CV1 - New Terms of Usage Still Block Commercial

[kevinw729]

I am not sure how many of you will remember the discussion that @CyberReality and myself had over the proposed new Terms of Service (TOS) which was posted – especially how he suggested that things may be changing and that the problems that Oculus had found in supporting the commercial entertainment scene would be addressed.

Well sadly the new TOS appeared (with no fan fair at all) and they seem to have reverted back to the blanket statement:

TOS [7/1/16]

“What Does This Warranty Not Cover? This Warranty is limited and not applicable to… unauthorized third-party item(s); (iii) use not in accordance with the Product documentation; (iv) commercial use; (v) use in connection with a trade, business or profession…”

https://www.oculus.com/en-us/terms/sale/

Obvious this is a blow, as these are the proposed TOS agreement terms that will cover the Rift (CV1) – though again we have to be mindful that Oculus has in the past changed passages without warning and possibly if pressured may place more thought into their commercial strategy in the face of the announcements from HTC and FOVE.

Obviously now that the truth is out I would love to hear from @CyberReality on this situation and what happened to impact his assumption that things were going to change?

Some of you may not see the relevance of the TOS issue – but regarding the usage of Rift’s in Cybercafes, and LAN sites as well as all the other aspects of out-of-home utilization, this agreement prohibits usage, and could place those breaking the terms into possible legal action. As has been seen with DK2 users that originally were promised they could use their DK2’s for commercial systems, only to have the rug pulled from under them when the company changed its position.

[sygel]

I'm not a lawyer, but it seems to me you will only void your warranty if you were to use it in a commercial setting. I think this is normal since that will put more stress on the device.

[kojack]

The part you quoted is part of the warranty. If you use a rift commercially, you don't get the 1 year (or 2 years in the EU) warranty period. It doesn't stop the rift from being used commercially.

The terms of sale say:

You may only purchase a Product for your personal use or to give as a gift unless expressly permitted in these Terms. You may not purchase Products from the Oculus website for commercial resale.

Now that's the bad part. The first sentence saying it's for our personal use (or as a gift) is making it difficult for developers. If you have a team of 10 people, you can't buy one rift for the team, each individual must purchase a personal rift to test their game. Or one member has to gift rifts to everybody.

Or something like that. I'm definitely not a lawyer, I have no idea (well, a slight idea) what I'm talking about. 🙂

The grey area that concerns me is education. The lines between commercial and non commercial can get blurred. According to the above rules, I can buy a CV1 for myself, but not for anybody else (like my students) to use. My college can't buy it's own CV1s because that wouldn't be personal use. If these terms of sale aren't changed, then educational use of rifts is banned, is that really what Oculus want? According to these terms, Oculus is now anti-education and anti-developer. Who's going to make the content if we aren't allowed to buy a rift for commercial use (ie. making content)?

Or whoever wrote the terms has no idea what the rift is. How about this part:

Please backup your data before sending the Product to us. We cannot guarantee that we will be able to repair the Product without risk to or loss of programs or data, and any replacement Product will not contain any of your data that was stored on the original Product.

Umm, the CV1 contains a hard drive? (Maybe that's the secret that's kept sdk 1.0 under nda) 😄 😄
Or this bit:

This limited Warranty continues for one (1) year from the date of purchase or delivery of the Product, whichever is later

How likely is it that people will receive a rift before they even purchase it? 🙂 (Other secret sdk 1.0 feature is time travel)

To summarise:
1 - Terms of sale: we can't buy it for commercial use.
2 - Warranty: we can't get it repaired/replaced for free if it was used commercially.
3 - No terms of service listed: so we can technically use it commercially, but we can't actually get it in the first place because of point 1.

Technically, this could be worked around a bit. The terms of sale allow you to gift the rift to someone else, but doesn't restrict what the giftee intends to do with it (only what the purchaser intends). So if a dev team can get somebody to gift them rifts, they are safe to use them commercially.

[kevinw729]

I understand that we are all not a legal representatives, and I am only representing the basics without going into details (have to do that for clients), but to correct you:

1. The Terms of sale are regarding the conditions of purchase, and so you can not buy for commercial useage

2. Buy the system and be found to be using commerciall breaks the above rules and opens the user to action

3. Using the system while breaking these TOS is a breach of the sale of usage and also infringes product terms (brand, usage, warranty) and opens the user to legal action

Don't feel bad about not being able to interpret all the nuances of these terms - some big companies have recently come cropper trying too and had to change their plans!!

The lack of written documentation may be a means to try and avoid later accusations (and legal challenge) - but plausible deniability is a failed business approach in many legal representatives eyes, especially as Oculus has yet to official stop anyone using their hardware in this purpose, and are associated with a number of projects... indirectly!

[kevinw729]

"kojack" wrote:
....Technically, this could be worked around a bit. The terms of sale allow you to gift the rift to someone else, but doesn't restrict what the giftee intends to do with it (only what the purchaser intends). So if a dev team can get somebody to gift them rifts, they are safe to use them commercially.

Technically @Kojack, I think you did a great job cutting to the meat of the issue. From the commerical representation standpoint - it seems OVR will treat this on a case by case basis - so if you are Paramount promoting The Martian, you get a quiet nod and some verbal support on technical problems, but if you are joe-some LaserTag site and you run a web page promoting your DK2 games room - you get a stern email from Facebook saying remove it now because you infringe brand, warranty and ToS!

What happens after June will be the $2b question!

...Oh and CyberReality, if you want to comment on that last suggestion on a change, that seems maybe to have not happened?

[cybereality]

To be honest, that was not my understanding of the plan (though I'm not a lawyer and not involved in legal decisions).

There are obviously commercial uses that would be allowed, for example if you run a game studio and are working on a commercial game, so some of the policy doesn't seem to make sense.

Though, on the warranty bit, that is understandable, as you can't expect to use the headset on 1,000's of people and then get a replacement if it breaks.

[kojack]

Unless Oculus are planning on some later (maybe with SDK 1.0) license for developers, explicitly saying the only accepted reasons for buying a rift are personal use and gifts is going to be troublesome.

[kevinw729]

First off, thanks for the reply @CyberReality - I know its hard.

Lets get the caveats out the way:
1- you and I are not legal (commercial law) representatives of any companies
2- I have contractual training but am not using it here (for obvious reasons)
3- you are retained by the company in question and will not comment on contentious issues
4- this is a VERY contentious issue!

Now that that is out the way, I think we all know that the issue being discussed is "can I use the HMD for commercial (pay to play) environments?" The whole issue about infringing commercial non-use by developers is a little bit of a red herring, and if its easier to play in this water than confront the main issue I get it (a bit of 3 and a bit of 4).

One correction to your statement: "...obviously commercial uses that would be allowed, for example if you run a game studio..." That would be treated as a development usage rather than a commercial, as you are not re-selling it but using the system as a means to develop, and in many cases the developer would purchase the system ex-works, rather than through retail.

I know this is an incredibly fluid situation and there are various voices inside OVR and FB that would like to see a better positioning of the commercial play status, more like Samsung and HTC stance and less of a stand-off-ish apporach currently employed. I also understand that certain executives are negative to the whole commercial entertainment situation and are 'unhappy' with the level of interest generated by the likes of myself and TheVOID, for example.

In conclusion, it seems that other than loophole dodging, OVR did not change the TOS or Warranty, and commercial application is still a closed door for the majority (and I will advise clients accordingly). This will obviously contradict promises made by some executives that things would change from DK2 too Rift/CV1 - and obviously this will sit badly with some. But hey, OVR is a consumer developer with a machine to get out the door, and what happens after this is obviously flexible... we hope!

Who knows after The VOID announcements next week at TED, and the announcement about the Chinese internet center deal with FOVE and HTC; OVR may have to man-up to stay relevant?

[Nekto2]

It may happen you would get special agreement when contacting directly?
But the price could be higher. You should think of plans to earn on software distribution, not on hardware.
So if you plan to use devices for education or special purpose, then company will not earn on those.
No one will buy games for those devices.

[kevinw729]

"Nekto2" wrote:
It may happen you would get special agreement when contacting directly?...
No one will buy games for those devices.

I think we can all agree that it is difficult for some to understand the different dimension regarding business for commercial entertainment applications. A number of companies and developers have recently come a cropper with regards the legality of commercial usage, and the sad level of ignorance regarding understanding infringement of license legislation in the States and Europe is showing.

The reality is that even though commercial entertainment application is on a very small scale of manufacture compared to the millions of units sold in consumer, the benefits of repeat revenue, and the scale of public investment means that current business models are being redrawn by some analysts after reconsidering the short term benefits of commercial investment in VR.

All that said – in the long run it’s a consumer business for long term revenue. But as with cinema and theme parks, living alongside video and video games – the ability for public-play is strong even now. And after missing the mainstream pricing goals, the consumer may be more ready to spend $40 at a time to experience VR than $1,500 in one go at this stage!!