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Back from vacation, and it’s been a big two weeks in virtual law. Some of these items deserve a longer write-up (and they’ll eventually get one) but there’s hot sun outside, cold Sauvignon Blanc in the refrigerator, and three episodes of Entourage on my DVR. So without further ado, here’s two weeks worth of virtual law updates in one big post.

  • Second Life creator Linden Lab filed its Answer and Counterclaims in the Bragg case (for the non-litigators who read VB, this is standard operating procedure in a lawsuit). It’s available as a PDF here. I’ve only skimmed it, but it doesn’t appear to contain any big surprises. One thing did stand out to me: Linden Lab is asking the Court to hold on to the proceeds of the sale of Bragg’s virtual land during the lawsuit. That looks like a smart move that helps them paint themselves as the good guys here, and really, to Linden Lab, this isn’t exactly about the money. It’s also interesting to me because you could argue it’s a tacit admission that there is real value in virtual land ownership. Should be interesting to see how that plays out. There’s a lengthy press release from Linden Lab about the Answer, available here.
  • In a good piece of international news for Linden Lab, it turns out French courts are saner than French parental watchdog groups. I was just in France, of course, and since I couldn’t help but notice that topless models grace the covers of Maxim-type magazines for sale at kiddie-eye-level on a number of Parisian street corners, this result seems more than reasonable. Familles de France LogoSomewhat oddly, however, Linden Lab says that the result “confirms that French law, and in particular the law of Confidence in the Digital Economy, should be applied to Second Life.” Did they just say that French law should be applied to Second Life? All of it? Yes they did. I hate to bang this drum again, but somebody in the legal department has got to start checking these things before they get posted; that looks like Exhibit 1 in a deposition somewhere down the road to me.
  • Along these same lines, Linden Lab issued a confusing press release about its casino and gambling advertising policy. Linden Lab acknowledges the existence of “casinos” for “gambling related activities” in Second Life without any qualification (while last time, you’ll recall, it was just “simulated casino activity”) and merely asks owners to “not advertise your Casinos in our classified section.” It then states that “those that have posted classifieds for businesses in Second Life where the posts are related to Casinos or other Gambling related activities will be removed by Linden Lab with no refunds given.” Wait, what will be removed, the ads themselves or “those that have posted” them? Oh, who cares. You’re all advertising “Kasinos” now anyway.
  • Something very interesting is about to happen: we’re going to find out whether Linden Lab will willingly comply with a subpoena for information about the real-life identity of a user. Kevin Alderman (aka ‘Stroker Serpentine’ in Second Life) is suing a John Doe (avatar ‘Volkov Catteneo’ in Second Life) for violating the copyright on Alderman’s popular Eros SexGen bed. Here’s a pdf of the complaint. Reuters covered this in a thorough piece that is worth your click if you’ve not read it already. SexGen Bed at SLBoutique.comAlderman is a fixture of the Second Life business community. His product is expensive (around $45 US), incredibly popular, and very press-friendly (it’s a piece of virtual furniture that contains sex animations for avatars). As such, this suit is likely to draw some mainstream press attention. Alderman’s attorney’s first move will be to subpoena documents that establish the real-life identity of alleged perpetrator ‘Volkov Catteneo’ from Linden Lab. ‘Catteneo’ claims to have no identifying information on file with Linden Lab (he actually told Reuters, “I’m not some kind of noob,” a comment which I see projected on a great big screen while he’s testifying if this ever goes to trial). “Noob” or not, I bet you a bag of Lindens that he’s got a traceable IP address or two, a PayPal account, and who knows what else Linden Lab keeps hidden in the darker corners of its servers. (And really, don’t you want to find out?) It will be interesting to see what happens when the subpoena hits, to say the least.
  • Coca Cola Pajamas at SLBoutique.comA handful of reports are floating around that Coca Cola is “releasing” its trademark in Second Life. Trust me on this one: it really isn’t. It might be choosing not to enforce the mark in certain contexts, but it’s not “releasing” (the legal term would be “abandoning”) the trademark in Second Life or anywhere else. It can’t “release” it without abandoning it actually, because trademark law is considered a matter of consumer protection in the U.S. One of the ramifications of that is that transferring a trademark requires transfer of the underlying product — which Coca Cola is pretty clearly not doing. In reality, what Coca Cola appears to be trying to do here is issue a free license to the trademark to allow it to be used in Second Life in a limited context. That it can do, but it has to monitor the quality of the goods being produced or it risks an abandonment argument. As a result, a trademark license usually includes provisions dealing with quality control, inspection, and monitoring. The best clarification I’ve seen so far is here (at the reBang weblog) which basically says that Coca Cola is going to exert some control over who makes what with the Coke logo on it in Second Life. While there’s undoubtedly been a breakdown in communication somewhere, it is good to see a big brand talk about working with potential infringers — arguably the smartest approach.
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8 Responses to “Update: Answer in Bragg Case; Victory in France; Casino Ad Policy (De)clarification; Sex Toy Copyright Suit; and Coca Cola’s Trademark in Second Life”

  1. on 08 Jul 2007 at 8:28 pmcsven

    wrt the Alderman case, the Federal judge ruled Friday(?) that they could issue subpoenas.

  2. on 08 Jul 2007 at 9:17 pmTony Walsh

    Welcome back and thanks for the update, Benjamin, I was looking forward to your commentary on the Coke situation.

    I can’t imagine how it could be worth the hassle to selectively issue licenses and worth the time to constantly monitor licensees. Seems more likely to cause problems in the community rather than build mindshare. If Coke’s not busting bootleggers [as I seem to remember reading somewhere], it’s more advantageous to bootleg than to get involved in licensing issues.

  3. on 09 Jul 2007 at 12:48 amNobody Fugazi

    There was a link to there – something about “Confidence in the Legal Economy” according to technorati.

    Not seeing it here. Interesting.

    What I do find interesting is that in the SexGen bed case apparently has a lot of people who haven’t actually read the filing on it – SPECIFICALLY the filing for trademark applications in the timeline of alleged abuse, as well as a lack of demonstration that it was a copy.

    I do hope you read that while you were over at…

  4. on 09 Jul 2007 at 1:43 amBenjamin Duranske

    Wow. Technorati is damn quick on the uptake. I dumped the link to the post (by Nobody Fugzai) about 10 minutes after I posted this piece because the link didn’t really work in context. I so doing, I violated a personal rule against editing for content after I’ve posted, and I short-changed Nobody Fugazi (who wrote a good piece on this) in the process. Sorry, Nobody – your post contains some good analysis, but when I re-read this post after I put it up, the link to your article just didn’t fit in context. I’ll also apologize to VB’s readers, who, I think, should be able to rely on posts not changing substantially once they’ve hit the bitstream. My bad.

    Here’s the link I cut: I encourage everybody to read this post if you’re interested in this issue, as it gets into the meat of the “French law applies here, seriously?” argument.

    As for the trademark registration issue, I wouldn’t read too much into that. You can trademark something without registering it, and the suit is focused on copyright infringement anyway. Regarding the possibility that it will be difficult or impossible to prove that the alleged infringing item was an actual bit-for-bit copy, that’s an interesting question, but there are ways around that in a copyright suit — in fact, proving actual copying isn’t necessary at all. I’ll cover all of this stuff at some point in the future if the case goes forward, but for now, the interesting question to me is what’s going to happen with the subpoena. Lawsuits like this move at the pace of glaciers, so there’s going to be lots of time to work out the details.

  5. on 09 Jul 2007 at 2:20 pmAshcroft Burnham

    The sex bed litigation is interesting: I read about that in The Times last week. I wonder the extent to which the plaintiff would have contented himself with a remedy that would see the defendant agree to cease selling the beds or be banned from sizable chunks of SecondLife, had it been available. One also wonders how many more cases that there are like this where the products are less valuable, and the victim of the infringement less wealthy, which are never pursued because of the enormous effort and expense required to pursue first-life litigation.

  6. [...] As VB predicted two weeks ago, Reuters is now reporting that the “John Doe” in the Eros litigation left a digital trail that ties his real-life identity to his Second Life avatar, and PayPal is going to provide his name in response to Eros’ subpoena. He’s not “some kind of n00b” or anything; it’s just a reality of moving money around now. In all but a very few cases, the perception of anonymity is false. Now that PayPal has, apparently, decided not to move to quash, it will be interesting to see what Linden Lab does with its subpoena. They got an extension, so we won’t find out until around August 3. Bookmark this post on: [...]

  7. [...] Uncontrolled growth; recently, Second Life has been crossed by sharp controversies. The lawsuits that involved Linden Lab and its users, like the famous-infamous Bragg-Linden Lab lawsuit, and the most recent case that is involving Linden Lab, PayPal and Kevin Adelman; the nowadays announcement made by Linden Lab about the turn of screw about wagering and gambling (as posted by Mamo here); the griefing attacks; the problems related to pornography in SL; and, finally, the problem of unofficial brands that actually are in SL. All these aspects converge in showing the problems connected to the anarchical growth of Second Life. To a certain degree, it looks like the time of Far West, with ineffective laws that don’t affect users’ behaviours. On the other side, firms should need to approach the problems, searching for the possibility of establishing points of strengts where others see just traps. The reaction to the presence of an unofficial brand should not necessarily lead to the ceasing and removing of the brand itself. K Zero states the existence of at least 5 possible behaviours, which range from ignoring to engaging. For example, Coca-Cola adopted the strategy of endorsement, issuing a free license to the trademark to allow it to be used in Second Life in a limited context, monitoring the quality of the goods being produced. In substance, Coca-Cola is working with potential infringers, turning them into in-world markeers of Coke brand. [...]

  8. [...] to be used in Second Life in a limited context, monitoring the quality of the goods being produced. In substance, Coca-Cola is working with potential infringers, turning them into in-world markeers of Coke [...]

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