Imagine an outraged citizen who sues the government for confiscating his property. Well that’s essentially what Marc Bragg was doing when he launched his lawsuit against Linden Research, the makers of Second Life for seizing his virtual property within Second Life.  In the US case of Marc Bragg vs Linden Research, Inc., No. 06-4925 (ED Pa. May 30, 2007), the court analyzed the Second Life Terms of Service (TOS), which is the online contract governing the relationship between Linden Research and its customers. Linden tried to use the TOS to force Bragg into binding arbitration in San Francisco. The court decided that the mandatory arbitration provision in the TOS were unenforceable against Bragg for the following reasons:

“Taken together, the lack of mutuality, the costs of arbitration, the forum selection clause, and the confidentiality provision that Linden unilaterally imposes through the TOS demonstrate that the arbitration clause is not designed to provide Second Life participants an effective means of resolving disputes with Linden. Rather, it is a one-sided means which tilts unfairly, in almost all situations, in Linden’s favor.”

Ironically, the success of Second Life counted against it: one of the factors that the court pointed to was the lack of any “reasonably available market alternatives” to Second Life, and particularly Linden’s unique policy of permitting customers to retain intellectual property rights in their virtual creations and other virtual assets.

Linden lost this round, but responded by amending their TOS to provide for a clearer, more flexible arbitration process which defused many of the court’s objections.  This should bolster the enforceability of the TOS in future disputes.  

Another lawsuit was filed last week in Federal Court in New York, claiming damages for copyright infringement, trade-mark infringement and passing off – all of which is alleged to be taking place within Second Life. 

For further information in this interesting area, see the following additional resources:

Blog: Our earlier post

Article: Eight questions to ask before doing business in a virtual world

Paper: Intellectual Property Rights In Virtual Environments: Considering The Rights Of Owners, Programmers And Virtual Avatars

 

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