Fighting fakes in a virtual world
More than 100 big name firms have a Second Life presence
Take a trip to an inner-city market stall and there's a good chances that you will be able to pick up a watch or a pair of sunglasses, being passed off as made by Rolex or Oakley.
The goods will invariably be cheap and, almost certainly, bootleg - or fake - versions of the real thing.
Now go on a shopping spree in the virtual world of Second Life - the 3D world populated by on-screen representations (avatars) of real life people, and you will see a similar phenomenon.
Here, the possessions don't physically exist. They are computer-generated adornments for your avatar, in the game.
But products like these are appearing - often without the permission of the brand owner.
Legal presence
The design of Second Life means that players, or rather residents, can make and sell goods in exchange for the world's currency, the Linden Dollar, which has an exchange rate with the US dollar.
Currently $1 will buy about 240 Linden Dollars.
And commerce is booming, with transactions worth about $1.5m in real money taking place every day.
Creating a virtual presence can be expensive
Firms are clamouring to get involved with more than 100 big brand names having a presence - from Coca-Cola and Microsoft to BMW and the fashion designer Jean-Paul Gautier - as well as thousands of smaller traders.
But when they do get on board, some are finding that their intellectual property (IP) - typically brands and content they own - are already there.
So perhaps it is inevitable that one of Second Life's newest residents is a UK law firm
Rip-offs
Inside the virtual world, visitors to the swish offices of Field Fisher Waterhouse see floor-to-ceiling glass windows, fish tanks built into the walls and can-meet representatives of the firm.
In part, it sees its arrival as another means of promoting the firm and attracting potential employees. And by hosting a real-world, real-time conference in its virtual office, attendees from around the world can participate, all at little cost.
But, says partner David Naylor, it is also positioning itself to drum up some business - advising on legal matters which crop up in the virtual world.
"Second Life's technology makes it as easy for users to create infringing contents and assets as it is to create original, non-infringing items."
SECOND LIFE FACTS
Registered users; 8.7m
Active users: 1.7m
Amount spent a day: $1.5m
Source: Linden Labs
"Often the people buying it won't be able to tell it is a rip-off and probably don't care. But the sellers are cashing in on the goodwill that has been built up in the real world by these brands for their own gain.
"It's a frontier-like environment and the economics of piracy-related activities are too compelling for some."
While nothing is certain in the rapidly developing environment of the virtual world, Mr Naylor feels it is inevitable that the situation will come to a head at some stage.
"Given the increasing amounts at stake, the real question might not be whether we see IP infringement-related actions brought in connection with virtual world activities, but how will they play out," he says.
Setting bad example
A Second Life resident himself, Mr Naylor's avatar is called Solomon Cortes, a dapper chap, whose wardrobe includes a smart suit he bought in-world to customise his appearance.
There is little to stop an offender creating another avatar - or character - and start infringing again
David Naylor, Field Fisher Waterhouse
While his clothes have come from "official" outlets, not all people who should know better are so scrupulous.
"There are some companies, even quite high profile ones, which have created virtual replicas of real world buildings or deck out their Second Life offices with designs, artwork and virtual furniture which are blatantly infringing copyright," he says.
"So when you consider that even they are doing it, it's no wonder there's a problem."
Second Life has about 8.7 million users worldwide - though only about 1.7 million have accounts used in the past three months.
Many regularly spend a few Linden Dollars on things which boost their enjoyment of the environment from trips to a casino to replica football kits.
Users can also buy vehicles as a means of travelling around Second Life.
These include cars, sold by dealerships set up by real-life motor firms. Other sellers flog unauthorised versions of the same cars.
David Naylor, aka Solomon Cortes, dresses to impress potential clients
Buying something branded without the authorisation of the company concerned not only means it misses out on revenue - but - Mr Naylor argues leaves them open to damaged reputation.
In the case of Mercedes, the firm has built a race track where users can test drive its latest models.
"They will have spent a lot of time and money on doing that," Mr Naylor says.
"If someone comes along with a fake Mercedes car which does not work well or looks like an old version of a vehicle, or underperforms against Mercedes own virtual cars, then you can see why the company might be unhappy."
Cinema sessions
As more businesses move in to the virtual environment, it is also becoming increasingly possible to buy real world goods from Second Life's virtual stores.
Dell, for example, allows users to customise a PC within the virtual world and have the real thing delivered to their doorstep.
"That this is happening makes protecting your brand in-world even more important," Mr Naylor argues.
Many firms already anxious about IP abuse in the virtual world are already facing the situation elsewhere on the internet.
While music and film companies battle against illegal downloading and the plethora of their copyrighted material on websites such as YouTube, Second Life is equally full of such content.
A visit to in-world cinemas will allow you to watch releases including the Latest Pirates of the Caribbean film to The Simpsons movie, while the bars play hits from Rhianna to the Rolling Stones.
However despite what seem to be legitimate legal concerns - and the presence of lawyers such as Mr Naylor - it is not always clear what action, can be taken. not least because avatars mean that real identities are kept secret
Companies are adding unusual features to their virtual offices
"Finding out who is behind illegal practices could be a drawn out process, potential requiring legal action forcing the identity of the perpetrators to be revealed," Mr Naylor adds.
"And even if successful, there is little to stop an offender creating another avatar - or character - and start infringing again."
Then there is the problem of establishing under which jurisdiction the offence is committed.
Is it in the country where the perpetrator is based? Or perhaps in San Francisco where the Linden Labs' servers are located?
Despite the difficulties, Mr Naylor feels that there will become a need for advice to be offered to those firms which choose to get involved in virtual worlds.
This could range from what rights you have over land in-world to the employment law implications of hiring another resident in your virtual business.
"There are definitely risks for firms which get involved in virtual worlds, but there also great opportunities too."
Sunday, August 19, 2007
Friday, August 10, 2007
Virtual sex lawsuit
Virtual sex software spawns lawsuit
TAMPA, Fla. - Kevin Alderman didn't bring sex to "Second Life." He just made it better.
The 46-year-old entrepreneur recognized four years ago that people would pay to equip their online selves — which start out with the smooth anatomy of a Barbie or Ken doll — with realistic genitalia and even more to add some sexy moves.
Business at Alderman's company Eros has been brisk. One of his creations, the SexGen Platinum, has gotten so popular that he's now had to hire lawyers to track down the flesh-and-blood person behind the online identity, or avatar, that he says illegally copied and sold it.
The $45 SexGen animates amorous avatars in erotic positions. It is software code, written in the scripting language of "Second Life" and placed in virtual furniture and other objects. Avatars click on the object and choose from a menu of animated sex acts.
Alderman filed a civil lawsuit in U.S. District Court in Tampa, Fla., last month alleging an avatar named "Volkov Catteneo" broke the program's copy protection and sold unauthorized copies. Alderman, who runs his business from home in a Tampa suburb, allows users to transfer his products, but prohibits copying.
"We confronted him about it and his basic response was, 'What are you going to do? Sue me?'" Alderman said. "I guess the mentality is that because you're an avatar ... that you are untouchable. The purpose of this suit is not only to protect our income and our product, but also to show, yes, you can be prosecuted and brought to justice."
Catherine Smith, director of marketing for "Second Life" creator Linden Lab, said she knew of no other real-world legal fight between two avatars.
However, Linden Labs itself has been sued more than once by subscribers over seizures of virtual property. In 2005, Japanese media reported that a Chinese exchange student was arrested for stealing virtual items from other players in an online game, "Lineage II."
"Second Life" isn't a game. There are no dragons to slay or other traditional game objectives. San Francisco-based Linden Lab describes it as "an online digital world imagined, created & owned by its residents."
Linden Lab provides a free basic avatar, a 3-D virtual representation of the user in male or female form. Everything else costs real money. A 16-acre virtual island costs $1,675 plus monthly maintenance fees of $295. Virtual money, called Lindens, can be exchanged with real dollars at an average rate of about 270 Lindens per $1.
Avatars can be equipped with flowing gowns and tiny tattoos, and users with programming and Photoshop skills can reshape themselves into a virtual Greta Garbo or just about any shape imaginable. With a little cash, users can also have people like Alderman transform the avatars for them.
At Alderman's "Second Life" shop, shoppers can try out a dragon bed powered by one of his SexGen engines. Along with programmers and designers, he employs a sales staff who hang around the shop like real salespeople to pitch the perfect sex toys. He is investing in a $25,000 motion-capture suit, a low-end version of one used to create digital characters in movies, to create more realistic sex moves for "Second Life" avatars.
As customers demand more real life in their "Second Life," though, these virtual creations can collide with reality.
"Virtually every aspect of real life is getting duplicated, and all the laws that can be applied to the real world are being applied in 'Second Life,'" said Jorge Contreras Jr., an intellectual-property attorney in Washington, D.C.
Last year, "Second Life" was rocked by a scandal over users who had modified their avatars to look like children and simulated pedophilia. Last month, Linden Lab shut down gambling in "Second Life" after concerns arose that virtual games of chance might violate U.S. gambling laws when members cashed in Lindens for real money.
Now comes Alderman's SexGen suit, which was filed July 3 and seeks unspecified damages. It accuses the unknown owner of the Catteneo avatar of violating copyright and trademark protections by copying, distributing and selling copies of Alderman's software.
Alderman's attorney, Francis X. Taney Jr. of Philadelphia, said the lawsuit has gotten a lot of attention because it involves sex, but is fundamentally about long-established law.
"It's a piece of software and software is copyrightable," Taney said. "It's also expressed in graphics, which also are copyrightable. There is some sizzle. People like to say it's really far out there, but at the end of the day I equate it to basic intellectual property principles."
Unlike many popular online worlds, such as "World of Warcraft," Linden Lab grants its users broad rights to create and sell content with few restrictions. Users can install copy protection and seek U.S. copyright and trademark protections, all of which Alderman did for the SexGen software.
"Whenever you create a situation where people are buying and selling things and potentially misappropriating them from their rightful owners, it is only a matter of time before the legal system gets called in," said Fred von Lohmann, a senior staff attorney at the Electronic Frontier Foundation in San Francisco. "This seems like a relatively straightforward case. It sounds like there is a real copyright issue."
Taney believes he knows who Catteneo is in real life, but is confirming it through subpoenas of records of eBay Inc.'s PayPal payment service as well as chat logs and trade history in "Second Life." He said Linden Lab and PayPal turned over their records, and he is preparing another round of subpoenas.
"We're proceeding carefully," Taney said. "This guy has claimed the information he gave to Linden was bogus. We are looking for ways to cross check and corroborate the information."
Catteneo, who did not respond to several interview requests sent through the "Second Life" messaging system, will likely have a hard time hiding.
"There is a whole lot less anonymity online than people think," von Lohmann said. "There are over 20,000 people who have been sued for downloading music. They may have felt anonymous, but they're weren't."
Alderman is unlikely to be the last to drag an avatar into court as the designers in "Second Life" try to protect their creations in the same way clothing designers such as Gucci try to eliminate realistic knockoffs
In recognition of the growing legal issues "Second Life" is likely to generate, the country of Portugal recently set up an arbitration center in the virtual world, though it has no power to enforce its decisions.
The legal issues may be similar offline and online, but von Lohmann said the trials could be a lot more interesting.
"In a virtual world, you have the ability to gather evidence you don't have in the real world," he said. "Everything that happens in 'Second Life' is reflected on computer servers. Depending on how long they keep the records, you could actually replay the event as it happens."
TAMPA, Fla. - Kevin Alderman didn't bring sex to "Second Life." He just made it better.
The 46-year-old entrepreneur recognized four years ago that people would pay to equip their online selves — which start out with the smooth anatomy of a Barbie or Ken doll — with realistic genitalia and even more to add some sexy moves.
Business at Alderman's company Eros has been brisk. One of his creations, the SexGen Platinum, has gotten so popular that he's now had to hire lawyers to track down the flesh-and-blood person behind the online identity, or avatar, that he says illegally copied and sold it.
The $45 SexGen animates amorous avatars in erotic positions. It is software code, written in the scripting language of "Second Life" and placed in virtual furniture and other objects. Avatars click on the object and choose from a menu of animated sex acts.
Alderman filed a civil lawsuit in U.S. District Court in Tampa, Fla., last month alleging an avatar named "Volkov Catteneo" broke the program's copy protection and sold unauthorized copies. Alderman, who runs his business from home in a Tampa suburb, allows users to transfer his products, but prohibits copying.
"We confronted him about it and his basic response was, 'What are you going to do? Sue me?'" Alderman said. "I guess the mentality is that because you're an avatar ... that you are untouchable. The purpose of this suit is not only to protect our income and our product, but also to show, yes, you can be prosecuted and brought to justice."
Catherine Smith, director of marketing for "Second Life" creator Linden Lab, said she knew of no other real-world legal fight between two avatars.
However, Linden Labs itself has been sued more than once by subscribers over seizures of virtual property. In 2005, Japanese media reported that a Chinese exchange student was arrested for stealing virtual items from other players in an online game, "Lineage II."
"Second Life" isn't a game. There are no dragons to slay or other traditional game objectives. San Francisco-based Linden Lab describes it as "an online digital world imagined, created & owned by its residents."
Linden Lab provides a free basic avatar, a 3-D virtual representation of the user in male or female form. Everything else costs real money. A 16-acre virtual island costs $1,675 plus monthly maintenance fees of $295. Virtual money, called Lindens, can be exchanged with real dollars at an average rate of about 270 Lindens per $1.
Avatars can be equipped with flowing gowns and tiny tattoos, and users with programming and Photoshop skills can reshape themselves into a virtual Greta Garbo or just about any shape imaginable. With a little cash, users can also have people like Alderman transform the avatars for them.
At Alderman's "Second Life" shop, shoppers can try out a dragon bed powered by one of his SexGen engines. Along with programmers and designers, he employs a sales staff who hang around the shop like real salespeople to pitch the perfect sex toys. He is investing in a $25,000 motion-capture suit, a low-end version of one used to create digital characters in movies, to create more realistic sex moves for "Second Life" avatars.
As customers demand more real life in their "Second Life," though, these virtual creations can collide with reality.
"Virtually every aspect of real life is getting duplicated, and all the laws that can be applied to the real world are being applied in 'Second Life,'" said Jorge Contreras Jr., an intellectual-property attorney in Washington, D.C.
Last year, "Second Life" was rocked by a scandal over users who had modified their avatars to look like children and simulated pedophilia. Last month, Linden Lab shut down gambling in "Second Life" after concerns arose that virtual games of chance might violate U.S. gambling laws when members cashed in Lindens for real money.
Now comes Alderman's SexGen suit, which was filed July 3 and seeks unspecified damages. It accuses the unknown owner of the Catteneo avatar of violating copyright and trademark protections by copying, distributing and selling copies of Alderman's software.
Alderman's attorney, Francis X. Taney Jr. of Philadelphia, said the lawsuit has gotten a lot of attention because it involves sex, but is fundamentally about long-established law.
"It's a piece of software and software is copyrightable," Taney said. "It's also expressed in graphics, which also are copyrightable. There is some sizzle. People like to say it's really far out there, but at the end of the day I equate it to basic intellectual property principles."
Unlike many popular online worlds, such as "World of Warcraft," Linden Lab grants its users broad rights to create and sell content with few restrictions. Users can install copy protection and seek U.S. copyright and trademark protections, all of which Alderman did for the SexGen software.
"Whenever you create a situation where people are buying and selling things and potentially misappropriating them from their rightful owners, it is only a matter of time before the legal system gets called in," said Fred von Lohmann, a senior staff attorney at the Electronic Frontier Foundation in San Francisco. "This seems like a relatively straightforward case. It sounds like there is a real copyright issue."
Taney believes he knows who Catteneo is in real life, but is confirming it through subpoenas of records of eBay Inc.'s PayPal payment service as well as chat logs and trade history in "Second Life." He said Linden Lab and PayPal turned over their records, and he is preparing another round of subpoenas.
"We're proceeding carefully," Taney said. "This guy has claimed the information he gave to Linden was bogus. We are looking for ways to cross check and corroborate the information."
Catteneo, who did not respond to several interview requests sent through the "Second Life" messaging system, will likely have a hard time hiding.
"There is a whole lot less anonymity online than people think," von Lohmann said. "There are over 20,000 people who have been sued for downloading music. They may have felt anonymous, but they're weren't."
Alderman is unlikely to be the last to drag an avatar into court as the designers in "Second Life" try to protect their creations in the same way clothing designers such as Gucci try to eliminate realistic knockoffs
In recognition of the growing legal issues "Second Life" is likely to generate, the country of Portugal recently set up an arbitration center in the virtual world, though it has no power to enforce its decisions.
The legal issues may be similar offline and online, but von Lohmann said the trials could be a lot more interesting.
"In a virtual world, you have the ability to gather evidence you don't have in the real world," he said. "Everything that happens in 'Second Life' is reflected on computer servers. Depending on how long they keep the records, you could actually replay the event as it happens."
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