Gamers Rights Law

JUST AN IMPORTANT NOTE: Some of the linked articles, even though digitally blurred, may be NSFW.

Copy of the public record lawsuit, Eros v Linden Labs, may be found here.
I know to most followers of virtual worlds a lawsuit within Second Life is not news, it’s a huge world, and it is the most litigious by far of the MMOs. (Massivelly Multiplayer Online games)But this one is a class action by Eros, a company that already has two judgments against other in-game players.

Patent Arcade has a short note about the classification of the interests that are claimed for the lawsuit.
Just a little background; for those of you not familiar with Second Life and its litigious history, you may want to review Virtually Blind.  As a fundamental foundation,  the Terms of Service of Second Life give some limited copyright protection to innovators in its virtual world. Uniquely, the Second Life content is almost all user-created, and thus a climate for disagreement over ownership would and could often become a fact.

Well, on to the alleged facts of the case (and pack a lunch). Eros is a provider within Second Life of certain erotic articles for sale. The complaint lays out how the plaintiff alleges the Defendant, Linden Labs (administrator/owner) of Second Life is not protecting plaintiff’s property rights within the game. (Note in the above paragraph hos Second Life TOS does allow some limited property rights, in distinct contravention to most terms of service in MMOs.) The problem is best summarized in a quote from an incredibly on-point article about virtual worlds:, p. 416 “Where the provider does not enforce the contract against a breaching user, it falls to third-party users who have been harmed to attempt to enforce the breaching user’s agreement with the provider–a contract to which the harmed user is not a party due to the hub and spoke nature of multiple separate user agreements with a single provider.” Risch, Michael, Virtual Third Parties, Santa Clara Computer and High Technology Law Journal, Vol. 25, p. 415, 2009.

So the plaintiff, after having in the past sued its fellow players, has resorted to suing the actual service provider. Is this practical legal advice, or going after the “deep pockets”? Opinions vary.

Massively (Daily News About MMOs) has an indepth interview with the CEO of Eros in which he outlines the various prongs of the lawsuit. Filing in California, it uses certain California state law issues, as well as Lanham Act and Trademark Act infringement allegations. The key part of their allegations state “Despite Linden Lab’s actual knowledge of such widespread activity, it has taken no substantive action to prevent, limit, or prohibit such widespread infringement.”

Gameslaw also devotes a short section to the case. It notes as well that it is a further bringing of real-world law into the virtual world, and references an earlier case that first “pierced the veil” on anonymous game players. I agree with its assertion that the primary legal importance of this is its nature as a class-action against the world administrator, rather than an individual against individual case for infringement.

Metaverse Journal takes a conciliatory view and sides partially with Linden Labs. They quote CEO Alderman of Eros, LLC, as saying that Linden Labs is doing 1.2 million per day in virtual transactions. He states that the problem is systemic.

The last article outlining the case, ironically, is New World Notes, a newspaper within Second Life. According to their information, “previous to his career as a virtual adult content entrepreneur, as he relayed in a recent documentary, Kevin Alderman was a plumber. As Stroker Serpentine, however, according to MediaPost, he’s grossed over $1 million dollars in content sales.) Or to put it another way, if Linden Lab had not managed to develop a successful virtual economy, he would probably not have the money to sue Linden Lab. ”

Just a couple of random tidbits to keep you “in the loop” about the scope of such lawsuits:
Roughly 12 percent of Americans, or more than one in 10, have bought a virtual item at some point in the last 12 months, according to a new (July) study by analyst firm Frank N. Magid Associates and commissioned by virtual currency provider PlaySpan., according to Virtual Economies; and directly from Linden Labs: “Now at nearly USD$50 million each month in user-to-user transactions, the Second Life economy is on an annual run rate of more than a half billion US dollars,” from an article by Virtual World News.

This lawsuit should be of interest both from the class-action standpoint and from the virtual-goods standpoint. It will be focused on by legal scholars for years to come.

Jay Moffitt is a TN attorney. His statements do not constitute legal advice, and no attorney-client relationship is created. Jay Moffitt claims no certification in the subject matter, and TN does not offer a certification in the subject matter. Post copyright September 25, 2009.

Tags: class action, Eros, Linden Lab, MMOs