Follow the Money: Second Life Gets Sued — Jun 17th 2007

By James Marcus

As is often the case, Second Life has been in the news over the past week. The celebrated online community continues to gain traction with real-world businesses and advertisers, who are eager to cash in on the theoretical population of 7.2 million residents--many with deep (if virtual) pockets. In this piece from the Raleigh News & Observer, David Ranii runs down just a handful of these early adopters, including Reebok, Nissan, and Intel. He also quotes a 3-D Internet Champion (an actual job title) at IBM, who wants Big Blue to climb aboard the Second Life bandwagon as quickly as possible:


Where there's money, of course, there's eventually litigation. And according to Eric J. Sinrod's piece in Silicon.com, the ball has already gotten rolling. In a recent case, Bragg v. Linden, a plaintiff sued the website's proprietors--Linden Research and CEO Philip Rosedale--for confiscating a piece of virtual real estate he had bought, freezing his additional assets, and subsequently barring him from Second Life itself.

The plaintiff, Marc Bragg, began buying land in Second Life in 2005, and was diligently paying taxes (in real dollars!) on his properties. It was only in mid-2006 that a sour note crept in. As Sinrod puts it:


At this point the plaintiff sued Rosedale and Linden in a Pennsylvania federal court, accusing them of unfair trade practices, breach of contract, and various other shady maneuvers. Rosedale's initial argument--that the court had no personal jurisdiction over him--was batted aside by the judge, as were a number of other procedural wrangles. Meanwhile, there's also that "exploit" mentioned by Sinrod: Bragg seems to have acquired at least some of his virtual real estate empire at a deep discount by gaming Linden's online auction system. Whatever its merits, the case will now be decided in federal court, with obvious ramifications for the landed gentry of Second Life and any other pixelated paradise.

Sinrod, a partner at the San Francisco-based firm of Duane Morris, concludes his article with a brief speculation: "Perhaps at some point a virtual judiciary will be set up in a virtual world so that disputes can be decided by judge and jury avatars." Given my own experience rambling around Second Life (which I'll address in a future post), this would be some kind of judiciary, with lots of Goth accessories and the occasional bit of fornication in the jury box. Still, I wondered whether there was even a grain of seriousness to Sinrod's comment, and emailed him to ask. His response suggested that it was still early in the game to let Second Lifers pass judgment on their own: "While I believe that virtual disputes that are solely virtual could be adjudicated hypothetically in a virtual world, when one wants to seek recovery in the real world, I do not believe that a virtual world court would work."

Tags: ibm, litigation, marc bragg, philip rosedale, second life

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