Xreal And Viture’s Ugly Legal Fight Shines A Negative Light On XR

Earlier this year, a German court granted Xreal a preliminary injunction against Viture related to birdbath optics used in the Viture Pro, temporarily restricting sales of that specific product in Germany. Xreal has cited the ruling as validation of its intellectual property claims. Viture, in turn, says the scope and implications of the injunction have been widely overstated, and that it is actively appealing the decision and challenging the patent’s validity.

From there, the dispute escalated. Xreal has filed a patent infringement lawsuit in Texas, targeting Viture’s US business. On paper, the case centers on intellectual property. In practice, it exposes a deeper tension inside the XR hardware market, one that raises questions about priorities, timing, and whether this dispute matters at all.

Xreal’s lawsuit arrives at a moment of apparent momentum. They recently announced a $100 million funding round, described by Xreal CEO Chi Xu in a Bloomberg interview last week as coming from supply chain partners and undisclosed investors, bringing total outside funding to roughly $433 million and pushing its valuation above $1 billion. At the same time, Xreal has emerged as a key early hardware partner for Google’s Android XR platform, with its Aura glasses positioned as one of Google’s first reference devices.

Android XR is Google’s most serious re-entry into head worn computing in years, and early partners stand to gain influence over software direction, developer attention, and platform perception. For Xreal, Aura represents a chance to graduate from niche accessory hardware into something more like true see-through AR glasses. After a brief hands-on demonstration, Road to VR’s Ben Lang said “Aura is the first clear look at the eventual convergence of AR and VR headsets. It feels like a full-fledged Android XR headset but in a much more compact package that will be way more portable and less conspicuous.” In an email responding to an earlier version of this story, Xreal insisted Aura is not a gaming device. So why attack your biggest competitor in the gaming segment if you’re leaving them behind?

“If we want to talk about the market in a broader sense, I don’t think this is going to be the last of these kinds of lawsuits, especially as more companies invent new technologies and seek ways to monetize them, whether through licensing or patent infringement lawsuits.” Said Anshel Sag, Principal Analyst, Smartphones, Wireless, PC, 5G & XR for Moor Insights and Strategy, in an email exchange with me about this story over the weekend.

Viture has gained real traction in the US gaming segment, where video display glasses have found a clear use case as private screens for handheld consoles and PCs. Devices like the Steam Deck, Switch, and ROG Ally have created a demand pocket that favors lightweight, plug in display glasses like Xreal’s and Viture’s. The latter has leaned into that reality and, according to IDC, is outperforming Xreal in the US gaming market. Xreal continues to be the largest selling globally. Viture also recently announced its own $100M round, which Sag believes is also a factor in this dispute. “Viture has done a good job of creating its own value proposition through software and unique form factors like the neckband.”

Xreal’s response has been market-oriented and legal. The company recently announced a Republic of Gamers branded headset with Asus, signaling a renewed push into gaming. That move acknowledges where demand actually exists today. It also places Xreal directly back into competition with Viture in a segment that neither company claims defines the future of XR.

Birdbath optics are a mature design choice. They enable relatively bright displays at reasonable cost, with tradeoffs in bulk and field of view. They are well suited for video viewing and as gaming accessories. They are poorly suited for all day wear, productivity, or spatial computing at scale. The industry has known this for years. Sag says he thinks Xreal is moving on from birdbath, and other writers who’ve seen the 70-degree field of view suggest the same.

“Project Aura has already been revealed, its not using the same triangular birdbath lenses as the past, it hasn’t been positioned as a gaming device, and its been demoed already and no one who’s seen it has said that,” Xreal said in its email. “Press have seen this and it’s been discussed that Aura uses the flat prism that’s more similar to XREAL One Pro (and Viture Beast) but not the same as the triangular birdbath.” Confused? Me, too. I’ve tried both Xreal Pro and Viture Beast and they feel like evolution, not revolution. In fairness I was not given an Aura demo by Google.

Over the past decade, Xreal itself has demonstrated the limits of this category. Despite multiple product generations and significant capital investment, video display glasses have remained niche. They have not become mainstream productivity tools. They have not replaced monitors. They have not driven mass consumer adoption. They’re accessories. If that is the case, then the strategic importance implied by aggressive IP enforcement is hard to justify. The dispute reads less like a fight over the future of XR and more like a battle for share inside a constrained market.

Xreal filed its patent case in Texas, a jurisdiction long favored in patent litigation for its plaintiff friendly reputation. Neither company is meaningfully based there in a way that makes Texas an obvious home for the dispute. Venue selection is a legal strategy to garner leverage and pressure a competitor, rather than a desire to resolve a foundational technical question.

Although Viture executives declined to comment on-the-record for this story, they did make a post on Reddit that stated: “We deeply respect intellectual property. IP exists to protect genuine innovation and to move an industry forward, not to be weaponized to create fear, confusion, or artificial barriers.” Viture further claims similar patents have have been rejected in China, and that Xreal’s patent adds only minor, appearance-level changes rather than true optical innovation.

“Unfortunately, the details are likely going to be fairly light until this case goes to trial and in front of a jury,” said Sag. “Additionally, while I agree that the Texas court tends to be a place where patent cases go to court, that only really applies to patent trolls and Xreal is far from a patent troll considering that it has so many products in-market.”

There is also historical irony. Xreal’s origin story includes prior litigation involving Magic Leap, where Chi worked before founding Xreal. That history complicates any attempt to frame the current lawsuit as purely principled IP defense rather than competitive positioning. Magic Leap’s lawsuit was dismissed in 2020 when it ran out of money and pivoted to enterprise.

If Android XR and Project Aura represent Xreal’s next act, one that moves beyond accessory display glasses toward a broader spatial platform, then this lawsuit feels like an ugly look at the legacy XR industry no-one needed to see.