IP and Virtual Worlds
MM 450
April 29, 2008
nothing has changed, everything has
changed
oh gosh, not again
 All laws are in place and best as we can tell, apply.
There are cases that indicate as much.
 Jurisdictional issues are as complex as IP law,
globalism, and the internet can make them.
 IP law is hardly the tip of the iceberg. Ownership of
every aspect and behaviors of every kind, not just IP
law issues, are at play and risk. What one "owns,"
"uses," and "does" in virtual spaces are all at issue. If
IP law is behind (new media), IP law in virtual
environments is even “behinder.”
 There are lawyers beginning to specialize in this
phase of IP law.
 There are content holders with interests. There have
been and will be cases.
Jurisdiction:0k, so whose law applies? Sigh.
 Traditional jurisdiction analysis applies; and in a global and
netted environment, clarity is not present.
 ICANN, and other such bodies have shown that SOME
international disputes can be moderated by extra-legal entities
 But who and what would get, potentially, hundreds of virtual world
owners to agree to outside control, by whom?
 The software is proprietary and very much of what controls is
contract law: Click wrap and shrink wrap agreements and terms
of service (TOS) trump a lot of IP law.
 We’ve seen how user agreements can modify other rights.
 Will open source take out TOS/contract aspect and revert
everything to in-place IP law?
 VWs have community agreements and sometimes even
enforcement mechanisms. These are extra legal, but suffice for
many resident disputes. However, not for all. And they are
outside the legal system so may not protect user rights properly.
 But, old media operated this way for years; and the internet still
does, in some ways.
Some sources for background on these issues:
 Anne Wells Branscomb (ed.) Journal of Computer-Mediated
Communication: “Emerging Law on the Electronic Frontier” Volume
2, Number 1: Part 1 of a Special Issue June, 1996.
 Especially:
 Part One: http://jcmc.indiana.edu/vol2/issue1/index.html
 David R. Johnson, Due Process and Cyberjurisdiction.
 Tamir Maltz, Customary Law & Power in Internet Communities.
 Juliet M. Oberding, A Separate Jurisdiction For Cyberspace?
 Part Two: http://jcmc.indiana.edu/vol2/issue2/index.html
 Niva Elkin-Koren, Public/Private and Copyright Reform in
Cyberspace.
 Post, David G., and David R. Johnson, (2006). "The Great
Debate--Law in Virtual World." First Monday. 11 (2)
http://www.firstmonday.org/issues/issue11_2/post/index.h
tml
Buffer/Ram “copies” and
reproduction rights
 As we just saw in 20th Century Fox v.Cablevision, if
buffer copies are "fixed," then they fall within the
reproduction rights of copyright holders and implicate
every sort of distribution of material.
 This is especially crucial in many virtual environments
where GOBS of what one sees/gets is held in cache
on each users’ machine. A re-interpretation of this
aspect (from "buffer doesn't count" to "everything in
RAM is a copy") would take us back to the most
draconian interpretation of the Green and White
Papers before the final drafting of the DMCA and
would put EVERYthing up for grabs, both about
ownership AND about terms of use (pay for click).
First Sale Doctrine and transmission
Principles in the First Sale Doctrine have been
deeply curtained by digital technologies.
After purchase, the law enables one to do about
whatever one wants with an analog media item.
Digital changes that as further transmission
constitutes dissemination/performance, controlled
by the Copyright Act and DMCA.
This is a crucial feature in virtual worlds as all
aspects are (to one degree or another) easily
reproducible, but constitute “everything” there is.
Let’s examine many of the issues via a look at
Second Life as example
 BTW: SL is an archetype because
It consists, primarily, of user-created content;
It’s neither quest, violence, nor level based, so is
less a game than on online environment;
It is exceedingly proprietary--at this point, it uses
neither a distributed computing model nor is it
open-source (though both are possible down the
road);
It has numerous policies specifically oriented
toward IP questions;
There is a developing set of cases/incidents.
Notwithstanding their good feelings and helpful
policies, they own it all
 Via their TOS <http://secondlife.com/corporate/tos.php>,
they note that they own it all (not only the goods, but the
account and your data) and that they grant use to qualified
users.
 3.3 Linden Lab retains ownership of the account and related data, regardless of
intellectual property rights you may have in content you create or otherwise own.
 You agree that even though you may retain certain copyright or other intellectual property rights
with respect to Content you create while using the Service, you do not own the account you use
to access the Service, nor do you own any data Linden Lab stores on Linden Lab servers
(including without limitation any data representing or embodying any or all of your Content).
Your intellectual property rights do not confer any rights of access to the Service or any rights to
data stored by or on behalf of Linden Lab.
 3.4 Linden Lab licenses its textures and environmental content to you for your use in
creating content in-world.
 During any period in which your Account is active and in good standing, Linden Lab gives you
permission to create still and/or moving media, for use only within the virtual world environment
of the Service ("in-world"), which use or include the "textures" and/or "environmental content"
that are both (a) created or owned by Linden Lab and (b) displayed by Linden Lab in-world.
Copyright policies seem helpful to users
 Via the TOS, they allow some rights back to users; yet they
limit other rights.
 They grant back full copyrights, except they retain full rights
to use everything in any way they want.
 Mostly, they refer to their needs to use stuff for promotion
(otherwise, they’d have to ask for permission every time they did
anything in support of SL. Since it’s almost all user created, they’d be
pretty tied up).
 They retain full rights to repurpose the content for their purposes.
 3.2 You retain copyright and other intellectual property rights with respect to Content you
create in Second Life, to the extent that you have such rights under applicable law. However,
you must make certain representations and warranties, and provide certain license rights,
forbearances and indemnification, to Linden Lab and to other users of Second Life.
 They also give residents advice as to how to protect their
copyrights<http://blog.secondlife.com/2008/04/11/protectin
g-your-copyrighted-content/>
 And provide full instructions about the DMCA notification and
takedown process
<http://secondlife.com/corporate/dmca.php>
They abrogate all patent rights and claims
(at least within SL)
You also understand and agree that by submitting your Content to any area of
the Service, you automatically grant (or you warrant that the owner of such
Content has expressly granted) to Linden Lab and to all other users of the
Service 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, to use your Content for all
purposes within the Service. 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.
Why? They philosophically oppose software patents that, in their view, stifle
innovation. They prefer “patent peace,” where everyone gets to use the
innovations.
https://support.secondlife.com/ics/support/default.asp?deptID=4417
(then click “legal questions/More info about Section 3.2 of the ToS and
patents)
What’s the problem?
 This illustrates how proprietary stuff can change the legal
playing field through TOS/contracts. Citizen’s rights often get
trumped in the fine print.
 Happens all the time in proprietary CMS (like BlackBoard) that
compromise educational activities.
 A central issue in the new media/digital environment. We’ve
seen that IP courts haven’t kept up; contract law is even further
behind.
 I wonder how many judges or lawyers read the TOS for every
website they visit? Each has one. Ignorance is no protection from
the law. . . Yada yada.
 In some ways the digital revolution may, in the long run, be even
more “bound up” by these contract issues than by trouble over IP
law itself.
LL recently put in a HUGE program over
their trademarks
 In effect, “everyone” was using almost all their
marks, in most cases, without permission. They
“pulled the who practice back” by invoking their
rights and introducing policies and programs for
“proper” usage.
 http://secondlife.com/corporate/brand/trademark/index.php
 Certainly the right thing to do, for them. But also
illustrates how proprietary software, and the virtual
worlds they create, are at the behest of the
owners/operators--who can change/fine tune the
rules at any time.
Streaming technologies are not really
very secure: To whit-- Copybot
 [the] libsecondlife project consists of a loose group of programmers that all have
the common goal of making an open source interface library for Second Life. . .
Some are hoping that once libsl is mature enough, it will even allow the
development of open source sims that can be hosted outside of Linden Labs, and
allow the official SL client to seamlessly connect from the Main Grid to these
alternative sims using a relatively simple proxy on the client machines.
 The project was fully sanctioned by SL/LL.
 In the pursuit of these varied goals, one of the things that libsl needs to be able to
do is fully decode the packets from SL that describe prims, textures, inventories
and all the assets. It also needs to be able to, as the official client does, enable the
creation of all of those.
 Somebody leaked, a youtube video of it in use was made, a copy of the code that
linked decoding and creating was submitted to our publicly accessible source code
repository, and someone outside of the team grabbed it, packaged it, and started
distributing…and the copybot incident was “on” and out of hand.
Streaming technologies are not really secure: Copybot
 There is no way to prevent this type of activity. If the official SL client
is able to display data for a particular account, then a bot logged in as
that account will be able to retrieve and use that data.
 Use of encryption or similar will not work, because the official SL client
must have a means of decrypting it, and if the official client can decode
it -- then that method can be reverse engineered out of it.
 Although copybot itself cannot make perfect copies of prims & textures,
that's more of a function of that fact that work on that particular areas
of SL had not started before November 2006.
 It is within the realm of possibility, that *ALL* content that a particular
account can access can be decoded, stored off-line, and recreated.
Including scripts, full downloads of textures, prim data, appearances,
the terrain/land/parcel data for a sim, *ANYTHING* that you can make
or upload using the official client -- if your account has permissions to
get information on it, then a bot could be made to download and
recreate it. This in fact is the goal of more then one member of the
libsecondlife project.
 Michael Cortez, AKA Static Sprocket, email Nov. 17, 2006 to Second Life
Educators listserve (SLED).
LL claims ISP safe harbor status and, on the one
hand, opts out of responsibility for protecting users’
stuff.
 1.2 Linden Lab is a service provider, which means, among other
things, that Linden Lab does not control various aspects of the
Service.
 You acknowledge that Linden Lab is a service provider that may
allow people to interact online regarding topics and content
chosen by users of the service, and that users can alter the
service environment on a real-time basis. Linden Lab generally
does not regulate the content of communications between users
or users' interactions with the Service. As a result, Linden Lab
has very limited control, if any, over the quality, safety, morality,
legality, truthfulness or accuracy of various aspects of the
Service. Though TOS “rules,” they maintain “community
standards” for behavior and enforce both TOS and CS.
But LL uses the TOS and Community Standards
as justifications for taking actions in relation to
users
 The Community Standards sets out six behaviors, the "Big Six", that
will result in suspension or, with repeated violations, expulsion from the
Second Life Community.
 http://secondlife.com/corporate/cs.php
 Welcome to Second Life! The following agreement (this "Agreement" or
the "Terms of Service") describes the terms on which Linden Research,
Inc. ("Linden Lab") offers you access to its services. This offer is
conditioned on your agreement to all of the terms and conditions
contained in the Terms of Service, including your compliance with the
policies and terms linked to (by way of the provided URLs) from this
Agreement. By using Second Life, you agree to these Terms of Service.
If you do not so agree, you should decline this agreement, in which
case you are prohibited from accessing or using Second Life.
 http://secondlife.com/corporate/tos.php
Some cases: Beginning to test this stuff
Bragg vs. Linden Lab (2006-2007)
 http://secondlife.typepad.com/second_life_lawsuit_bragg/second_life_lawsuit_pleading
s_with_the_court/index.html
 In which LL tossed Mr. Bragg and confiscated his virtual stuff for an alleged violation of
TOS.
 Mr. Bragg had found a way to leverage land sale auctions in SL to his advantage (isn’t
that what gamers do? Look for exploits toward more points?--but of course, in this
case, Lindens are negotiable currency).
 His virtual property was taken/revoked, at estimate of about 5G.
 Bragg used the TOS to claim that (a) it said the stuff was his and (b) LL’s inworld
adjudication procedures were inadequate.
 Filed in PA state court (10/4/06), moved to Federal court judge in PA. (Robreno)
(11/7/06). Robreno ruled (5/30/07) in favor of Bragg, virtually invalidated the TOS as
legally binding, and agreed that the LL procedures were inadequate.
 http://secondlife.reuters.com/stories/2007/05/31/judge-rules-against-one-sidedtos-in-bragg-lawsuit/
 He defined the TOS as an unenforceable “contract of adhesion,” so allowed the
case (Braggs’ claim that the TOS gave HIM ownership of his virtual stuff) to go
forward (LL had asked for dismissal). This ruling MIGHT invalidate virtually all
similar shrink/click wrap contracts
 He repeated his ruling on a second action (an LL motion to compel arbitration).
After which LL settled with Bragg (undisclosed
terms) and changed it’s TOS to refine ownership
claims… making clear that THEY OWN
EVERYTHING.
Eros, LLC et al v. Simon et al.: “Rase
Kenzo” case
 Six Major Second Life Content Creators Sue Alleged
Copyright Infringer in NY Federal District Court
 http://virtuallyblind.com/2007/10/27/content-creators-sue-rase-kenzo/
 Six major Second Life content creators have filed a lawsuit
in the Eastern District of New York claiming copyright and
trademark infringement against Second Life user Thomas
Simon of New York, who allegedly exploited a flaw in the
Second Life software to duplicate thousands of copies of the
creators’ products.
 Simon settled for about $600.00 (he initially turned down on
offered settlement that would have cost 10X that much).
 http://www.patentarcade.com/2008/04/case-eros-v-simon-settled-2007-second.html
Eros LLC v John Doe:
further adventures of the
Sex Gen Bed
 (July, 07)In “Eros LLC vs John Doe,” filed in the U.S. District
Court in Tampa, Alderman accuses Catteneo (SL name) of
illicitly copying and selling the SexGen bed for as little as
L$4,000, sharply cutting into Eros’ sales.
 In September 6, 2007 a motion to subpoena AT&T and Charter
Communications for the RL identity of Catteneo was granted.
Alderman made similar requests of LL and PayPal.
 A default judgment was entered against Leatherwood by the
District Court for the Middle District of Florida as he denied
being Catteneo and did not “show” for hearings.
 By March, 2008, 19 year old Texan Robert Leatherwood (who
had earlier denied being Catteneo) admitted owning the account
and settled with Eros, terms not announced, but thought to be
agreement to C&D.