In a virtual property first, Sweden’s Mindark, creator of the real cash economy-based game/virtual world Entropia Universe is, according to a post at Entropia Forum (which translates a Swedish article), creating wills to allow the inheritance of virtual property.  The article also discusses the tax situation regarding gains in Entropia. and notes, for what I believe is the very first time, that a revenue service is taxing virtual world activity (“since Spring”) under specific, implemented tax rules.

Regarding wills for transferring virtual property on death:

The company Mindark from Gothenburg will begin to draw up wills for their customers to cover the things they own in their virtual computer world.  It’s a natural development, says project manager Carl Uggla.

And regarding taxing profits made in virtual worlds:

The IRS [of Sweden] has since spring begun to tax the activities within online worlds. We’re not performing any bigger investigations. It’s more of a service and a way for us to be clear about the rules. I have got questions from several entrepreneurs who want to start activities in these worlds and about how they should go about it.  People want to do what’s right, says Dag Hardyson at the Swedish IRS.

Martina Bertilsson sees the IRS’s actions as the logical one.  It’s about validating this business sector, she says.  A lot of what happens online is still in a legislative gray area and open for pure legal interpretation, but there are now rules implemented regarding income tax for people living in Sweden, she says.

The SL Bar Association is offering a free California CLE seminar in Second Life Tuesday, September 9 at 12:00 Noon, Pacific, at the Association’s in-world headquarters (SLURL).  The seminar will focus on trademarks, and will be presented by SLBA President-Elect Stephen Wu (SL’s ‘Legal Writer’).

From the seminar description:

Three-dimensional virtual worlds such as Second Life are already being used for both business and pleasure, and their use in business, communications and e-commerce is projected to grow. Virtual worlds often provide users tools to create and market their own “in-world” content. Trademark infringement is rampant in Second Life. Mr. Wu will discuss the risks posed to trademark owners by widespread infringement, and how a failure to police their marks may cause them to lose their valuable trademark rights. He will also discuss the issues raised by trademark use and infringement in virtual worlds generally, including issues applicable to clients faced with infringement of their own trademarks and to those accused of infringing the trademarks of others.

About the presenter:

Stephen Wu is a partner in the Silicon Valley law firm Cooke Kobrick & Wu LLP, and is Secretary of the American Bar Association Section of Science and Technology Law. He advises clients concerning e-discovery, electronic records retention, digital evidence, and legal matters relating to information security, privacy, and ecommerce. His litigation practice also includes trademark infringement, other intellectual property, and general commercial litigation matters.

Linden Lab and a Second Life user known as avatar ‘Victor Vezina’ have been named in a Complaint (.pdf) filed in the U.S. District Court for the Northern District of New York by Second Life user Richard Minsky over alleged infringement of Minsky’s “SLART” trademark. The Complaint also personally names Second Life founder Philip Rosedale and former Linden Lab board Chair Mitch Kapor.  Minsky, an artist who uses the avatar name ‘ArtWorld Market’ in Second Life, alleges that ‘Vezina,’ by “using the name ‘SLART Garden’ for an [in-world] art gallery and ‘SLartists of Second Life’ as the name of a group” has infringed Minsky’s trademark.  Minsky also alleges that Linden Lab is liable for direct and contributory infringement, fraud, and tortious interference, and that Rosedale and Kapor are individually liable for fraud.  The counts against Linden Lab and its directors stem from Linden Lab’s hosting of the allegedly infringing content and alleged failure to remove it when it was brought to Linden Lab’s attention.

Regular readers will recall that Minsky’s application for the “SLART” trademark caused significant controversy in the SL artist community when it was approved earlier this year.  In an article for this site, trademark attorney Thayer Preece, a guest writer, then opined that “[i]n the end, this is a bad situation for people in the Second Life art community. Although the SLART trademark probably shouldn’t have been registered in the first place, it has been, and now people are faced with a choice of either losing the use of the word, or opening themselves up to potential lawsuits and account suspensions.”

‘Victor Vezina,’ the avatar at the heart of this controversy, has not been identified.  Presumably Minsky will seek to compel Linden Lab to provide him identifying information behind the ‘Vezina’ account.  The account’s Second Life profile describes the user behind the ‘Vezina’ avatar as an “aging rockr, into  writing, blogging, walking, talking, flickring, secondlifing, painting, photographing, surfing.”  Other fictitious defendants have been named as well, and could be added later if Minsky identifies other uses of “SLART.”

Minsky is representing himself in this action.  The case is complex, and there are a lot of hurdles to clear before this is resolved, including likely early motions from Linden Lab seeking to dismiss the case for improper venue (the Second Life Terms of Service require filing in California) and to dismiss the claims against Rosedale and Kapor.  These are not insurmountable problems, but they do involve tricky legal issues and may challenge someone without counsel, particularly as Minsky will be facing a team of trained attorneys representing Linden Lab.

Minsky has alleged:

• Direct and contributory trademark infringement Linden Lab;
• direct and contributory trademark dilution by Linden Lab;
• trademark infringement by the John Doe defendant known as ‘Victor Vezina’ and others;
• trademark dilution by the John Doe defendant known as ‘Victor Vezina’ and others;
• tortious interference by Linden Lab;
• fraud by Mitch Kapor;
• fraud by Philip Rosedale;
• and fraud by Linden Lab.

Please note that as with any lawsuit, these claims are merely that — claims.  They have not been tested and none of the defendants have yet formally responded.  This site will cover their response when it occurs.

By way of relief, Minsky seeks:

• A declaration that his trademarks have been infringed;
• an order compelling Linden Lab to remove unlicensed uses of “SLART” from Second Life and inform Minsky of the identities and locations of alleged infringers (including Victor Vezina and any other subsequently identified John Doe defendants);
• and $1000 per day from April 24 through the termination of the action for each act of alleged infringement.

The complaint sets forth Minsky’s story with rather more color than a typical complaint.  Substantial excerpts follow.

Read the rest of the post »

This week’s second installment of the Reading Room features an article co-authored by James Gatto, head of the IP Section at Pillsbury Winthrop Shaw Pittman, and Pillsbury IP associate Benjamin Esplin entitled Automated Program for Playing Virtual World Game Deemed Copyright Infringement (.pdf).  Readers will already be familiar with the case via this site’s extensive coverage MDY v. Blizzard, but this well-researched article concisely lays out the copyright issues in play and asks some important questions about the case’s long-term impact.  From Gatto and Esplin’s analysis:

Although the rulings here deal specifically with the use of third-party bot programs in conjunction with virtual world games, they may have implications for software disputes in other contexts, including cases involving issue of whether:

1. violation of EULA or TOU terms is a copyright infringement or breach of contract;

2. loading software from a hard drive to RAM constitutes “copying”;

3. technological measures to prevent access are circumvented in violation of the Digital Millennium Copyright Act; and

4. injunctive relief is available to preclude a copyright infringer from releasing the infringing code as “open source” software.

The site’s Reading Room is here to make virtual law papers and articles broadly available to the growing field of attorneys and scholars interested in virtual law. If you have an article you’d like to have hosted, drop me a note.