January 5th, 2008 by Benjamin Duranske
I’ve had this in my in-box for a few days, and I just haven’t been able to figure out what to do with it. On one hand, the core of the announcement is pretty cool: a real life lawyer from Mexico City, Jorge Martinez Silva (as Second Life avatar ‘Deco Straff’) has been hired by a Second Life media company that looks like it has real potential. On the other hand hand, the release highlights a troubling issue that attorneys may want to watch out for when practicing in virtual worlds.
From the press release:
MetaNetwork Media, Inc., (symbol: MNM) announced the hiring of its legal counsel, The MetaLegal Firm, which is the Second Life practice of Deco Straff of the Mexican legal firm Rodriguez Davalos Associados, S.C. of Mexico City. Deco Straaf (Jorge Martinez Silva in real life) will serve as the primary counsel for the Second Life broadcasting company.
“This is an important step for MNM because of our long-term goals as a company, which includes growing our company into real life,” said Cadence Juran, MNM CEO. “Deco and his U.S. colleagues provide us guidance on our incorporation, our IPO and protection of our intellectual property in both SL and RL,” Juran said.
As an initial matter, I want to congratulate Silva for this neat bit of representation. MetaNetwork Media looks like an interesting project, and it is great to see virtual world-based companies starting to seek the help of attorneys with virtual world experience.
Unfortunately, much of the rest of the press release is devoted to other aspects of MetaNetwork Media, Inc.’s business dealings — including the aforementioned “IPO” in Second Life — and that causes some concern.
The sale of securities in Second Life raises the same issues for me that it always does. This particular “stock” trades on the “Second Life Capital Exchange.” This virtual stock exchange, like most others, strongly disclaims any real world implications, and claims, basically, to be “only a game.” However, the stock is available as part of an “Initial Public Offering” at $5L per share (roughly $0.02) and Lindens are readily convertible to real-world cash. As such, there are — as there are with every in-world company purporting to offer securities — serious questions regarding the legality of the offering.
This happens all the time in Second Life, of course; there are dozens, if not hundreds, of virtual world-based companies who have offered or are currently offering stock. Here, however, the press release comes with at least the appearance of approval of Silva’s firm, and that gives me some pause.
VB encourages attorneys who are practicing in this fascinating new area to keep in mind that while independent actions taken by in-world clients will not generally expose you to professional liability or raise ethics concerns, in situations where press releases are involved, it may be a good idea to take steps to avoid being depicted as endorsing legally questionable activity.
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