News: Epic Games Restarts Lawsuit vs. Nreal as Settlement Talks Collapse

One fight for augmented reality branding that we thought had been settled has suddenly turned into a full-fledged legal battle—again.

The combatants? Unreal Engine maker Epic Games versus the Chinese startup known as Nreal (aka Shenzhen Tairuo, formerly known as Hangzhou Tairuo, and parent company named Beijing Unicorn Technology). The stakes? Who gets to use the name "real" in reference to augmented reality products.

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Next Reality was the first to report on this fight back in 2019, when Epic Games filed a lawsuit against Nreal to stop it from using the Nreal name.

Epic's specific claim was: "'NREAL' and 'UNREAL' are highly similar from a visual perspective. The only difference in spelling—that the Applicant's Mark lacks a single vowel contained in Opposer's UNREAL Marks—does not sufficiently distinguish the appearance of the Applicant's Mark from that of Opposer's UNREAL Marks," read the filing from Epic Games.

Nreal's response—while legally logical in terms of strategy—bordered on the ridiculous. Nreal's legal team responded to Epic by stating: "Opposer's Epic Games marks are not well known or famous. The element 'UNREAL' in Opposer's marks is commercially weak and diluted, and therefore Opposer is not entitled to exclusive use of the term."

That all happened in January of 2019. Then, in November of the same year, the two companies entered settlement talks and it seemed that things might end amicably.

Well, a pandemic year later, and amid an AR market that is rapidly heating up, it seems those settlement talks have ended and the lawsuit is on again. On Monday, The Verge reported that Epic Games has filed a new legal action to prevent Nreal from using the name that it claims will cause consumer confusion in the AR space.

In the new lawsuit, Epic makes direct reference to the failed settlement talks: "Despite ongoing discussions surrounding Epic's concerns that Nreal's use of NREAL will cause consumer confusion, Nreal has persisted in its efforts to use NREAL in connection with its products. Protracted settlement talks have been fruitless, and Epic has no choice but to file this lawsuit," states the lawsuit document filed last week.

"Epic files this lawsuit to prevent newcomer Nreal from trading on Epic's industry-leading reputation in the developer community and extensive family of UNREAL trademarks," the statement continues. "Epic seeks this Court's assistance in obtaining an injunction to protect all consumers from being misled. Epic also requests damages to compensate Epic for the harm it has suffered, is suffering and will continue to suffer as a result of Nreal's infringement."

Although Nreal's AR smartglasses are available for purchase in parts of Asia and Europe, the device doesn't appear to be officially available to general consumers in the US. Epic's new lawsuit could present a significant hurdle toward Nreal ultimately realizing its US retail aspirations.