I recently zeroed in on a clause in Second Life’s Terms of Service which, if enforced, renders all patents — even pre-existing ones — functionally worthless against Second Life infringers.

This comes via a presentation (.pdf) from Fernando Barrio, a Senior Lecturer at London Metropolitan University. I think you had to be there to follow the presentation (though the pictures are funny) but it pointed me to this excerpt from Second Life Terms of Service:

You also understand and agree that … you automatically grant … to Linden Lab and to all other users … a non-exclusive, worldwide, fully paid-up, transferable, irrevocable, royalty-free and perpetual License, under any and all patent rights you may have or obtain with respect to your Content.

You further agree that you will not make any claims against Linden Lab or against other users of the Service based on any allegations that any activities by either of the foregoing within the Service infringe your (or anyone else’s) patent rights.

Break that down. The first provision says that you agree that Linden Lab, as well as every user of Second Life, gets an automatic license to any patent you are granted on anything you invent in the virtual world. If this is enforced, then there is no reason to seek a patent on anything invented in Second Life. Millions of people and business, including Linden Lab, would have free licenses.

That’s a very big deal. A patent gives you the exclusive right to sell or license products that use your invention for a period of time (20 years in the US). Of all the IP rights companies hoard, patent rights are typically considered the most important. That is particularly true for technology companies, the very companies that could be creating genuinely innovative virtual world content, but largely aren’t. By making patents on virtual world inventions useless, Linden Lab makes innovation in the virtual world far less appealing.

The second provision says that by signing on to the service, you agree not to sue any other user, or Linden Lab, for infringing any of your patent rights for activity that takes place in Second Life. That’s a huge waiver.

How does it play out? Take a well known example — TiVo. TiVo has patents on a few of the cooler aspects of TiVo technology, which is one reason TiVo digital video recorders (DVRs) are easier to use, and more expensive, than the awful ones cable companies give away for free. If TiVo sees Second Life as a space it wants to move in to — let’s say to sell virtual DVRs with its patented features for people to watch television on in-world — it functionally can’t. Because by simply logging in, TiVo agrees not to sue anyone who rips off their previously patented inventions and sells them in Second Life, including Linden Lab. In fact, just by logging in to investigate possible infringement, users theoretically give up their right to bring a claim for any infringement they find.

I wonder if IBM got a side deal that voids this provision when it started holding meetings in Second Life, or if are they comfortable with the fact that they now have no ability to enforce any of their industry-leading 40,000 patents against Linden Lab or any Second Life user for in-world use.

It has always seemed odd to me that mainstream technology companies aren’t producing virtual-world products or innovating in the space, and that they generally don’t even have Second Life presences — this could be a big part of the reason why. If you were Steve Jobs, would you even log in to Second Life if it meant completely waiving Apple’s right to sue Linden Lab or any Second Life user for infringing any Apple patents in the virtual world? I suspect many professors, inventors, and CEOs have taken a pass on creating new technology in Second Life — and indeed, even visiting — for this very reason.

Given Linden Lab’s stated desire to allow users to protect their IP rights, this clause should be re-evaluated. Its elimination could only encourage innovation in the virtual world.

VB runs “Virtual Law Quicklinks” whenever we have a backlog of interesting items that aren’t big enough for full posts. One link, one sentence, a little commentary. Here’s today’s batch.

• Trademark Infringement in Second Life Noticed Again – Digital Urban joins the many voices singing the trademark infringement in Second Life song (originally a 2005 Tony Walsh hit, remixed by VB last spring). My prediction? Lawsuit in the summer of 2008 — though I suppose I waive any prognostication points if I file it.

• Identity 2.0 Defined – Solid fifteen-minute presentation (via Ouroborus) on identity, how it all gets tied together, and what user-based “Identity 2.0″ is going to look like. This informs the debate on identity verifiction in virtual worlds and is worth watching if you’re interested in the topic.

• New Paper on Online Dispute Resolution – Fairly basic, but this short paper (via SSRN) outlines how you could run an alternative dispute resolution program in Second Life, and covers some pitfalls; given that Linden Lab now says it will do binding non-appearance ADR for smaller claims against it, I see a real business opportunity here for somebody.

• $9,700 World of Warcraft Banhammer – The BBC tells us that a level 70 “night elf rogue called Zeuzo” (with l33t l00t) sold for about €7,000 ($9,700 US) and the account was banned within days. There’s so much wrong here… let’s just have a moment of silence for Zeuzo.

IMVU quietly joined Second Life in offering age verification to its members over the weekend.

The process appears similar to Second Life’s (users submit some information from government documents online and the information is instantly matched to the user’s previously-provided name in a third-party database). IMVU currently only offers the service to U.S. members via an automated process, but does also offer to verify international customers if they fax or mail a copy of a government document showing the name on the account and the age of the account holder.

From IMVU’s page on verification:

Sometimes it’s not always easy for adults to chat with other adults, safely. Now, for just $9.95, you can purchase an Age Verification Token and connect with IMVU’s growing community of adults! Every avatar verified to be age 18 or older will receive a special badge as proof, making it easy to find others who are just like you!

IMVU says that its (unnamed) third-party verification provider has a 90% success rate matching data provided over the internet. Members who cannot be verified electronically are, like international members, required to fax a copy of a government document to IMVU, or mail it to IMVU’s Palo Alto headquarters.

Commentary

On its surface, the purpose of verification appears to be to assure sellers of adult-oriented content that their customers are eighteen or over, and to assure people who use the service to make romantic connections that their partners are adults. Below the surface, there’s clear public relations value in the move, and verification provides some — though hardly complete — protection from lawsuits. In the event of a lawsuit, virtual world providers who deploy third-party age verification solutions can argue that blame and liability for errors should fall on the verification company, or on the user who gave fraudulent data to the verification company, rather than on the provider. Though they’ve not been made public, virtual world providers’ contracts with third-party verification companies likely include some form of an indemnification provision.

The problem with the legal argument, though, is that I’m not even sure what eventual lawsuit virtual world providers are supposedly protecting themselves against here — it isn’t like parents are lodging lawsuits in droves against internet porn companies who expose their little ones to adult images now, and they seem to be far higher-profile targets than virtual worlds. Moreover, any lawsuit against a verification company is obviously going to name the virtual world provider too, and getting two defendants to point fingers at each other is a plaintiff lawyer’s dream. From a legal perspective, the value of this move (which appears to be turning into a trend) seems incremental, at best.

Second Life’s ‘Aimee Weber’ (Alyssa LaRoche) recently became the first avatar with a registered trademark. The application for the registered mark was filed February 18, 2007 approved for publication July 7, and published for opposition August 14. According to ‘Weber,’ no opposition was filed, and she plans to immediately begin using the mark. In a sea of often silly metaverse firsts, this one could well signal a trend. ‘Weber’ runs a respected design studio in-world, has one of the most recognizable avatars in Second Life, and literally wrote the book on Second Life content creation. And now she gets to wear “TM” bling too.

A trademarked avatar, though novel, shouldn’t really be a surprise. McDonald’s trademarked Ronald, so there is no reason an avatar — for many users, a computer generated representation of their brand — could not also be trademarked. The rather distinct appearance of avatar ‘Aimee Weber’ is indisputably identified with the brand. And ‘Aimee Weber’ is as much a Second Life icon as she is a person you chat with at a virtual coffee shop or hire for design work; the little “TM” just makes that official.

One interesting legal angle here: the avatar, once trademarked, is basically locked into a persistent image, so VB hopes that ‘Weber’ is happy with her pigtails, butterfly wings, green tutu, zebra leggings, and stompy boots, because that’s what she’s stuck with as long as she wants to keep the mark.

VB caught up with the ‘Weber’ today for a short interview.

Virtually Blind: First off, why trademark your avatar? Some specific problem, or is it more a general move to protect your brand?

Aimee Weber: It’s a general move to protect my brand. We haven’t seen any problems yet, but prior to the trademark, we wouldn’t have been as well protected if somebody wanted to plaster my image all over an unrelated product.

VB: Do you plan to pursue people who infringe? If someone creates a new avatar that looks just like ‘Aimee Weber,’ should that person expect to hear from your lawyers?

AW: Well I think there are two levels to that question, one is my own personal concerns, which are pretty laid back. I don’t want to see my hard work co-opted by another company, but as far as I’m concerned any non-commercial reproduction of my avatar doesn’t bother me. I’m more flattered than anything. The other side of the coin is the general protection of the trademark. That may compel me to ask for the removal of stuff that doesn’t bother me so much. I’m not sure where that line is yet, but if there is one thing I learned from Anshe Chung’s DMCA spree is that I don’t want to piss off the community by being overly territorial.

VB: How closely do you identify with ‘Aimee Weber?’ Is it at all odd, knowing you can’t really alter your avatar’s appearance much now?

AW: Well I see Aimee Weber as a “character” and myself the creator of that character. Not that there is much difference between Aimee and myself! A whole lot of who I am gets channeled into this avatar. But I do see them as distinct. Aimee is the Dilbert to my Scott Adams.