AvatarsLegal Rights, Legal Wrongs

Monday 16th June 2008Dai Davis

Solicitor and Chartered EngineerPartner, Brooke North LLP

Avatars: Legal Rights, Legal Wrongs• What is an Avatar?• Electronic money• Civil disputes• Linden labs contract

– Data Protection– Jurisdiction

• Crime – old fashioned• Virtual crimes

What is an Avatar• Programmable interactive response• The Sims• World of Warcraft• Massive Multi-player Online Role Playing Games• The Cave• Second Life

– You own what you create– Electronic money (Linden dollars)

Electronic Money

• You own what you create– Or do you?– Not your Avatar

• Who makes the money? • Railroad building• 4 disputes

Increase in Size of Second Life

Peak Concurrent Users

User Hours in Second Life

US $ spent in Second Life

Total Lindex Volume

Positive Monthly Linden Dollar Flow - Turnover

Follow the Money• Transactions with Linden Labs

– Jurisdiction• Transactions with others

– Quality– Intellectual property– Harassment– Jurisdiction

Civil Disputes (1)• Do you know who you are dealing with?• Chinese property dispute• Stroker Serpentine (Kevin Alderman) (Eros LLC) -v-

Volkov Catteneo aka Aaron Long, Robert Leatherwood– Strokerz Toys– July 2007– Sex Gen Bed

• Crashing Sims allowed copying

Civil Disputes (2)• Can you force Linden Labs to tell you?• Robert Leatherwood of Texas, 19• Linden Labs stopped the “fault” allowing

copying• Is it worth it?

Civil Disputes (3)• Will Linden Labs help?• “We cannot verify, enforce, certify,

examine, uphold or adjudicate any oath, contract, deal, bargain or agreement made between Second Life Residents”

• Right but not obligation to resolve disputes

Civil Disputes (4)

• Eros LLC et al v Thomas Simon aka Rase Kenzo

• Copyright infringement – scripting• Various goods (including the bed!)• Settled - damages paid

Linden Labs Contract 1• “Currency” is not redeemable!• Currency is a “licence of rights”• We can interrupt , eliminate or change as we wish• You must use true information, but we don’t

guarantee that others do• You must be over 13 and under 18 for the “Teen

Area”, but we don’t guarantee that others are

Bragg -v- Linden Labs and Philip Rosedale

• Claimed confiscation of virtual land– Unfair trade practices– Conversion– Interference with contractual relationships– Breach of contract

• Pennsylvania court accepted jurisdiction• Arbitration unenforceable: no choice, non-mutual

Ailen Graef -v- U-Tube• Second Life persona: Anshe Chung• Millionaire (in second life)• Interview disturbed by flying objects• Repeated on U-tube• Sued for infringement of copyright in Avatar• Compliant withdrawn

Business Issues

• Trade Marks• Subject to instant removal• 1% • $2,000,000• Corporate image – IBM Guidelines

What is electronic money• Second Life

– You own what you create– Electronic money (Linden dollars)

• Do you really own anything?• Linden's Ondrejka and its CEO Philip Rosedale: agreement

"recognizes residents' right to retain full intellectual property protection for the digital content they create in Second Life, including avatar characters, clothing, scripts, textures, objects and designs."

Currency in Linden Labs Contract

• ~270 Linden dollars = $1• “Second Life "currency" is a limited

license right available for purchase or free distribution at Linden Lab's discretion, and is not redeemable for monetary value from Linden Lab”

Fraud and Linden Dollars• Payment fraud in the Linden Dollar exchange

– Phishing– “larger than large”, “gigantic”– Month of May 2007 “unprofitable”?

• “Raise fees on the Lindex in the coming months”• Currency fees will rise• Metacard

A Second Life Credit Card (1)• The Metacard• Launched in September 2007• Basic card gives you $5,000 Linden dollars• “Merchants” receive payment• No guarantee that First Meta will!• Do not receive high default rates

Crime – Ginko Bank• A pyramid selling scheme• Offering up to 60% annual return• Collapsed with 200,000,000 dollars• Value of $750,000• Now defunct• No enforcement BUT

banks now closed• Unfair Commercial Practices Directive (2005/29/EC)

Crime• What are the crimes

– Cyberbullying – “Griefing attack" — an attack of

unwanted, self-replicating objects, or scripts that push you around

– Virtual Rape– Virtual Death?

AvatarsLegal Rights, Legal Wrongs

Monday 16th June 2008Dai Davis

Solicitor and Chartered EngineerPartner, Brooke North LLP