Class action lawsuit leveled against Second Life’s Linden Lab

strokerzKevin Alderman’s Eros LLC, a Florida company devoted to mature content which started operating in Second Life way back when, has been the star attraction before. Alderman, also known as Stroker Serpentine in Second Life, has been well-known for his successful, adult business ventures, as well as two successful legal actions for virtual environment based copyright/trademark infringement (one vs Rase Kenzo AKA Thomas Simon, and one vs Volkov Cattaneo AKA Robert Leatherwood).

Alderman, in conjunction with Shannon Grei (known as Munchflower Zaius in Second Life) is now launching a class-action lawsuit against Linden Lab itself, alleging that (among other things) it profits from negligence and delay in dealing with trademark and copyright infringement issues, and that it also knowingly does so.

The plaintiffs’ case for willful infringement might seem a bit weaker in spots, but one area where it is on relatively certain ground is where Linden Lab is duly informed, and then fails to act or acts with egregious delay. In those circumstances, the Lab would be aware of the infringement, but continues to profit from it (directly or indirectly) until action is taken.

The complaint outlines four classes who may benefit from the suit:

  • The Trademark Owner Class: All individuals and entities in the United States who own, have owned, or otherwise have the right to enforce licensing rights to goods and services bearing trademarks or service marks registered with the United States Patent and Trademark Office, and who engage or have engaged in commercial transactions in Second Life associated with such registered trademark or service marks.
  • The Trademark Infringement Class: All individuals and entities in the United States who (1) own, have owned, or otherwise have the right to enforce licensing rights to goods and services bearing trademarks or service marks registered with the United States Patent and Trademark Office, (2) engage or have engaged in commercial transactions in Second Life associated with such registered trademark or service marks, and (3) whose trademarks and/or service marks were infringed in Second Life.
  • The Copyright Owner Class: All individuals and entities in the United States who own, have owned, or otherwise have the right to enforce licensing rights in connection with a copyright registered with the U.S. Register of Copyrights and who engage or have engaged in commercial transactions in Second Life associated with such copyrighted works.
  • The Copyright Infringement Class: All individuals and entities in the United States who (1) own, have owned, or otherwise have the right to enforce licensing rights in connection with a copyright registered with the U.S. Register of Copyrights (2) engage or have engaged in commercial transactions in Second Life associated with such copyrighted works, and (3) whose copyrights were infringed in Second Life.

(Obviously, participation in the suit appears to be limited to entities within the United States of America. The 430KB complaint document is available in PDF format.)

Overall, the plaintiffs assert that Linden Lab has not done all that is reasonable and expeditious to deal with infringement, and that it has profited from and continues to profit from its failure to do so.

While so-called ‘Safe-Harbor’ (or, in the USA ‘Common Carrier’) protections might generally apply to (for example) Web-site operators, Linden Lab has chosen to abrogate those protections by taking affirmative (and some might say editorial) action on content in Second Life and on Xstreet SL.

Linden Lab declined to comment, but Alderman was willing to discuss the complaint with us, “The complaint eloquently expresses the frustration of the ‘whack-a-mole’ situation many of us are faced with every day. It is very difficult to convey the disappointment you get when you work for weeks to release something you have poured your heart and soul into, only to have it ripped and placed into grid-wide vending systems within moments by an anonymous and expendable account.”

“You cannot effectively address the level of infringement and theft that takes place within a platform that does 1.2 million dollars a day in transactions with an amended TOS and an expanded Abuse Reporting System. The problem is systemic. Our hope is to initiate fundamental and effectual change in the way the Lab addresses the issue of rampant content theft, copyright and trademark infringement in Second Life.”

Finally, Alderman asserts his support of the platform, “We do not need ‘Nannies’. We need effective support. If we didn’t believe in the future of Second Life, we would have been gone years ago. Maybe, some of our disillusioned brethren (sisteren?) will return if they feel that their content once again has value. We’re all in this together. It is still our world and our imagination.”

Even if the suit is only partially successful, the implications stand to significantly change the way virtual world developers and operators deal with rights, trademarks and copyrights in every collaborative virtual environment, as well as raise both social and legal expectations of the behavior and conduct of those operators. This case is one to watch.

Comments

  1. From Linden Lab's own Terms of 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.”

    I sympathize with Stroker and others who's products get copied by ways that allow a full reproduction. I make no compromise however based solely on the revenue they generate. Meaning, I don't think Stroker's case is any more important than someone who makes $1 linden a month. But while this case may throw RL copyright infringements at LL, the Terms of Service have clearly covered LL in such instances. And use of Second Life means agreeing to those terms. Stroker's lawyers must first show that LL's terms of service is illegal in its own right. And Stroker must come to the realization that his success in Second Life held great risk for such copying activities with little opportunity to protect his own intellectual property (IP).

    There is no case in my opinion that LL is at fault for “willful infringement” based on a “delay in dealing with trademark and copyright infringement issues”. Morally, LL might be viewed as having more responsibility in supporting its Users, but morality is a step above the law, and presents a choice of LL's actions, rather than a requirement.

    If Linden Labs feels that its sustainability rests on RL companies coming to Second Life, then I think the ToS would grant more power to the User and the Lab's ability to deal more effectively and quickly with such issues. But LL's income stream and business model isn't based on, or required by RL companies buying islands. It's based on private individuals and their transactions either directly to Linden Labs through tier or land sales, or indirectly. An “established” business within SL does not grant it power above the private user, nor does it change LL's liability and responsibility to act on patent infringements.

    There's also no pressure for LL to keep any of Stroker's creations within SL now that Stroker has broken these terms of service by filing the law suit. The alternative worlds such as OpenSim do an even worse job at IP protection. In fact, the default setting for a sim within OpenSim is to allow anyone to copy objects. I see no alternative for Stroker, other than joining with Linden Labs in helping to better define and improve the support of IP protection, rather than trying to dismantle Second Life or risk having your content deleted entirely.

  2. That clause refers to patent rights — which aren't a part of this suit. This is about trademarks and copyrights, and I'm not aware of any language in the ToS which explicitly or inclusively disallows claims about those.

    Additionally there are rights and remedies that no contract or agreement can waive — even if you signed and agreed to it. Exactly which rights and remedies fall into that category vary from jurisdiction to jurisdiction.

  3. @Tateru, how about this clause in section 3.2 which deals with license rights, forbearances and indemnification, to Linden Lab with regard to copyright and intellectual property rights:

    “you are solely responsible for, and Linden Lab will have no liability in connection with, the legal consequences of any actions or failures to act on your part while using the Service, including without limitation any legal consequences relating to your intellectual property rights”

  4. That's certainly closer — but it isn't that easy. I mean, if it were possible to actually legally sign away your obligations under the DMCA, most everyone would do it, from YouTube to Facebook.

    I consider clauses similar in construction to this a bit of a cheat actually. Many of them seek to reduce your rights and remedies, which they cannot technically do — but they can *functionally* do it if they convince you that they did.

    To knock up a quick example, you sign a contract that holds me blameless and to have no liability for harm to your person. Then I break your nose. Can you charge me with assault? Sure can. Can I be fined for causing you that injury, even though we have an agreement? Absolutely.

    Did you violate your contract with me? No.

    Because a clause that violates law has no force. It might influence our behavior by convincing us that we have no recourse, thus influencing us to inaction, but it doesn't hold water legally.

    With that specific clause in 3.2, it holds *some* water. The Lab disclaims liability for anything that it lawfully does or lawfully fails to do with respect to your copyrights and other intellectual property rights. And that's quite allowable.

    The question is if it has acted (or failed to act) in an unlawful manner according to USA's intellectual property laws — if it has, the clause has no force in that regard. Whether it has or not is for a court to decide — and that's what the court is for, ultimately.

  5. Tateru, your example would seem to hold water, save for one thing. Participating in Second Life is a lot like climbing into a boxing ring. There are risks *inherent* in such activities. Signing a contract that holds your opponent blameless in case he breaks your nose in such an instance is merely a way to protect yourself from civil liability. There is no criminal assault involved in boxing. So…there's no legal, criminal violation that's occurred.

    Go beyond that…because you're not entering into a contract with your opponent in that case. You're entering into a contract with the boxing *venue*.

    Apply that to Second Life. The very *nature* of both the server-side applications and the client is *designed* to allow copying to occur. It has to be that way. That's how data is transferred and interpolated from one machine to another.

    The permissions system can be seen as a way that LL has acted, and continues to act in good faith to protect the content of individual creators. If people violate that through exploits or hacks, you're going to have a tough time selling people the idea that such activity is the fault of LL.

  6. An excellent point, and well-made.

    I believe the core of the case, however, is not whether copying has taken place or not – or the feasibility of same, but whether Linden Lab has correctly complied with its legal obligations, once notified of infringement.

    That's the takeaway I get from the complaint document: The assertion that the Lab has failed to comply with the legal requirements from that key point in time.

    I can check with the plaintiffs' legal counsel about that, if anyone's interested.

    I think the Lab will essentially put the TOS on trial again (as they did previously) as a part of their defense. I'm not sure that will work any better this time around than last, however.

  7. My blog's done some reporting on this, but nothing as thorough as yours. I'm in the camp that tends to see this as a thinly-veiled power play from a few major content creators to try and squeeze out competition from smaller future-competitors.

    It's very similar to how AM Band radio managed to temporarily squeeze out FM Band through litigation.

  8. I know for a fact that Bimbo Cheerleader and SexGen content was stolen andsold for a discount by content thieves. Yet, what about Redgrave skins,whichwere stolen by Sex Gen Land managers and passed all around the grid and the Eros empire all spring andsummer. So much for the moral high ground. Publicity Stunt! We back Linden Lab. We support Second Life. We wont buy Eros crap (as IF we did anymore) whether they win or lose! Yay Linden lab! Boo Eros!

  9. Class action suit brough against Linden Lab seeking to hold it responsible for infringement of in-world items by its users

  10. My blog's done some reporting on this, but nothing as thorough as yours. I'm in the camp that tends to see this as a thinly-veiled power play from a few major content creators to try and squeeze out competition from smaller future-competitors.

    It's very similar to how AM Band radio managed to temporarily squeeze out FM Band through litigation.

  11. I know for a fact that Bimbo Cheerleader and SexGen content was stolen andsold for a discount by content thieves. Yet, what about Redgrave skins,whichwere stolen by Sex Gen Land managers and passed all around the grid and the Eros empire all spring andsummer. So much for the moral high ground. Publicity Stunt! We back Linden Lab. We support Second Life. We wont buy Eros crap (as IF we did anymore) whether they win or lose! Yay Linden lab! Boo Eros!

  12. Class action suit brough against Linden Lab seeking to hold it responsible for infringement of in-world items by its users

Trackbacks

  1. [...] I recently wrote two pieces on Eros LLC, Shannon Grei vs Linden Research Inc (AKA Linden Lab). One for Massively, and one for The Metaverse Journal. [...]

  2. [...] blog titled “Enough”. In a month where Linden Labs are apparently going to be sued in a Class Action for basically breaching their duty of care to content creators in Second Life, by allowing Thieves [...]

  3. [...] Notes, and there’s no shortage of comment around the SL blogosphere (like here, here and here). In such circumstances any opinion I care to offer is bound to be superfluous, as well as being [...]

  4. [...] The same episode of Future Tense also has a short interview with me on the media hype cycle with virtual worlds, their role in education and the precedents likely to be set by the pending class action against Linden Lab on intellectual property grounds. [...]

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