an entirely simulated environment.

There are key differences between the various immersive technologies currently on the market:

• Virtual reality (VR) completely immerses its users in a virtual world. This is typically done through the use of a headset, and by displaying the virtual environment on a screen.
  • Some of the most popular VR headsets on the market today include Meta Quest, HTC Vive, and Playstation VR.
• Augmented reality (AR) layers virtual objects over the user’s physical environment, and is interactive in real time.
  • One of the best-known examples of AR is Niantic’s mobile game, Pokemon Go.
• Mixed reality (MR) allows real and virtual elements to interact with one another. In other words, the user can experience and manipulate both real and digital objects and environments.
  • As it is the most nascent type of immersive technology, practical use examples of MR are still limited. However, technologies in development include the Microsoft Hololens and Meta Orion.

For what it’s worth, you can often find differing opinions about whether a given device or experience should be considered AR, VR, or something else. Apple has apparently dispensed with these pre-existing categories; instead, they refer to the Vision Pro as a “spatial computer.”

An overview of VR and AR patent filings

US patent application filing data published by Vitek IP shows the number of AR and VR patent applications published in recent years.

A couple of high-level takeaways from their data:

• The number of patent filings steadily increased between 2010 and 2020
• There was a noticeable acceleration in patent filings from 2016-2020, but things have pretty much leveled out since then

This tells us that, although the commercialization of AR/VR technology is still in the works, the industry’s level of interest in the technology has sustained in the pandemic years and beyond.

The Vitek IP data only goes through mid-2023 ­— it will be interesting to see how those numbers pan out through 2024 and beyond.

What types of VR and AR technology are being patented?

To be patentable, AR/VR technology must meet the same criteria as any other invention — namely that it is useful, novel, non-obvious, and more than just an abstract idea.

The scope of AR/VR patents can span hardware, software, or a combination of both:

• Hardware: Display screens, user interfaces, head-mounted devices, multi-sensory technology, audio systems, etc.
• Software: Environments, applications, systems software, interaction models, etc.

That said, AR/VR technology is becoming increasingly dependent on software implementation. For those pursuing patent protection, it will be important to understand the patent eligibility requirements laid out in Section 101 and how that has been impacted by Alice.

Key trends in AR/VR technology

Although AR/VR is most often discussed in relation to entertainment and gaming, the technology is being developed for a wide range of industries — and these expanded applications are actually the primary drivers for today’s market interest in AR/VR.

The list is far from exhaustive, but let’s take a closer look at some of the key trends and applications for AR/VR technology in 2024.

Integrations with artificial intelligence

Artificial intelligence (AI) continues to be integral to AR/VR technology; it’s simply more efficient at performing tasks like scanning the environment.

Integrating AI into AR/VR technology is promising increasingly sophisticated applications that go beyond merely interpreting sensory data. Some possibilities for elevating user experience include:

• Constructing realistic 3D models that can be used as objects or avatars in the virtual space
• Detecting and labeling objects, allowing virtual objects to be placed over the real-world environment or vice versa
• Recognizing and translating text in real time

In short, integrating AI with AR/VR could offer more options for building interactive and immersive spaces that can quickly adapt to user preferences. These applications could benefit industries ranging from healthcare, to retail, to manufacturing, to automotive, and more.

Creation of AR avatars

AR avatars are digital representations of users or characters that can be superimposed onto the real world, and which can interact with the environment in real time.

In recent years, AR avatars have surged in popularity, particularly with the rise of virtual celebrities.

Aside from fulfilling a social function, AR avatars could also assist with marketing and customer service for businesses. In the near future, AR avatars could be incorporated into business processes for navigating physical stores, interacting with customers, and more.

Mobile augmented reality

While the first applications of mobile AR were for gaming (when Pokemon Go took the world by storm in the summer of 2016), mobile AR technology has since advanced to cover a wide range of critical tasks related to tracking, image recognition, and 3D rendering. As a result, mobile AR could now potentially perform business functions like remote assistance, employee training, product visualization, and more.

Key examples of mobile AR include:

• For Android devices, Google is developing ARCore
  • One key feature is Streetscape Geometry, which allows users to access the geometry of nearby buildings and terrain in order to deliver AR experiences that incorporate the real-world physical surroundings.
• For iOS devices, Apple is developing ARKit 6
  • ARKit 6 offers features like 4K video and LiDAR scanning in order to provide higher-quality visual experiences.

Wearable augmented reality

The market for wearables has evolved significantly in recent years. Wearables like the Apple Vision Pro are poised to offer users a mixed reality experience, where you can pull up a screen and use apps anywhere you want.

Top patent assignees for VR and AR technology

According to research by Vitek IP, the top ten assignees of VR and AR patents in 2023 were:

1. Magic Leap
2. Microsoft
3. Samsung
4. Google
5. Meta
6. Qualcomm
7. LG
8. IBM
9. Sony
10. BOE Tech

This list isn’t especially surprising; almost all of these are big tech companies that file large numbers of patent applications in a wide range of technologies every year.

Notably, the only company on the list that’s exclusively dedicated to AR/VR products is Magic Leap.

VR and AR patent filings by geography

According to research by Finnegan, the top seven jurisdictions for VR and AR patent filings in the fourth quarter of 2021 were:

1. China (1,164)
2. USA (725)
3. South Korea (261)
4. Great Britain (126)
5. Germany (125)
6. France (118)
7. Japan (115)

The list shows that VR and AR patents don’t significantly diverge from the top venues for patent filings worldwide, across technology sectors.

Funding opportunities for VR and AR technology

VR/AR technology is admittedly a high-risk venture, to the extent that its R&D process requires a large investment and few products have been profitably commercialized to date.

The technology’s risk level is reflected in how VR/AR-related investor funding has generally trended downwards since 2017, according to data compiled by Crunchbase.

To be fair, global venture funding numbers are down across the board (i.e. not only in the VR/AR industry), which means that current trends might simply be reflecting investors’ growing risk aversion in today’s unpredictable, post-pandemic economy.

That said, significant fundraising opportunities still exist. Successful efforts in recent years include:

• Scandit (which uses AR for its barcode-scanning technology) raised $150 million in its Series D round.
• Genies (which enables users to create avatar ecosystems) also raised $150 million in its Series C round.

Looking to break into the VR and AR markets?

With the AR/VR market set to continue growing exponentially, there will be many opportunities for innovative tech startups to get their foot in the door.

A successful IP strategy is a critical cornerstone for any high-tech business. If you’ve got valuable VR or AR technology on your hands, you’ll want to partner with an experienced patent attorney who can help you maximize the value of your IP.

At Henry Patent Law Firm, we’re passionate about helping innovative tech leaders take their businesses to the next level. Contact us now to find out how we can help!