Lawsuit Questions Whether Or Not Second Life Users Really 'Own' Their Virtual Land

from the ownership-society dept

For many, many years, we've discussed the problems of trying to apply real world laws to virtual worlds. The reason many real world laws are in place is to deal with the facts and limitations associated with the real world. But, when you move to a virtual world, where the actual physics (literally and figuratively) may be entirely different, real world laws might not make much sense. For example, if you "steal" a magic sword in a virtual world, is that theft? What if the point of the virtual world is to pillage and steal? Then things get troubling. Virtual worlds should be effectively separated entirely from real world laws, because the basic reasoning behind the real world laws doesn't apply in the virtual worlds -- and mixing the two only leads to problems down the road.

That's why, despite the cheering from many folks who we normally agree with, we were somewhat worried, back in 2003, when Second Life announced that it was letting people actually "own" their own virtual goods and land in Second Life. Those in favor of this seemed to think that this was better than Second Life making arbitrary decisions, but the downside was that it brought all the problems of copyright law into a virtual world where the very basis for copyright law didn't quite apply. Bringing the outside law into a virtual world just seemed like a dangerous precedent.

And, now, it looks like Second Life may be regretting that earlier decision. Apparently, it recently tried to move away from at least part of it, changing how the virtual "land" that people had bought was defined, so that it was no longer "property" owned by the users, but a "service" provided by the company, Linden Lab, that runs Second Life. In response, there's now a class action lawsuit against Linden Lab, suggesting there was some sort of bait-and-switch, in that people were told they were actually buying "property" that they would own, but with a single change to the terms of service, that property reverted back to Linden Lab. While I think the latter position is the only really legally defensible one for Linden Lab to take, it brought this on itself by thinking it should bring outside world laws of copyright and ownership into the virtual world in the first place...

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  1. icon
    GeneralEmergency (profile), May 11th, 2010 @ 9:04am

    Virtual Acts of God...

    Linden should have built a sufficient number of virtual spaceships to take all the inhabitants of the current virtual world to a new virtual world where the evil, but benevolent overlord "Lindengoth" owns all the property but will lease it to you for a reasonable sum. A forewarned virtual asteroid would have then destroyed the old planet and all who refused to move.

    reply to this | link to this | view in thread ]

  2. identicon
    Linden, May 11th, 2010 @ 9:04am


    reply to this | link to this | view in thread ]

  3. icon
    :Lobo Santo (profile), May 11th, 2010 @ 9:09am

    Re: Virtual Acts of God...

    Yeah, that would work.

    reply to this | link to this | view in thread ]

  4. icon
    P3T3R5ON (profile), May 11th, 2010 @ 9:13am

    Begs the question

    Here in the real world we own things, property, etc. so that when we are taxed on it we have paperwork to prove it's ours. So that when we sell it we have proof of ownership. Etc...

    But in the virtual world unless you are paying taxes or planning on selling your virtual items, proof that it is indeed yours shouldn't be necessary. Selling land was just a money maker for 2Life. The people who actually bought it should have known better. It's just like buying gold in other virtual world games, the owner of the game/eula can take it from you at will based on licensing etc. Your just the idiot who paid real world $ for virtual world objects that aren't anything more then 1's and 0's.

    Software developers update their EULA's all the time. 98.7% of us never read them and just accept. At any point they can just slip in the adjustment clause that says anything and everything your character owns is not actually his but property of the gaming company.

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, May 11th, 2010 @ 9:31am

    secondlife is trying to have it both ways. they 'sold land' at inflated prices because people thought there was some sort of value, and now they are trying to take the value away. the lawsuit not only has merit, but could prove very costly.

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, May 11th, 2010 @ 9:43am


    Which kinda raises the question:
    Why do people pay money for digital goods anyway?

    reply to this | link to this | view in thread ]

  7. identicon
    Anonymous Coward, May 11th, 2010 @ 9:47am

    Re: Re:

    it is the same logic why they are suppose to buy the artificial scarcities of cwf+rtb. it is entirely predicated on what people perceive for a moment, not any true long term value.

    reply to this | link to this | view in thread ]

  8. identicon
    Anonymous Coward, May 11th, 2010 @ 9:50am

    Re: Re:

    Especially music that "disappears" after you've purchased it because the music servers go offline.

    reply to this | link to this | view in thread ]

  9. identicon
    Anonymous Coward, May 11th, 2010 @ 9:53am

    Re: Re: Re:

    Digital goods have no long term value.

    reply to this | link to this | view in thread ]

  10. identicon
    Ryan, May 11th, 2010 @ 9:56am

    Re: Re: Re:

    Actually, the point of cwf+rtb is that the products offered are actual scarcities, such as limited quantity sold. That the producer could make more of them, or that a larger concert space could be constructed, etc. does not make the scarcity any less actual. Digital "scarcity", on the other hand, is completely artificial, subject to the whims of anybody that wants to copy it 400 billion times.

    reply to this | link to this | view in thread ]

  11. identicon
    Anonymous Coward, May 11th, 2010 @ 9:57am

    Re: Re: Re:

    I don't think you are supposed to make up artificial scarcities in the cwf+rtb model. I think you are supposed to try to sell the actual scarcities associated to the non-scarce good.

    reply to this | link to this | view in thread ]

  12. identicon
    Michael, May 11th, 2010 @ 10:18am

    Re: Begs the question

    This is not a traditional EULA change issue. When that happens, users that LICENSED the software with the original agreement are bound by that agreement. They may accept the new EULA, stop using the software, or (sometimes) continue to use the old version of the software they have under the old agreement.

    In this case, the developer SOLD something of value and then changed the thing they sold in a way that removed the value it previously had. In this particular case, they essentially took the ownership of that item back, but it ties in pretty well with the recent change to the PS3 that took away the "other OS" feature many users "purchased".

    reply to this | link to this | view in thread ]

  13. identicon
    Hoeppner, May 11th, 2010 @ 10:36am

    Re: Re: Re:

    Secondlife land does have "some" scarcities. Essentially they're running an old architecture where every SIM(256M by 256M) runs on it's own sever(even if the SIM isn't doing anything or has no people on it).

    reply to this | link to this | view in thread ]

  14. identicon
    bshock, May 11th, 2010 @ 11:22am

    is that the real question?

    I mean, seriously, is anyone still using Second Life?

    reply to this | link to this | view in thread ]

  15. identicon
    Anonymous Coward, May 11th, 2010 @ 11:25am

    Re: Re: Begs the question

    Except there is no item. The company "sold" strings of ones ans zeros on a hard drive. Their hard drive. Even if said strings were treated as property, the company is in no way obligated to store other people's property on their hardware.

    reply to this | link to this | view in thread ]

  16. identicon
    Anonymous Coward, May 11th, 2010 @ 11:59am

    The smarter way to setup the sales of virtual goods is as a rental rather than as property. You rent to gain the utility afforded but you don't own what you have rented and there is a built expiration date.

    I think the petitioners would be a lot less enthused about this lawsuit if the IRS viewed virtual property as real property. Be careful what you wish for.

    reply to this | link to this | view in thread ]

  17. identicon
    jm, May 11th, 2010 @ 12:33pm

    Even if a dodgy traversal of the legal system can be avoided it seems that the proximate 'losers' will be the Second Life members and the platform itself.

    The 'winners' are alternative, open source and SL content-compatible metaverse platforms such as OpenSim, and the worlds built using them.

    reply to this | link to this | view in thread ]

  18. identicon
    Anonymous Coward, May 11th, 2010 @ 2:03pm

    Re: Re: Re: Re:

    a limited run of hoodies or a special box set is an artificial scarcity as well, more can be produced. the scarcity is created by specifically limiting the amount of stuff. if secondlife created only 100 of something, it is no more or no less scarce than 100 hoodies. there is no difference.

    reply to this | link to this | view in thread ]

  19. icon
    The Groove Tiger (profile), May 11th, 2010 @ 2:35pm

    Re: Re: Re: Re: Re:

    Wrong, as each additional item (hood, special box set) costs an additional amount of resources (plastic, man hours, cardboard, shipping). So 100 items cost 100x these resources, and a million items cost one million times these resources.

    Any "pirate" that wants to "copy" them face two problems: 1) the actual ability to perfectly replicate the goods (which may not be possible for example for: autographed box sets) and 2) spending money on infrastructure and raw materials.

    None of this applies to digital goods, since duplicating an item goes like this: "copy a -> b"

    Since, for example, a music disc that has no additional value (reason to buy) except for the 0s and 1s it contains, it is not the plastic in the disc that the "infringers" want, it is the music, which can be copied endlessly at negligible cost.

    And that is why you fail economics forever.

    reply to this | link to this | view in thread ]

  20. identicon
    Anonymous Coward, May 11th, 2010 @ 4:01pm

    Re: Re: Re: Re: Re:

    The hoodies are not artificially scarce. They are always scarce since it costs you money, time and effort to produce them.

    Virtual hoodies are not scarce at all since I can make an "infinite" number of copies with virtually no effort or cost. Time is not a problem either since I can make enough copies to dress the entire second life universe in half the time it will take you to make a real one.

    Now, given these facts, the only way virtual hoodies can become scarce is if I artificially limit them by only making a limited amount available and by putting copying restrictions, so nobody can make more.

    Notice that "making a limited amount available" actually means that I am only willing to make a limited number of copies of those virtual hoodies, but I still need to make sure nobody can copy these goods, or else, my whole business goes down the crapper.

    reply to this | link to this | view in thread ]

  21. identicon
    Anonymous Coward, May 11th, 2010 @ 5:51pm

    Re: Re: Re: Begs the question

    doesnt matter. the strings of ones and zeros are the digital version of a condo. the condo board cannot randomly change the rules to repossess your bedroom, nor can the game company reclaim what they sold outright under terms in the past. there is potential to say that either they fraudulently sold it up front, failed to properly disclose terms in a manner which lead many people to think they were buying something forever, and so on. there is many angles on this, and very few of them look good for the company, i think.

    reply to this | link to this | view in thread ]

  22. icon
    taoareyou (profile), May 11th, 2010 @ 11:06pm

    Unless Second Life agreed to forever host their virtual properties on their servers, all Second Life has to do is make it so people can download whatever "code" they own. They can then stand by the claim that the customers still own their virtual property and proceed to host new property under the new rules.

    reply to this | link to this | view in thread ]

  23. identicon
    hmm, May 12th, 2010 @ 2:49am

    In the EU, if a EULA doesn't have any "NO I DON'T AGREE" option that lets you continue to use the product, then the changes to the EULA are null and void.
    This is because ALL contract changes MUST be agreed by both sides, and one side cannot withhold services until the other person agrees to a change.

    This basically strikes out all games that make you click AGREE after they patch the game/change the EULA and won't let you into the game otherwise.

    reply to this | link to this | view in thread ]

  24. identicon
    Samnatha Atkins, Mar 9th, 2011 @ 8:10am

    Linden Labs guarantees nothing at all

    Even as a service the SL model is severely broken. It says in the TOS that the user has no rights whatsoever to any consideration or compensation if LL loses their contents or data in whole or part. I would not deal with an IT provider under such a contract. To have such a clause in a virtual world, especially one where all content was created by the users, is the kiss of death.

    reply to this | link to this | view in thread ]

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