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WEEKLY NEWS - SEPTEMBER 15, 2008

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This article is part of MIP Week, a weekly email newsletter written by the editors of Managing IP magazine. Take a one week trial to Managing IP and find many more related articles.

Virtual worlds, real lawsuits

Stephen Mulrenan

Panellists at the AIPPI Congress last week discussed how to protect your IP rights in virtual worlds such as Second Life

Hiro Protagonist discovers the name of a new pseudo-narcotic, Snow Crash, offered at a posh Metaverse nightclub. Together with his friends and fellow hackers, he falls victim to Snow Crash's effects, which are apparently unique in that they are experienced in the Metaverse and also in the physical world.

So begins Snow Crash: a science fiction bestseller written by Neal Stephenson in 1992, which appeared on Time magazine's list of 100 all-time best English-language novels.

"Do yourself a favour and read Snow Crash," said Sun Microsystems' director of products and technology law David Marr at last week's AIPPI Congress workshop on trade mark and copyright issues in virtual worlds and online gaming.

"The virtual world offers not just a one-on-one experience, but an opportunity to grasp that surrounding Metaverse. It's collective, social and you can have spontaneous interactions and interruptions."

Based in Santa Clara, California, Marr practises open source law and is a proponent of the virtual world known as Second Life. "The virtual world is one of the few areas pushing next generation technology," he said. "And through open source programming, virtual worlds are now getting connected."

The Metaverse is a phrase coined by Stephenson as a successor to the internet and constitutes his vision of how a virtual reality-based internet might evolve in the near future. It is populated by user-controlled avatars as well as system daemons and resembles a massively-multiplayer online game (MMO), which is a video game capable of supporting hundreds or thousands of players simultaneously.

And with millions of online video gamers worldwide participating daily in MMOs, MMO developers and social network operators are seeking new revenue streams while advertisers and others adapt their business models to incorporate these growing markets. The emerging legal issues present new challenges to IP lawyers.

"There are many opportunities to create torts," said Marr. "For example with emergent gaming, which is not scripted, when you've killed all the dragons and done all the adventures what do you do then? The point is there is behaviour that is happening that can create real stress."

Case law in this area is unfolding all the time, and Meyer Lustenberger associate and fellow panellist Simon Holzer used his presentation to run through some recent developments.

For example, in Richard Minsky v Linden Research Inc et al, SLART magazine owner Richard Minsky filed a civil suit in a federal court earlier this year against the defendants for trade mark infringement, dilution, fraud and tortious interference (that is interference that causes injury).

Meanwhile on October 24 last year in Eros LLC et al v Thomas Simon, the plaintiffs filed a lawsuit against New Yorker Thomas Simon alleging that he sold unauthorised copies of virtual objects such as clothes and sex toys to other Second Life users. On December 3, the parties submitted a proposed judgment by consent with respect to Simon. And on January 3 this year, the judge entered the judgment which called for Simon to pay just $525 to the plaintiffs and enjoined him from further unauthorised copying.

Second Life adult-animation creator Eros was also involved in another case, Eros LLC v Robert Leatherwood, in which it alleged that Texan teen Robert Leatherwood sold unauthorised copies of the company's popular SexGen avatar-animation products.

A default judgment was entered against Leatherwood by the District Court for the Middle District of Florida last year. Leatherwood originally said he was not 'Catteneo' but later admitted that he controlled the 'Volkov Catteneo' avatar named in the suit. The case was interesting because, unlike in the US, a lot of jurisdictions do not allow lawsuits against anonymous defendants.

But while some large companies, such as Coca-Cola, have embraced Second Life by operating a free licences giving the right to use their trade marks in the virtual world (albeit in a limited context), smaller companies still need protection said Holzer.

"The trade marks of large companies like Coca-Cola and Nike are sufficiently famous in the virtual world as well as the real world," he said. "But protection is crucial for smaller manufacturers which can only claim protection for real world goods." 



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