Second Life cops some pretty ignorant coverage from mainstream media, who tend to fall back on stereotypes of wall-to-wall virtual s-x and other types of deviancy.

As has previously been discussed, there’s a lot of innovative stuff happening in virtual environments. That said, the s-x industry have a proud history of setting precedents online and they’ve proven that point again in the past week from a legal viewpoint.

Eros LLC is a Florida-based company that makes s-x-related goods in Second Life. Primarily, they sell beds with built in scripting that animates an avatar in dozens of s-xual positions with or without another avatar. Watching your virtual representation bump uglies with someone else’s pixellated pride and joy may seem bizarre, but the reality is it’s a common practice amongst people engaged in long distance relationships.

Second Life is so much more than virtual s-x, but just as in the real world it plays its fair share in proceedings.

Eros’ founder Kevin Alderman, along with an associate Shannon Grei, have brought a class action against Second Life creators Linden Lab. Legal junkies can view the full details of the action here, but essentially the issue revolves around protection of the intellectual property rights surrounding virtual goods.

The claim is being made that Linden Lab aren’t doing enough to shut down people under the Lanham Act who copy original content created in Second Life, and that when they do act it’s done too slowly.

This action doesn’t allude to a specific incident of theft, although Eros have been involved with two successful legal actions against individuals who copied creations and then sold them under their own name.

The implications of this action are significant to say the least. Eros LLC are open about the fact that they make a six-figure income from Second Life, making them one of the larger in-world businesses. If they win this action, they’ve created one hell of a precedent as well as giving some hope to smaller content creators who don’t have the ability to tackle the issue themselves.

If Linden Lab successfully defend the action, a fascinating situation will have arisen where a line has been drawn in the sand between physical and virtual goods. Linden Lab is now in an unenviable situation of being perceived as not adequately protecting content creators, who are the core of its business.

It’s hard not to feel some sympathy for the company, as it’s put in a lot of effort to not be seen as a de facto government for Second Life. After five years of month on month growth, real world considerations are intruding across a broad range of areas.

Second Life’s biggest strength is its free form and active support of content creation, but it’s now also one of its biggest challenges.

The outcome of this action will potentially have ramifications for all types of virtual goods and the level of protection of intellectual property a creator can expect. It all may sound a little abstract, but given nearly fifty million US dollars of user-to-user transactions occur in Second Life alone each month, there’s a lot at stake.

The virtual goods market beyond Second Life is enormous and you can be sure companies like Facebook will be watching this very closely, given the heavy use of applications that provide virtual goods ranging from flowers to pets. Once further precedents are established for virtual goods, both creators and vendors will need to adjust. The only thing that isn’t going to change is the momentum of virtual goods.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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