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Protecting Your Property in Second Life:

Keeping the Shirt on Your Back


By Sigmund Leominster

There are two elements of the Second Life® virtual world that make it more than “just a game;”
the ability to create items and the ability to sell them. In fact, this forms the basis for a virtual
economy where goods are exchanged for monetary units – in this case, the Linden® dollar. And
since Linden dollars can be translated into real world cash, the notion of “only a game” becomes
much less tenable.

Despite the sometimes seemingly lawless nature of Second Life, the truth is that commercial
activities are subject to real world laws. This is particularly evident for people who create the
everyday virtual goods of Second Life; the shoes, the shirts, the chairs, the beds, the houses, and
all the prim-based artifacts that end up in other people’s inventories.

So it is only natural that when a designer puts many hours of work into making items that he or
she may expect something in return. Just like real life, the fruits of someone’s labor can be sold
on the open market, enabling them to re-invest and create more items. This is Economics 101.

However, other residents of Second Life think nothing of copying these artifacts and re-selling
them, and in doing so depriving the original creator of their income while simultaneously lining
their own pockets. What they create is generally referred to as Intellectual Property (IP).

Entrepreneurs who are new to the virtual world may not be immediately aware of the problem of
property theft but they can take some steps to make it easier to take action in the event that they
end up victims.

Lynda Roesch is an attorney with Dinsmore & Shohl LLP based in Cincinnati, Ohio and has
been practicing since 1979. She specializes in intellectual property and for the past two years has
worked with cases that involve the Second Life® virtual world. In general, she feels that the
legal distinction between the real world and virtual worlds is disappearing. “What’s real and
what’s not real – that’s not that easy to say. In Second Life it may not be a bricks and mortar
store but for someone experiencing Second Life, it’s a real experience.”

The comment that “it’s just a game” doesn’t hold water from a legal standpoint. As Lynda said,
“I hear people say you don’t have to worry about trademarks and copyrights because it’s just a
game – but it’s not just a game. If you go into it there’s a virtual currency exchange rate. That’s
clearly commerce. You can pay with your credit cards for some of the materials you buy in
Second Life. You can cross over and buy the real things in some of the stores. There’s a whole
set-up for businesses to operate. That’s not just a game: that’s commerce – that’s an economy.”
And like any real world business, a virtual world enterprise wants to protect itself from losses. So
let’s take a look at some of the basic protections that are already available – protections that
already exist in real life and that are applicable in the virtual environment.

Copyright
When someone created an item in the virtual world, it takes on what is referred to in the legal
world as a “tangible form.” Your newly created shirt exists as an identifiable object, even if it
only exists as a bundle of pixels in a virtual world. Provided the expression of those pixels can be
clearly identified as recognizable form, it is tangible. And once you have created a tangible item,
it becomes copyrighted.

The United States Copyright Office (USCO) says that “Copyright protects ‘original works of
authorship’ that are fixed in a tangible form of expression. The fixation need not be directly
perceptible so long as it may be communicated with the aid of a machine or device.”[1] And
copyright resides in the object whether you formally announce or register it. There are
advantages to formal registration but it is not obligatory.

What Does Copyright Allow You To Do?


Section 106 of the 1976 Copyright Act generally gives the owner of copyright the exclusive right
to do and to authorize others to do the following:

• Reproduce the work in copies or phonorecords;

• Prepare derivative works based upon the work;

• Distribute copies or phonorecords of the work to the public by sale or other transfer of
ownership, or by rental, lease, or lending;

• Perform the work publicly, in the case of literary, musical, dramatic, and choreographic works,
pantomimes, and motion pictures and other audiovisual works;

• Display the work publicly, in the case of literary, musical, dramatic, and choreographic works,
pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a
motion picture or other audiovisual work; and

• Perform sound recording work publicly by means of a digital audio transmission.

Point three is the one that most affects the Second Life entrepreneur – the right to distribute
copies for sale. Copyright is what protects your right to not only keep the shirt on your back but
sell copies of it to other people.

Trademarks
If your business uses a name, phrase, or logo to indicate that you are the creator of the goods or
services, then you have a trademark. If I create a range of T-shirts with the logo “Leominster
Apparel,” this acts as a trademark. Provided “Leominster Apparel” is not owned as a mark by
some other company, and suitably distinctive and/or fanciful, then I have protection. I can also
trademark a slogan, such as “Love Your Leominster™” but that too has to be distinctive. If I
then sell T-shirts marked with a tiny “Leominster Apparel™” on the front and “Love Your
Leominster™” splashed across the back, should someone else use them without my permission, I
have a case against them.

What Does A Trademark Allow You To Do?


Simply using the mark as part of your regular business is sufficient to claim it as a trademark, but
if you want to have some recourse to stop other folks from using it, you can register it. If you are
in the US, registering with the United States Trademark and Patents Office (USPTO) provides
the following protections:

• Constructive notice to the public of the registrant's claim of ownership of the mark;

• Legal presumption of the registrant's ownership of the mark and the registrant's exclusive right
to use the mark nationwide on or in connection with the goods and/or services listed in the
registration;

• Ability to bring an action concerning the mark in federal court;

• Use of the U.S registration as a basis to obtain registration in foreign countries; and

• Ability to file the U.S. registration with the U.S. Customs Service to prevent importation of
infringing foreign goods.

You are entitled to use the “TM” mark as soon as you start using the mark for business, but you
can only use the ® after you have had your registration approved – and that takes time and
money.

In the U.S., you can you can protect trademarks under federal, state and common law on the
basis of use alone, which means registration is not required, but you can choose to do so.

Patents
The third major type of IP is the patent. A patent is for an invention and granted, in the US, by
the US Patent and Trademark Office. Filing is essential for a patent to be assigned, and the
invention must be new and non-obvious. Before a patent can be allowed, there has to be an
investigation to make sure there is no current patent that is the same. This is the search for what
is known as “prior art.”

Patents are much harder to establish and prove, typically requiring intense development time and
interaction with patent attorneys. On the upside, patent protection can be very powerful when
enforced. The conferring of a patent gives the owner “the right to exclude others from making,
using, offering for sale, or selling the invention in the United States or importing the invention
into the United States.” Typically, what it really means is that the owner can license the use of
the invention to others and collect a royalty.

Software code can be patentable but this is becoming increasingly unpopular (see Ars Technica
for a starting point) and harder to register. But if you have a software process you use in Second
Life that could be considered patentable, you should contact an IP attorney to discuss the
possibilities. Be prepared – getting a patent is no stroll in the park.

One more comment from Lynda Roesch worth remembering: “Anything people sell is a piece of
property. They may be paying $2.00 or 20 cents but they are still paying money for the
experience of wearing that shirt in Second Life.”

And if the shirt on your back was created by you, you have rights.

Summary
Copyrights protect artistic, literary, and musical works

Trademarks protect brand names and designs which are applied to products or used in connection
with services

Patents protect inventions

References
United States Copyright Office: http://www.copyright.gov/

Unites States Patents and Trademarks Office: http://www.uspto.gov/index.html

© 2009, Sigmund Leominster