Business in Virtual Worlds, Privacy and Protection, Second Life

Between a Rock and a Hard Place: Stroker v Linden Lab

Stroker Serpentine (Kevin Alderman) has brought a class action lawsuit against Linden Lab, claiming that the SexGen line of products have been “counterfeited, cloned, and ripped off countless times by a multitude of Second Life residents”. Alderman is joined in the suit by Shannon Grei who makes clothing for the virtual world.

The lawsuit hinges on whether Linden Lab is responsible for protecting the content of Second Life’s resident creators. According to a report by MediaPost:

Alderman and Grei argue in their court papers that Linden Labs should be held responsible for the knock-offs because the site allegedly allows users to upload fakes and sell them for Linden currency, and facilitates the exchange of Linden dollars for U.S. currency.

“Linden Lab has created in Second Life a system in which it directly engages in piracy, actively allows its users to engage in piracy by providing the tools for it, and by which it profits from its own piracy and the piracy of its users,” the lawsuit alleges. Alderman also alleges that some of the fakes are defective, which damages his goodwill.

The lawsuit thus covers a lot of ground. It would seem to argue that the Lab has a legal obligation to block the tools that allow piracy (copybot or simbot, for example) and that DMCA filings are insufficient forms of protection for content creators.

It would be nice to think that a lawsuit like this could have its day in court. The legal questions around the value of virtual goods, whether they are ‘property’ in the true sense of the word, the obligations of platform owners for the protection of those goods, and the boundaries provided by EULAs, terms of service and DMCA mechanisms are all issues that, some day at least, need to be put to….well, put to bed.

But the lawsuit puts the Lab in a bind. On the one hand, they may want to argue that they are the equivalent of an ISP, and that while their platform confers rights on individuals “posting” content, their obligations end at hosting and any additional protections are not obligatory. On the other hand, however, the Lab has business and policy issues at play: any sense that they are not serious about protecting virtual goods could be construed by current content creators as reason enough to give up hope that the Lab takes content protection seriously. But perhaps more strategically, it raises questions about whether ‘real world brands’ should ever return to a platform on which knock-offs and copybot can dilute their brand.

My guess is that the Lab settles out of court. Whether Alderman rejects an out-of-court settlement is another matter: there may be more than money at play here, an beyond just proving a point, this case has the opportunity to establish a principle.

(A full copy of the suit is available here).


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