July 9, 2007 by Nic Mitham
Coca-Cola, trademarks and brand advocacy. A story that has gained much coverage in recent weeks is the case involving Coca-Cola and a well-known Second Life content creator, Vint Falken.
The story relates to a Coke-themed outfit made by Vint. There’s been much discussion about the use of registered trademarks on an unauthorised basis - this being the most prominent to date. The outfit, available to buy in SL, was also promoted on SLexhange (a website for retailer in SL). The outfit was originally removed from this website in light of trademark infringement (apparently a decision made by SLexchange, not Coca-Cola). Then, SLexchange released the following:
‘We have spoken to Coca-Cola and they have released their trademark to SL Merchants. Therefore, any of your items that were disabled on June 7, 2007 have been retrieved.’
Quite a turn-around.
So, is this a sign that real-world brands are simply giving up trying to police their brands in virtual worlds? Not at all. There’s a far more strategic reason for adopting this strategy. The reason behind Coke’s decision was originally explained in the K Zero Luxury Brands case study back in March 2007. Here is an extract from this case study.
One critical factor to be considered by brand owners is the fact that their products probably already exist in Second Life.
A key characteristic residing within large numbers of Second Life residents is the high degree of brand advocacy. Explore a little into Second Life and you will find virtual shops selling unofficial but high quality versions of brands and products. These people in some some cases are generating revenue streams from this activity.
On the one hand, this activity is potential illegal but for now loosely explainable by the terms and conditions of the Linden Lab IP clause - all content is the property of its owner.
A more proactive approach here is to remember that the majority of residents doing this do not make a living out of it - they do it in the first place for their love of the brand. This has to be leveraged.
Embrace these people, get them involved in your brands and let them continue to be brand ambassadors, in an official way.
This is a smart move from Coca-Cola. They’ve realised that allowing residents to work with their brand will yield far greater opportunities than if they prevented brand usage. Coke works hard to leverage their brand in the real world and are now opening up the options for their brand to be extended virtually - an importantly - by other people. In a way, this is user-generated NPD.
Monday, December 8, 2008
Herman Miller Fights Trademark Infringement in Second Life with “Get Real” Campaign
October 8th, 2007 by Benjamin Duranske
Virtual World News alerted me to this story: Herman Miller (who makes the best, albeit most expensive, chairs in the world) is fighting knock-offs in Second Life by giving away the real thing. Well, the virtual real thing. But not a knockoff. You get the idea.
From the VWN article:
Furniture designer and manufacturer Herman Miller announced that it would be entering Second Life with help from Rivers Run Red. In the real world, Herman Miller has taken aim at knockoff products with its “Get Real” campaign, and it will be bringing the same principle to the virtual world.
It will be offering a collection of 15 pieces for L$300-L$850, or approximately U.S. $1.40 to $3.50, but users that have bought knockoffs in the past will get the new pieces for free. … Those taking advantage of this limited-time, honor-based offer need only delete their old inventory and then “Get Real.”
And from Herman Miller’s in-world advertisement:
Herman Miller is pleased to give you the opportunity to own authentic virtual versions of some of our products. Each is designed to represent as closely as possible its real-world counterpart
This means three things to me. First, big companies are now — finally — starting to pay attention to trademark abuse in Second Life. Second, some of them, like Herman Miller, are going about it the right way, embracing the virtual world and trying to deal with the problem creatively. And third, my Second Life avatar ‘Benjamin Noble’ has a nicer chair than I do right now. A L$500 sixty-three prim chair, but a nicer chair nonetheless. And yeah, I paid for it.
Virtual World News alerted me to this story: Herman Miller (who makes the best, albeit most expensive, chairs in the world) is fighting knock-offs in Second Life by giving away the real thing. Well, the virtual real thing. But not a knockoff. You get the idea.
From the VWN article:
Furniture designer and manufacturer Herman Miller announced that it would be entering Second Life with help from Rivers Run Red. In the real world, Herman Miller has taken aim at knockoff products with its “Get Real” campaign, and it will be bringing the same principle to the virtual world.
It will be offering a collection of 15 pieces for L$300-L$850, or approximately U.S. $1.40 to $3.50, but users that have bought knockoffs in the past will get the new pieces for free. … Those taking advantage of this limited-time, honor-based offer need only delete their old inventory and then “Get Real.”
And from Herman Miller’s in-world advertisement:
Herman Miller is pleased to give you the opportunity to own authentic virtual versions of some of our products. Each is designed to represent as closely as possible its real-world counterpart
This means three things to me. First, big companies are now — finally — starting to pay attention to trademark abuse in Second Life. Second, some of them, like Herman Miller, are going about it the right way, embracing the virtual world and trying to deal with the problem creatively. And third, my Second Life avatar ‘Benjamin Noble’ has a nicer chair than I do right now. A L$500 sixty-three prim chair, but a nicer chair nonetheless. And yeah, I paid for it.
Thursday, November 13, 2008
Second Life Virtual World Expands 44% in Q2
Second Life Virtual World Expands 44% in Q2
Tuesday, July 8th, 2008 at 11:58 AM by: Zee Linden
Linden Lab is pleased to announce results for Second Life the second Quarter.
Land mass grew over 44%. The total number of regions owned by residents increased 44.2% over Q1 to just over 1.5 billion square meters. Our growth was due to the popularity of our newly launched “Openspace” land product along with a change in pricing to make the purchase of land more accessible to first time buyers. “Openspace” regions are full 65,000 square meter regions with an upfront fee of $250 and a recurring monthly fee of $75. We decreased the price for full regions by 40% to $1000 upfront (the recurring monthly fee remains $295). We also launched a new Land Store that instantly provisions new regions. Pricing changes plus a dramatically improved purchase experience fueled land sales in the quarter. On the other hand, premium subscriptions have remained flat since we decreased the stipend to L$ 300 per week in the second quarter of 2007. Prior to that the premium account essentially provided residents with a way to purchase L$ at a discounted rate. Because land represents nearly 8x more revenue to us than premium accounts, our focus has been on the launching of new land products rather than on enhancing the premium subscription.
User Hours grew by 8.5% while peak concurrency grew modestly. Resident user hours grew approximately 6% from an annualized rate of just under 350 million user hours in Q1 to over 380 million user hours in Q2. Peak concurrent users grew modestly from Q1 to Q2 to just under 67,000 users. Significant outages in April prevented this number from growing as fast as it otherwise might. However, uptime improved dramatically in May and June – see the grid status page – so we’re expecting to see continued growth in Q3.
User-to-User Transactions grew over 14%. Total user-to-user transactions, a measure of the gross domestic product in Second Life, grew 14.3% during the quarter from an annualized rate of $300 million in Q1 to $338 million in Q2. Resident spending remained a healthy $0.87 per user hour.
Volume on the Lindex grew 5%. Volume on the LindeX, our virtual currency exchange where users can buy and sell our inworld currency, grew 5% to an annual rate of $108 million. The total value of all the Linden Dollars in circulation grew 8.6% over Q1 to $19.7 million in Q2 with the exchange rate remaining steady against USD at approximately L$ 267 to one USD.
The number of “profitable” inworld businesses grew by 9%: Taking advantage of the growth in the economy, the number of inworld businesses with Positive Monthly Linden Flow, a measure of profitability, grew to 59,000 in June.
Meta Linden has posted the full data for June in a Google Spreadsheet here. We have made some modifications to the format to make them easier to review.
http://lindenlab.files.wordpress.com/2008/07/59kpmlf.png
http://spreadsheets.google.com/pub?key=pxbDc4B2FH94lKcWU2YDVFQ
Wednesday, November 12, 2008
Brainstorm
Miriam, 12 November 2008
What makes the problem so complicated is, I think, the search for sustainable solutions. Do these really lie in the law?
Because, in the real world, the trademark laws are solid, yet infringement is abundantly present everywhere in, for example, the form of illegitimate replicas of products being sold. If laws on this matter are not sustainable even in the real world, then why would they be effective in a virtual world?
Quoting trademark lawyer Martin Schwimmer: "If Nike goes to Chinatown and shuts down 10 sources of counterfeit Nikes, they will have to come back next week to shut down ten more".
Can law be a sustainable solution to this? And, if not law, what else could be used to regulate intellectual property violations? Is there even a different option to think of than laws?
Mr. Savirimuthu, 12 November 2008
Think about you and the brands that attract you? Are you surrounded by branded goods? Home, work, clothes, food etc?
Switch gears - think about your surfing habits. Do you spend lots of time online? Do you notice brands as much as you do offline? Did you notice the 'pop-up' or targeted advertising when you logged onto the Internet?
What do you notice about the way companies market to your generation? And even the generation that was born ten years before you?
Imagine - 1890. It is the industrial revolution. People have started to move from the countryside to the cities. They
have money and time for leisure/entertainment. You had brands then - the law too had a role. Laws and brands were very much tied up with geography and proximity. People were less mobile. Did law provide a sustainable solution? Well - you always had a problem with counterfeits. Nothing has changed - well, something has. Now. How does the Internet change the way companies target their consumers? Then, think about VW. How many registered users? A Marketing Managers dream, don't you think? Pause. VW is different from real world. Sim island is largely user generated content.
If you are a company - how much would it cost you to monitor, police and enforce. Avatars are 'real' people. Think the impossible - can we give our brands away? Go and look at IBM and LANCOME (SL search function). Maybe even Coca Cola.
Therein lies the answer to your dilemma. Law is never a solution, particularly in a decentralised environment.
Miriam, 12 November 2008
I am completely surrounded and influenced (not always consciously) by branded goods. I surf a lot and I do notice that every web site is drained with advertising, and though I do not always look at it and rarely click it, it does somehow have its influence, I think.
Though a virtual world is different from the real one, it does have the important similarity that people can create themselves an image/attitude/appearance with branded goods. And I think this aspect of brands is even more significant in a virtual world, because the possibilites are more extreme and 'more endless'. Or are they not?
The internet makes country boundaries insignificant. Enforcing trademark laws in a world such as Second Life brings along tremendous complexity in pursuiting laws and regulations, because the users all come from different countries and continents, with different laws, am I right? Though Second Life has Trade Mark Laws, and can enforce them, the responsibilty of doing this actually lies with the brand owner. And so if a brand owner wants to fight piracy, it has to track down the avatar's real user, and sue him in real life, which brings along his or hers country's laws and regulations. And this then brings along large costs, much time, and maybe even negative effects on the brand.
So what do you mean exactly by 'giving brands away'? Are you referring to cooperation with users so as to join forces instead of fighting it? That is something Playboy is willing to do, seeing that in the article I posted on our Research Blog, the manager has offered its cooperation with unauthorized Playboy product creators:
Grosso's even offered a few partnership deals with knock-off creators. "In some cases," he said, "we have already said, 'We love what you designed. Are you up for a rev share for using the brand?'
"Some are up for it because we will help promote them," he says. "Some are not so cooperative." In those cases, they've occasionally turned to the vendor's landlord. "Some have signed lease agreements with landlords that say 'no copyright infringement'," Grosso explains, "and when you alert the landlords they shut the store down."
This can be an option, and would probably generate money instead of costing? So, this would be a more sustainable solution to resolve losing value by (mis)use of a brand than investing in monitoring, policing & enforcing? But is it possible? And it would not eliminate the problem, would it?
Mr. Savirimuthu, 12 November 2008
My point about Brands - there are really no "new" questions or issues. What is true of society in the 1800s, is true now. There is no "silver bullet" to the problem of counterfeiting. I was in Beijing before the Olympics - one of the shopping complexes had a big sign in the entrance, claiming respect for IP. The various floors on the Complex sold every conceivable 'knock-off' item of all the leading brands.
VW introduces what I call "lifestyle" branding - corporations like LANCOME, COCA COLA (maybe you can find some more - use the search function under purchases etc) are keen get you and I to define our identities through their brands. We are already doing this - why would a young person walk around with those iPod earphones. What does the iPod brand "say" about that person: cool, unfussy, uncomplicated and savvy. Guess what - is Apple "stopping" you from doing this. They are in one sense giving the brand/image away. Why should VW be different?
Miriam, 12 November 2008
I get your point about brands. Hence, the aim is not to find a 'silver bullet' to eliminate the problem, but to find measures 'to make the most of it'? I mean to turn the company's strategy towards this enormous opportunity and turn the situation into a profitable one instead of a 'profit-decreasing' one? Which, of course, some are already (successfully) doing. Such as, indeed, Apple.
But companies that have already adapted their strategies to this opportunity and that are officially present in the virtual world still lose a significant percentage of potential sales due to trademark infringement and counterfeiting, or not? So there has to be done something against -or 'with' - that situation, and that is the problem we have to find solutions for, is it not?
The unauthorized use of trademarks. The Playboy strategy of offering partnership deals with 'knock-off' creators gives an idea for that problem, right?
What makes the problem so complicated is, I think, the search for sustainable solutions. Do these really lie in the law?
Because, in the real world, the trademark laws are solid, yet infringement is abundantly present everywhere in, for example, the form of illegitimate replicas of products being sold. If laws on this matter are not sustainable even in the real world, then why would they be effective in a virtual world?
Quoting trademark lawyer Martin Schwimmer: "If Nike goes to Chinatown and shuts down 10 sources of counterfeit Nikes, they will have to come back next week to shut down ten more".
Can law be a sustainable solution to this? And, if not law, what else could be used to regulate intellectual property violations? Is there even a different option to think of than laws?
Mr. Savirimuthu, 12 November 2008
Think about you and the brands that attract you? Are you surrounded by branded goods? Home, work, clothes, food etc?
Switch gears - think about your surfing habits. Do you spend lots of time online? Do you notice brands as much as you do offline? Did you notice the 'pop-up' or targeted advertising when you logged onto the Internet?
What do you notice about the way companies market to your generation? And even the generation that was born ten years before you?
Imagine - 1890. It is the industrial revolution. People have started to move from the countryside to the cities. They
have money and time for leisure/entertainment. You had brands then - the law too had a role. Laws and brands were very much tied up with geography and proximity. People were less mobile. Did law provide a sustainable solution? Well - you always had a problem with counterfeits. Nothing has changed - well, something has. Now. How does the Internet change the way companies target their consumers? Then, think about VW. How many registered users? A Marketing Managers dream, don't you think? Pause. VW is different from real world. Sim island is largely user generated content.
If you are a company - how much would it cost you to monitor, police and enforce. Avatars are 'real' people. Think the impossible - can we give our brands away? Go and look at IBM and LANCOME (SL search function). Maybe even Coca Cola.
Therein lies the answer to your dilemma. Law is never a solution, particularly in a decentralised environment.
Miriam, 12 November 2008
I am completely surrounded and influenced (not always consciously) by branded goods. I surf a lot and I do notice that every web site is drained with advertising, and though I do not always look at it and rarely click it, it does somehow have its influence, I think.
Though a virtual world is different from the real one, it does have the important similarity that people can create themselves an image/attitude/appearance with branded goods. And I think this aspect of brands is even more significant in a virtual world, because the possibilites are more extreme and 'more endless'. Or are they not?
The internet makes country boundaries insignificant. Enforcing trademark laws in a world such as Second Life brings along tremendous complexity in pursuiting laws and regulations, because the users all come from different countries and continents, with different laws, am I right? Though Second Life has Trade Mark Laws, and can enforce them, the responsibilty of doing this actually lies with the brand owner. And so if a brand owner wants to fight piracy, it has to track down the avatar's real user, and sue him in real life, which brings along his or hers country's laws and regulations. And this then brings along large costs, much time, and maybe even negative effects on the brand.
So what do you mean exactly by 'giving brands away'? Are you referring to cooperation with users so as to join forces instead of fighting it? That is something Playboy is willing to do, seeing that in the article I posted on our Research Blog, the manager has offered its cooperation with unauthorized Playboy product creators:
Grosso's even offered a few partnership deals with knock-off creators. "In some cases," he said, "we have already said, 'We love what you designed. Are you up for a rev share for using the brand?'
"Some are up for it because we will help promote them," he says. "Some are not so cooperative." In those cases, they've occasionally turned to the vendor's landlord. "Some have signed lease agreements with landlords that say 'no copyright infringement'," Grosso explains, "and when you alert the landlords they shut the store down."
This can be an option, and would probably generate money instead of costing? So, this would be a more sustainable solution to resolve losing value by (mis)use of a brand than investing in monitoring, policing & enforcing? But is it possible? And it would not eliminate the problem, would it?
Mr. Savirimuthu, 12 November 2008
My point about Brands - there are really no "new" questions or issues. What is true of society in the 1800s, is true now. There is no "silver bullet" to the problem of counterfeiting. I was in Beijing before the Olympics - one of the shopping complexes had a big sign in the entrance, claiming respect for IP. The various floors on the Complex sold every conceivable 'knock-off' item of all the leading brands.
VW introduces what I call "lifestyle" branding - corporations like LANCOME, COCA COLA (maybe you can find some more - use the search function under purchases etc) are keen get you and I to define our identities through their brands. We are already doing this - why would a young person walk around with those iPod earphones. What does the iPod brand "say" about that person: cool, unfussy, uncomplicated and savvy. Guess what - is Apple "stopping" you from doing this. They are in one sense giving the brand/image away. Why should VW be different?
Miriam, 12 November 2008
I get your point about brands. Hence, the aim is not to find a 'silver bullet' to eliminate the problem, but to find measures 'to make the most of it'? I mean to turn the company's strategy towards this enormous opportunity and turn the situation into a profitable one instead of a 'profit-decreasing' one? Which, of course, some are already (successfully) doing. Such as, indeed, Apple.
But companies that have already adapted their strategies to this opportunity and that are officially present in the virtual world still lose a significant percentage of potential sales due to trademark infringement and counterfeiting, or not? So there has to be done something against -or 'with' - that situation, and that is the problem we have to find solutions for, is it not?
The unauthorized use of trademarks. The Playboy strategy of offering partnership deals with 'knock-off' creators gives an idea for that problem, right?
Playboy Bunnies track down unauthorized Playboy products
New World Notes
Wagner James Au reports first-hand from Second Life
Monday, May 12, 2008
Vigilant Bunnies: Second Life's Playboy Staffers Investigate Knock-Offs, Offer Partnerships To Some Violators
According to CNN, virtual Playboy Bunnies are leaving their island paradise to track down unauthorized Playboy products being sold in Second Life. This is not a sentence I ever imagined writing, but it happens to be the case, with voluptuous managers Kimberly Laughton and Kattatonic Yates showing up in full regalia at sites advertising knock-off Playboy items, and scrupulously taking notes.
Contrary to the CNN report, Playboy Island manager MSGiro Grosso tells me, it's not a "crack-down"-- at least not yet.
"I asked the managers to find out who was doing knock offs," he tells me. "I just wanted to know how widespread it was." In real life, Grosso is Marc Girolimetti of Green Grotto Studios, the metaverse development company that's running Playboy's official presence in Second Life. Concerns over content theft have wracked SL's grassroots content creators for months, but this may be the first instance of a real world company actively joining their cause.
I ask Grosso how widespread the Playboy knock-offs are.
"It's enough to justify me asking who is doing it," he says.
For the moment, he adds, "I just want to know, and will decide what to do when I see the list."
Grosso's even offered a few partnership deals with knock-off creators. "In some cases," he said, "we have already said, 'We love what you designed. Are you up for a rev share for using the brand?'
"Some are up for it because we will help promote them," he says. "Some are not so cooperative." In those cases, they've occasionally turned to the vendor's landlord. "Some have signed lease agreements with landlords that say 'no copyright infringement'," Grosso explains, "and when you alert the landlords they shut the store down."
Those are two options that don't require invoking the DMCA, or other outside forces. "The harder ones may be dealt with through Linden. I'm still deciding."
For now, the investigation continues, led by leggy babe avatars in rabbit ears who are themselves so integral to the Playboy brand. Perhaps other real world companies in Second Life will take a cue from the Bunnies, sending out their own virtual emissaries. Supermodel avatars patrolling Second Life fashion emporiums in search of L'Oreal rip-offs, for instance, or Mario and Luigi flying off Nintendo Island, looking for violators to hop on.
Wagner James Au reports first-hand from Second Life
Monday, May 12, 2008
Vigilant Bunnies: Second Life's Playboy Staffers Investigate Knock-Offs, Offer Partnerships To Some Violators
According to CNN, virtual Playboy Bunnies are leaving their island paradise to track down unauthorized Playboy products being sold in Second Life. This is not a sentence I ever imagined writing, but it happens to be the case, with voluptuous managers Kimberly Laughton and Kattatonic Yates showing up in full regalia at sites advertising knock-off Playboy items, and scrupulously taking notes.
Contrary to the CNN report, Playboy Island manager MSGiro Grosso tells me, it's not a "crack-down"-- at least not yet.
"I asked the managers to find out who was doing knock offs," he tells me. "I just wanted to know how widespread it was." In real life, Grosso is Marc Girolimetti of Green Grotto Studios, the metaverse development company that's running Playboy's official presence in Second Life. Concerns over content theft have wracked SL's grassroots content creators for months, but this may be the first instance of a real world company actively joining their cause.
I ask Grosso how widespread the Playboy knock-offs are.
"It's enough to justify me asking who is doing it," he says.
For the moment, he adds, "I just want to know, and will decide what to do when I see the list."
Grosso's even offered a few partnership deals with knock-off creators. "In some cases," he said, "we have already said, 'We love what you designed. Are you up for a rev share for using the brand?'
"Some are up for it because we will help promote them," he says. "Some are not so cooperative." In those cases, they've occasionally turned to the vendor's landlord. "Some have signed lease agreements with landlords that say 'no copyright infringement'," Grosso explains, "and when you alert the landlords they shut the store down."
Those are two options that don't require invoking the DMCA, or other outside forces. "The harder ones may be dealt with through Linden. I'm still deciding."
For now, the investigation continues, led by leggy babe avatars in rabbit ears who are themselves so integral to the Playboy brand. Perhaps other real world companies in Second Life will take a cue from the Bunnies, sending out their own virtual emissaries. Supermodel avatars patrolling Second Life fashion emporiums in search of L'Oreal rip-offs, for instance, or Mario and Luigi flying off Nintendo Island, looking for violators to hop on.
Tuesday, November 4, 2008
CopyBot
Outcry as ‘Copybot’ threatens copyright protection
Tue Nov 14, 2006 5:13am PST
By Adam Reuters
SECOND LIFE, Nov 15 (Reuters) - A software tool called CopyBot that can clone avatars, objects and textures is stoking the ire of Second Life business owners who fear their creations could be illicitly copied and sold.
“This product has caused tremendous worry among content creators who want to understand how its use may possibly affect their business,” Community manager Robin Linden said in a blog post after meeting with concerned residents. “In particular, they are concerned about theft of their creations, and the potential for unscrupulous people to undercut their prices and essentially take away their business.”
Linden Lab has attempted to make the protection of intellectual property a cornerstone of Second Life, giving residents ownership rights for the content they create in-world, and setting up a mechanism for residents to file claims of copyright infringement under the Digital Millennium Copyright Act.
CopyBot was originally created by libsecondlife, a Linden Lab-supported open source project to reverse engineer the Second Life software. It allows the copying of any avatar or object, including those that are designated as “no copy” by their creators.
Amid increasing criticism, the group moved to pull the Copybot source code, but on Monday evening Copybot was put up for sale on the online marketplace SLExchange, raising the prospect that it could become widespread.
In a comment on the Official Linden Blog, apparently written before CopyBot was made available for sale, libsecondlife member Baba Yamamoto said: “CopyBot is not a product that we sell or distribute. It’s a debugging tool and silly demo with a [now] obviously bad choice of name. Hopefully you won’t be seeing copy bot on SLex any time soon.”
Yamamoto was not immediately available for comment on Tuesday.
Prim Revolution, the resident who has put CopyBot up for sale, said he has had made less than a dozen sales at L$3,000 each. In an in-world interview with Reuters, he demonstrated CopyBot by making a perfect replica of the Adam Reuters avatar (above).
“You’ll never get around the potential for abuse and the negativity associated with this particular app,” he said. “But I think the idea of clones and bots is very cool and i’ll be adding more new features for things like automated go-go dancers at clubs.”
“Even if I pull this program, plenty of other people out there have it or have the knowledge to create something bigger and better,” Revolution added. “My advice is to offer the whole package when you sell something. Don’t just offer a couch, but a couch that has several custom poses … work one-on-one with people to create unique things, and offer customization services instead of throwing up some prims for sale and forgetting about it.”
Revolution’s avatar was created on Nov. 13, but he said that he has been in Second Life for about two years. He declined to provide any additional information, including his real-life identity, citing “the nature of the (CopyBot) program.”
Robin Linden said that content creators who feel their copyrights have been violated “have the option of using the DMCA process to file a complaint. It’s a difficult process, but it is one that we’re willing to pursue on your behalf because we agree that copying is a disincentive to creation.”
Linden Lab is also considering other measures, including a “first use” tag that would signal who created an item, similar to a brand name garment label. But the company’s plans to open-source Second Life have raised concerns among in-world businesses that protecting intellectual property may become increasingly difficult in the future.
Timeless Prototype,creator of the popular Multi Gadget, told Reuters in an interview earlier this month: “If the server is put in control of users, they can reverse engineer everything,” he said. “If they had access to that source, they could take (the Multi Gadget scripts) in 10 seconds — it’s a big worry.”
Tue Nov 14, 2006 5:13am PST
By Adam Reuters
SECOND LIFE, Nov 15 (Reuters) - A software tool called CopyBot that can clone avatars, objects and textures is stoking the ire of Second Life business owners who fear their creations could be illicitly copied and sold.
“This product has caused tremendous worry among content creators who want to understand how its use may possibly affect their business,” Community manager Robin Linden said in a blog post after meeting with concerned residents. “In particular, they are concerned about theft of their creations, and the potential for unscrupulous people to undercut their prices and essentially take away their business.”
Linden Lab has attempted to make the protection of intellectual property a cornerstone of Second Life, giving residents ownership rights for the content they create in-world, and setting up a mechanism for residents to file claims of copyright infringement under the Digital Millennium Copyright Act.
CopyBot was originally created by libsecondlife, a Linden Lab-supported open source project to reverse engineer the Second Life software. It allows the copying of any avatar or object, including those that are designated as “no copy” by their creators.
Amid increasing criticism, the group moved to pull the Copybot source code, but on Monday evening Copybot was put up for sale on the online marketplace SLExchange, raising the prospect that it could become widespread.
In a comment on the Official Linden Blog, apparently written before CopyBot was made available for sale, libsecondlife member Baba Yamamoto said: “CopyBot is not a product that we sell or distribute. It’s a debugging tool and silly demo with a [now] obviously bad choice of name. Hopefully you won’t be seeing copy bot on SLex any time soon.”
Yamamoto was not immediately available for comment on Tuesday.
Prim Revolution, the resident who has put CopyBot up for sale, said he has had made less than a dozen sales at L$3,000 each. In an in-world interview with Reuters, he demonstrated CopyBot by making a perfect replica of the Adam Reuters avatar (above).
“You’ll never get around the potential for abuse and the negativity associated with this particular app,” he said. “But I think the idea of clones and bots is very cool and i’ll be adding more new features for things like automated go-go dancers at clubs.”
“Even if I pull this program, plenty of other people out there have it or have the knowledge to create something bigger and better,” Revolution added. “My advice is to offer the whole package when you sell something. Don’t just offer a couch, but a couch that has several custom poses … work one-on-one with people to create unique things, and offer customization services instead of throwing up some prims for sale and forgetting about it.”
Revolution’s avatar was created on Nov. 13, but he said that he has been in Second Life for about two years. He declined to provide any additional information, including his real-life identity, citing “the nature of the (CopyBot) program.”
Robin Linden said that content creators who feel their copyrights have been violated “have the option of using the DMCA process to file a complaint. It’s a difficult process, but it is one that we’re willing to pursue on your behalf because we agree that copying is a disincentive to creation.”
Linden Lab is also considering other measures, including a “first use” tag that would signal who created an item, similar to a brand name garment label. But the company’s plans to open-source Second Life have raised concerns among in-world businesses that protecting intellectual property may become increasingly difficult in the future.
Timeless Prototype,creator of the popular Multi Gadget, told Reuters in an interview earlier this month: “If the server is put in control of users, they can reverse engineer everything,” he said. “If they had access to that source, they could take (the Multi Gadget scripts) in 10 seconds — it’s a big worry.”
Second Life - real world lawsuit on virtual world copyright infringement
SL business sues for copyright infringement
Tue Jul 3, 2007 12:13pm PDT
By Eric Reuters
SECOND LIFE, July 3 (Reuters) - Second Life entrepreneur Kevin Alderman filed a copyright infringement lawsuit on Tuesday against Second Life resident Volkov Catteneo, and Alderman’s lawyer said he plans to subpoena Linden Lab to force it to disclose Catteneo’s real-world identity.
Alderman (Second Life name: Stroker Serpentine) runs the adult-content company Eros LLC. One of the company’s most popular products is the SexGen bed, virtual furniture that contains more than 150 sex animations and retails for L$12,000 (US$45.11).
In “Eros LLC vs John Doe,” filed in the U.S. District Court in Tampa, Alderman accuses Catteneo of illicitly copying and selling the SexGen bed for as little as L$4,000, sharply cutting into Eros’ sales.
Filing a copyright infringement case against “John Doe” is an established practice in Internet cases where the defendant’s identity is not initially apparent, said Alderman’s lawyer, Francis Taney of Buchanan, Ingersoll & Rooney. For example, the music industry has filed thousands of “John Doe” lawsuits against people it alleges have illicitly shared music online.
Taney said he will seek Catteneo’s identity, chat histories, and financial records from Linden Lab and PayPal.
“Despite reasonable efforts, Eros does not presently know Defendant’s true identity or address but intends to obtain this information by way of subpoenas directed to one or more internet service providers that are likely to have obtained said information from Defendant,” the lawsuit states.
Catteneo told Reuters in a Second Life interview that Alderman had never been in touch with him. Catteneo said he had sold about 50 of the beds on behalf of a third party who pocketed the proceeds.
Catteneo, who declined to provide his real name, said he doesn’t fear the subpoena. “I’m not some kind of noob,” Catteneo said. “My name isn’t on [Linden Lab's] file. I don’t even have a permanent address [in real life] either.”
Alderman estimated that Eros has sold 100,000 of the beds. Earlier this month the Amsterdam sims, another Alderman creation, were sold to Dutch media firm Boom BV for US$50,000.
The SexGen beds are sold as “no-copy” objects, normally prohibiting their replication. Alderman said he doesn’t know how a copyable version of his product began to circulate in Second Life.
Alderman said he tried to report the copyright violation to Linden Lab in accordance with its Digital Millennium Copyright Act compliance policy, but that he was told to use the in-world “abuse reporting” system.
Linden Lab was not immediately available for comment.
The lawsuit seeks damages equal to three times the damages sustained by Eros or three times the defendant’s profits. But Alderman said he’s less interested in winning damages than stopping the theft of his property.
“We’re not going to sue him for a million dollars,” he said. “I don’t want to crucify the guy. I’m trying to protect my income and my family.”
Tue Jul 3, 2007 12:13pm PDT
By Eric Reuters
SECOND LIFE, July 3 (Reuters) - Second Life entrepreneur Kevin Alderman filed a copyright infringement lawsuit on Tuesday against Second Life resident Volkov Catteneo, and Alderman’s lawyer said he plans to subpoena Linden Lab to force it to disclose Catteneo’s real-world identity.
Alderman (Second Life name: Stroker Serpentine) runs the adult-content company Eros LLC. One of the company’s most popular products is the SexGen bed, virtual furniture that contains more than 150 sex animations and retails for L$12,000 (US$45.11).
In “Eros LLC vs John Doe,” filed in the U.S. District Court in Tampa, Alderman accuses Catteneo of illicitly copying and selling the SexGen bed for as little as L$4,000, sharply cutting into Eros’ sales.
Filing a copyright infringement case against “John Doe” is an established practice in Internet cases where the defendant’s identity is not initially apparent, said Alderman’s lawyer, Francis Taney of Buchanan, Ingersoll & Rooney. For example, the music industry has filed thousands of “John Doe” lawsuits against people it alleges have illicitly shared music online.
Taney said he will seek Catteneo’s identity, chat histories, and financial records from Linden Lab and PayPal.
“Despite reasonable efforts, Eros does not presently know Defendant’s true identity or address but intends to obtain this information by way of subpoenas directed to one or more internet service providers that are likely to have obtained said information from Defendant,” the lawsuit states.
Catteneo told Reuters in a Second Life interview that Alderman had never been in touch with him. Catteneo said he had sold about 50 of the beds on behalf of a third party who pocketed the proceeds.
Catteneo, who declined to provide his real name, said he doesn’t fear the subpoena. “I’m not some kind of noob,” Catteneo said. “My name isn’t on [Linden Lab's] file. I don’t even have a permanent address [in real life] either.”
Alderman estimated that Eros has sold 100,000 of the beds. Earlier this month the Amsterdam sims, another Alderman creation, were sold to Dutch media firm Boom BV for US$50,000.
The SexGen beds are sold as “no-copy” objects, normally prohibiting their replication. Alderman said he doesn’t know how a copyable version of his product began to circulate in Second Life.
Alderman said he tried to report the copyright violation to Linden Lab in accordance with its Digital Millennium Copyright Act compliance policy, but that he was told to use the in-world “abuse reporting” system.
Linden Lab was not immediately available for comment.
The lawsuit seeks damages equal to three times the damages sustained by Eros or three times the defendant’s profits. But Alderman said he’s less interested in winning damages than stopping the theft of his property.
“We’re not going to sue him for a million dollars,” he said. “I don’t want to crucify the guy. I’m trying to protect my income and my family.”
Brand Promotion and Unauthorized Trademark Use in Virtual Worlds
WIPO Magazine
IP and Business: Second Life - Brand Promotion and Unauthorized Trademark Use in Virtual Worlds
November 2007
The strong identification of users with their online avatars has captured the attention of big brand owners. (Image: Second Life)
The strong identification of users with their online avatars has captured the attention of big brand owners. (Image: Second Life)
Intellectual property (IP) is the basis for the creation and protection of rights in online gaming. But the creators of virtual worlds, such as Second Life, also recognize the new IP developed by the players who interact and evolve in the worlds they have created. This has become the basis for buying and selling creations in such worlds, and has made millionaires in the real world. This article* discusses the use of trademark rights in Second Life, where IP is a cornerstone for in-world trade. The article was adapted with permission from the INTA Bulletin, (Copyright © 2007 the International Trademark Association).
An entirely new world is emerging as a hotbed for brand promotion as well as possible trademark infringement – the world of virtual reality. The popular press reports with increasing frequency about business activities taking place in virtual worlds. Gartner, Inc., an information technology research and advisory company, predicted in a recent report that by the end of 2011, 80 percent of active Internet users will have some sort of presence in a virtual world. One of the most popular virtual worlds at present is Second Life®, an online economy that is growing at a rate of more than 25 percent per month. Second Life is often described as a massive multiplayer online role-playing game (MMORPG, pronounced mor’ peg), but it is certainly not a traditional computer game.
Linden Lab, the San Francisco, California–based company that owns and operates Second Life, describes it as a “3D online world with a rapidly growing population from more than 100 countries around the globe, in which the residents themselves create and build the world, which includes homes, vehicles, nightclubs, stores, landscapes, clothing and games.” These residents are online personas, called avatars, created by their users. The strong identification of users with their avatars, together with the ability to create and build virtual businesses that participate in a very real economy, is beginning to capture the attention of major brand owners. This environment offers a new means of brand promotion as well as a new platform for creating and using intellectual property rights and, consequently, for possible infringements of intellectual property rights, including trademark infringements.
“You retain copyright and other IP rights with respect to content you create in Second Life.” – Second Life, Terms of Service, 3.2
Opportunities and challenges
Linden Lab responds to allegations of copyright infringement in accordance with the process and procedures of the U.S. Digital Millennium Copyright Act. The stated Second Life policy on trademarked material states that “Linden staff generally removes content that uses trademarks without apparent authorization, with or without giving notice to the object’s owner…. Any resident may file an abuse report if they see any other resident making unauthorized use of trademarked material in Second Life.” Since there is no case law on point, it is unsettled whether use of a real world trademark by an avatar in a virtual world constitutes trademark use, which is a necessary element of trademark infringement.
Trademark owners should be aware of the opportunities and challenges to their brand in virtual worlds like Second Life. Some brand owners have established an online presence by building retail stores in Second Life to sell products in the real world. All of the attendant concerns of brand reputation and disparagement are present in this new medium, just as they are in the real world. There have been instances of counterfeiting and allegations of copyright infringement for misappropriation of others’ property created and used in virtual worlds. With over 11.5 million transactions reported in recent months, if only one percent of the transactions involves unlicensed trademarks, that translates to 115,000 actionable cases of infringement in only one month and more than 1.4 million infringements per year.
Assessing the potential of Second Life as a marketing tool is of fundamental importance to brand owners. Because the average age of the virtual world participants is 32 and the ratio of men to women is roughly 1:1, it has become an ideal place for companies to consider marketing their goods to an older and wealthier demographic. This is especially so considering the site’s incredible growth rate. It’s no wonder that companies like Toyota, Dell and Reebok have decided to expand into the “digital marketplace” by opening their own online stores and choosing to make use of the site for advertising purposes.
*
The average user is online between 20 to 40 hours a week. (Image Second Life)
Created in 2003, Second Life is reported to have more than 9 million registered persons (persons can create more than one avatar) and an active community of 600,000 residents who participate regularly. More than half of Second Life users live in Europe; another third are from the United States. The average user is online between 20 and 40 hours a week. As a testament to the rapid growth in popularity of Second Life, Time magazine included Second Life creator Phillip Rosendale in this year’s list of the world’s 100 most influential people, and media organizations such as Reuters have stationed reporters in Second Life.
The German state of Baden Württemberg has a representation in Second Life and has been joined by embassies from the Maldives and Sweden. Second Life is home to a virtual business incubator, known as Nonprofit Commons, for 30 nonprofits, and the Linden Bar Association, with, at last count, 30 real-life attorneys. The American Cancer Society established a virtual Relay for Life fundraiser that raised $82,000 in the months prior to the virtual event.
“You will comply with the processes of the Digital Millennium Copyright Act regarding copyright infringement claims covered under such Act.” – Second Life, Terms of Service, 4.3
Trading virtual IP
Second Life is different from other MMORPGs in two important ways. First, the Terms of Service of Second Life permit the creators of virtual property to own property they create. Specifically, the Terms of Service state: “you retain copyright and other IP rights with respect to content you create in Second Life, to the extent that you have such rights under applicable law.” Because Second Life allows residents to retain the rights in their online creations, they are increasingly creating digital objects and inventory to sell to other users for use by their avatars.
Second, the economy of Second Life is driven by an in-world currency, the Linden Dollar, which is exchangeable on the Linden Currency Exchange (known as the LindeX) at the current rate of approximately 270 Linden Dollars per U.S. dollar. There are at least three other currency exchanges that exchange Linden Dollars for real-world currency. Residents collect Linden Dollars by selling digital creations or virtual real estate to other residents and then convert the Linden Dollars to currency.
Rosendale stated at the August 1, 2007, AlwaysOn technology conference that 830 residents make more than US $1,000 a month in Second Life. Some residents’ Second Life business activities have been successful enough to replace their real-life income. The virtual real estate market in Second Life and other MMPORGs has created a market with a collective value estimated to be in the hundreds of millions of U.S. dollars, and the economy in Second Life is 100 percent larger than it was six months ago. Time magazine reported that $6.8 million changed hands in June 2007 on LindeX and that U.S. Congress is looking into whether to tax this commerce. Companies whose entire business is building virtual property in virtual worlds have been created.
*
Dell Computers has established a factory and virtual store in Second Life. (Images Dell Computers)
“Any resident may file an abuse report if they see any other resident making unauthorized use of trademarked material in Second Life.”
Policing infringement
Second Life’s creation ownership policy and its in-world currency exchangeable for real-world money have stimulated a real consumer economy in the virtual world; however, that economy has predictably given rise to many instances of IP infringement. Avatars can, for example, purchase from “enterprising” residents virtual NIKE shoes bearing the distinctive Swoosh Design or virtual iPOD music players loaded with the latest hits, notwithstanding that Nike, Apple and the recording artists may not have consented to the creation and sale of the virtual property exploiting their trademarks, copyright, designs and other valuable intellectual property. This activity is prohibited by Second Life’s Terms of Service; however, as in the real world, policing infringement most often falls to the right holder.
Although many IP owners appear to be taking a wait and see approach in these early days of Second Life’s popularity, brand owners should be aware of both the marketing potential and the possibilities of infringement that Second Life presents. And at least one real-world lawsuit has been initiated: Eros, LLC alleges copyright infringement, trademark infringement and misrepresentation for unauthorized reproduction and sale of a virtual adult-themed bed.
* This article was adapted by the WIPO Magazine from an article which first appeared in the INTA Bulletin, Vol. 62, No. 17 – September 15, 2007, written by: Susan D. Rector, Schottenstein Zox & Dunn Co., Columbus, Ohio, USA; Peter Giddens, Lang Michener LLP, Toronto, Ontario, Canada; Ron Klagsbald, Price-Klagsbald Law Offices, Ramat-Gan, Israel; Dinisa Hardley Folmar, The Coca-Cola Company, Atlanta, Georgia, USA, Thomas LaPerle, Apple Inc., Cupertino, California, USA, Ellen Shankman, Ellen Shankman & Associates, Rehovot, Israel
_________________
The Virtual Economy
Ailin Graef’s avatar, Anshe Chung, cost her an initial investment of just US$9.95 to set up her Second Life account, but has made her a real life millionaire. Anshe bought Second Life real estate, which she subdivided, developed and landscaped with panache, and put up for rent and resale. Other avatars bought into the lifestyle Anshe created. Two and half years later, Anshe is a virtual real estate mogul with projects that vie with large scale real world models.
Anshe Chung is not the only virtual resident earning a comfortable living for her owner. More and more subscribers are making Second Life their place of business. As of April 2007, economic activity on Second Life averaged over US$1.5 million per day. Items available for sale include clothing, avatar hair and skin texture, vehicles, furniture and, of course, homes – most sold using in-world brands. As financial and physical barriers to entry are non-existent, the only parameters for success are design quality and brand reputation. Anyone can compete with the biggest, most successful and luxurious real world brands that have in-world presence.
But there are threats to the virtual market place. At the end of 2006, CopyBot, a program put up for sale by the avatar Prim Revolution, caused an uproar among Second Life residents. CopyBot can clone any virtual good without paying for it – threatening the in-world economy and real world revenues. Linden Labs has banned the program and residents can file an Abuse Report and a complaint for infringement under the DMCA, but it is a difficult process.
Ailin Graef’s revenues, however, may be safe. She created a real-life spin off corporation, based in China, called Anshe Chung Studios. The company develops immersive 3D environments for applications ranging from education to business conferencing and product prototyping.
IP and Business: Second Life - Brand Promotion and Unauthorized Trademark Use in Virtual Worlds
November 2007
The strong identification of users with their online avatars has captured the attention of big brand owners. (Image: Second Life)
The strong identification of users with their online avatars has captured the attention of big brand owners. (Image: Second Life)
Intellectual property (IP) is the basis for the creation and protection of rights in online gaming. But the creators of virtual worlds, such as Second Life, also recognize the new IP developed by the players who interact and evolve in the worlds they have created. This has become the basis for buying and selling creations in such worlds, and has made millionaires in the real world. This article* discusses the use of trademark rights in Second Life, where IP is a cornerstone for in-world trade. The article was adapted with permission from the INTA Bulletin, (Copyright © 2007 the International Trademark Association).
An entirely new world is emerging as a hotbed for brand promotion as well as possible trademark infringement – the world of virtual reality. The popular press reports with increasing frequency about business activities taking place in virtual worlds. Gartner, Inc., an information technology research and advisory company, predicted in a recent report that by the end of 2011, 80 percent of active Internet users will have some sort of presence in a virtual world. One of the most popular virtual worlds at present is Second Life®, an online economy that is growing at a rate of more than 25 percent per month. Second Life is often described as a massive multiplayer online role-playing game (MMORPG, pronounced mor’ peg), but it is certainly not a traditional computer game.
Linden Lab, the San Francisco, California–based company that owns and operates Second Life, describes it as a “3D online world with a rapidly growing population from more than 100 countries around the globe, in which the residents themselves create and build the world, which includes homes, vehicles, nightclubs, stores, landscapes, clothing and games.” These residents are online personas, called avatars, created by their users. The strong identification of users with their avatars, together with the ability to create and build virtual businesses that participate in a very real economy, is beginning to capture the attention of major brand owners. This environment offers a new means of brand promotion as well as a new platform for creating and using intellectual property rights and, consequently, for possible infringements of intellectual property rights, including trademark infringements.
“You retain copyright and other IP rights with respect to content you create in Second Life.” – Second Life, Terms of Service, 3.2
Opportunities and challenges
Linden Lab responds to allegations of copyright infringement in accordance with the process and procedures of the U.S. Digital Millennium Copyright Act. The stated Second Life policy on trademarked material states that “Linden staff generally removes content that uses trademarks without apparent authorization, with or without giving notice to the object’s owner…. Any resident may file an abuse report if they see any other resident making unauthorized use of trademarked material in Second Life.” Since there is no case law on point, it is unsettled whether use of a real world trademark by an avatar in a virtual world constitutes trademark use, which is a necessary element of trademark infringement.
Trademark owners should be aware of the opportunities and challenges to their brand in virtual worlds like Second Life. Some brand owners have established an online presence by building retail stores in Second Life to sell products in the real world. All of the attendant concerns of brand reputation and disparagement are present in this new medium, just as they are in the real world. There have been instances of counterfeiting and allegations of copyright infringement for misappropriation of others’ property created and used in virtual worlds. With over 11.5 million transactions reported in recent months, if only one percent of the transactions involves unlicensed trademarks, that translates to 115,000 actionable cases of infringement in only one month and more than 1.4 million infringements per year.
Assessing the potential of Second Life as a marketing tool is of fundamental importance to brand owners. Because the average age of the virtual world participants is 32 and the ratio of men to women is roughly 1:1, it has become an ideal place for companies to consider marketing their goods to an older and wealthier demographic. This is especially so considering the site’s incredible growth rate. It’s no wonder that companies like Toyota, Dell and Reebok have decided to expand into the “digital marketplace” by opening their own online stores and choosing to make use of the site for advertising purposes.
*
The average user is online between 20 to 40 hours a week. (Image Second Life)
Created in 2003, Second Life is reported to have more than 9 million registered persons (persons can create more than one avatar) and an active community of 600,000 residents who participate regularly. More than half of Second Life users live in Europe; another third are from the United States. The average user is online between 20 and 40 hours a week. As a testament to the rapid growth in popularity of Second Life, Time magazine included Second Life creator Phillip Rosendale in this year’s list of the world’s 100 most influential people, and media organizations such as Reuters have stationed reporters in Second Life.
The German state of Baden Württemberg has a representation in Second Life and has been joined by embassies from the Maldives and Sweden. Second Life is home to a virtual business incubator, known as Nonprofit Commons, for 30 nonprofits, and the Linden Bar Association, with, at last count, 30 real-life attorneys. The American Cancer Society established a virtual Relay for Life fundraiser that raised $82,000 in the months prior to the virtual event.
“You will comply with the processes of the Digital Millennium Copyright Act regarding copyright infringement claims covered under such Act.” – Second Life, Terms of Service, 4.3
Trading virtual IP
Second Life is different from other MMORPGs in two important ways. First, the Terms of Service of Second Life permit the creators of virtual property to own property they create. Specifically, the Terms of Service state: “you retain copyright and other IP rights with respect to content you create in Second Life, to the extent that you have such rights under applicable law.” Because Second Life allows residents to retain the rights in their online creations, they are increasingly creating digital objects and inventory to sell to other users for use by their avatars.
Second, the economy of Second Life is driven by an in-world currency, the Linden Dollar, which is exchangeable on the Linden Currency Exchange (known as the LindeX) at the current rate of approximately 270 Linden Dollars per U.S. dollar. There are at least three other currency exchanges that exchange Linden Dollars for real-world currency. Residents collect Linden Dollars by selling digital creations or virtual real estate to other residents and then convert the Linden Dollars to currency.
Rosendale stated at the August 1, 2007, AlwaysOn technology conference that 830 residents make more than US $1,000 a month in Second Life. Some residents’ Second Life business activities have been successful enough to replace their real-life income. The virtual real estate market in Second Life and other MMPORGs has created a market with a collective value estimated to be in the hundreds of millions of U.S. dollars, and the economy in Second Life is 100 percent larger than it was six months ago. Time magazine reported that $6.8 million changed hands in June 2007 on LindeX and that U.S. Congress is looking into whether to tax this commerce. Companies whose entire business is building virtual property in virtual worlds have been created.
*
Dell Computers has established a factory and virtual store in Second Life. (Images Dell Computers)
“Any resident may file an abuse report if they see any other resident making unauthorized use of trademarked material in Second Life.”
Policing infringement
Second Life’s creation ownership policy and its in-world currency exchangeable for real-world money have stimulated a real consumer economy in the virtual world; however, that economy has predictably given rise to many instances of IP infringement. Avatars can, for example, purchase from “enterprising” residents virtual NIKE shoes bearing the distinctive Swoosh Design or virtual iPOD music players loaded with the latest hits, notwithstanding that Nike, Apple and the recording artists may not have consented to the creation and sale of the virtual property exploiting their trademarks, copyright, designs and other valuable intellectual property. This activity is prohibited by Second Life’s Terms of Service; however, as in the real world, policing infringement most often falls to the right holder.
Although many IP owners appear to be taking a wait and see approach in these early days of Second Life’s popularity, brand owners should be aware of both the marketing potential and the possibilities of infringement that Second Life presents. And at least one real-world lawsuit has been initiated: Eros, LLC alleges copyright infringement, trademark infringement and misrepresentation for unauthorized reproduction and sale of a virtual adult-themed bed.
* This article was adapted by the WIPO Magazine from an article which first appeared in the INTA Bulletin, Vol. 62, No. 17 – September 15, 2007, written by: Susan D. Rector, Schottenstein Zox & Dunn Co., Columbus, Ohio, USA; Peter Giddens, Lang Michener LLP, Toronto, Ontario, Canada; Ron Klagsbald, Price-Klagsbald Law Offices, Ramat-Gan, Israel; Dinisa Hardley Folmar, The Coca-Cola Company, Atlanta, Georgia, USA, Thomas LaPerle, Apple Inc., Cupertino, California, USA, Ellen Shankman, Ellen Shankman & Associates, Rehovot, Israel
_________________
The Virtual Economy
Ailin Graef’s avatar, Anshe Chung, cost her an initial investment of just US$9.95 to set up her Second Life account, but has made her a real life millionaire. Anshe bought Second Life real estate, which she subdivided, developed and landscaped with panache, and put up for rent and resale. Other avatars bought into the lifestyle Anshe created. Two and half years later, Anshe is a virtual real estate mogul with projects that vie with large scale real world models.
Anshe Chung is not the only virtual resident earning a comfortable living for her owner. More and more subscribers are making Second Life their place of business. As of April 2007, economic activity on Second Life averaged over US$1.5 million per day. Items available for sale include clothing, avatar hair and skin texture, vehicles, furniture and, of course, homes – most sold using in-world brands. As financial and physical barriers to entry are non-existent, the only parameters for success are design quality and brand reputation. Anyone can compete with the biggest, most successful and luxurious real world brands that have in-world presence.
But there are threats to the virtual market place. At the end of 2006, CopyBot, a program put up for sale by the avatar Prim Revolution, caused an uproar among Second Life residents. CopyBot can clone any virtual good without paying for it – threatening the in-world economy and real world revenues. Linden Labs has banned the program and residents can file an Abuse Report and a complaint for infringement under the DMCA, but it is a difficult process.
Ailin Graef’s revenues, however, may be safe. She created a real-life spin off corporation, based in China, called Anshe Chung Studios. The company develops immersive 3D environments for applications ranging from education to business conferencing and product prototyping.
Research description
The problem:
Virtual world users think that well-known businesses have no right to determine by whom and how brands or trademarks are used. However, real world laws also apply to virtual worlds and businesses can just as well pose legitimate claims against avatars (virtual characters) as against real people. The challenge for the businesses is to eliminate unauthorised transactions of trade names and brands. However, this is hard to put in practice and solutions have not yet been found. To fight against brand piracy, innovative solutions are needed.
The project:
In short: provide answers to the way we could approach the problem of unauthorised brand exploitation in virtual worlds.
Longer version: provide an analysis of the challenges facing brand owners and the solutions available to the protection of value in their business models. Incorporate in your analysis case studies of at least 3 virtual world sites where issues of brand identity are relevant.
The research question:
How should owners of well-known brands seek to preserve value (=to preserve profit) in these assets (=the trademark identity of the brand(s)) in virtual worlds?
Subassignments to answer the research question:
a. Identify and discuss the relationship between brands and business models in generating value. In particular, explain both the business and legal conception of brand identity.
b. Explain the challenges posed by virtual worlds for the traditional business model.
c. Examine the role of Trade Mark Law and End of User Policies, as they are described on sites like Second Life.
d. Describe the types of unauthorised use of well-known marks and analyse their significance for the way brand identity is evolving.
e. Perform a case study on brand identity issues in the following virtual worlds:
-Second Life
-Entropia Universe
-There.com
Virtual world users think that well-known businesses have no right to determine by whom and how brands or trademarks are used. However, real world laws also apply to virtual worlds and businesses can just as well pose legitimate claims against avatars (virtual characters) as against real people. The challenge for the businesses is to eliminate unauthorised transactions of trade names and brands. However, this is hard to put in practice and solutions have not yet been found. To fight against brand piracy, innovative solutions are needed.
The project:
In short: provide answers to the way we could approach the problem of unauthorised brand exploitation in virtual worlds.
Longer version: provide an analysis of the challenges facing brand owners and the solutions available to the protection of value in their business models. Incorporate in your analysis case studies of at least 3 virtual world sites where issues of brand identity are relevant.
The research question:
How should owners of well-known brands seek to preserve value (=to preserve profit) in these assets (=the trademark identity of the brand(s)) in virtual worlds?
Subassignments to answer the research question:
a. Identify and discuss the relationship between brands and business models in generating value. In particular, explain both the business and legal conception of brand identity.
b. Explain the challenges posed by virtual worlds for the traditional business model.
c. Examine the role of Trade Mark Law and End of User Policies, as they are described on sites like Second Life.
d. Describe the types of unauthorised use of well-known marks and analyse their significance for the way brand identity is evolving.
e. Perform a case study on brand identity issues in the following virtual worlds:
-Second Life
-Entropia Universe
-There.com
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