Bragging Again?

Another group of plucky plaintiffs have dusted off some of Bragg’s arguments and are squaring up for a tussle with Linden Labs.
After skimming the 64 page Action with a fine Italian red in hand my totally unqualified analysis of the basis of the action is: you’re having a laugh, right?

First the background: On 15 April 2010, the court of the Eastern District of Pennsylvania Philadelphia received an Action titled: “Carl Evans, Donald Spencer, Valerie Spencer, Cindy Carter, individuals, on Behalf of themselves and for the Benefit of all with the Common or General Interests, Any Persons Injured, and All Others Similarly Situated v. Linden Research, Inc., and Philip Rosedale"

The Action appears to have an accompanying web site (note: I’ve not independently checked the validity of the link between the site and the claim but have no reason to believe it is a hoax): http://www.virtuallanddispute.com/

According to this site: “The Complaint alleges that Defendants knowingly offered to sell the class members virtual land and the ability to acquire ownership rights in virtual property and then took the plaintiffs' property and did not honor the owners' rights in their property.”

My own summary of the case is that it is along some of the lines of the Bragg case, in that it is being noted that Linden and Rosedale made a set of public statements about Second Life and property ownership and that certain acts are antithetical to those statements.

In this case a specific is that the latest Terms of Service have a new clause in that states:

4.2 Second Life exists only as long as and in the form that we may provide the Service, and all aspects of the Service are subject to change or elimination.

Linden Lab has the right to change and/or eliminate any aspect(s), features or functionality of the Service as it sees fit at any time without notice, and Linden Lab makes no commitment, express or implied, to maintain or continue any aspect of the Service. You acknowledge that your use of the Service is subject to this risk and that you knowingly assume it and make your decisions to participate in the Service, contribute Content and spend your money accordingly.

(source: http://secondlife.com/corporate/tos.php, retrieved on 22 April 2010)

It appears to be suggested that in agreeing to these conditions there is a material change to a user’s property interests. Moreover it’s being noted that the change was made unilaterally by Linden and that users had to accept this if they wanted access to SL.

People might want to note TN’s previous coverage of the Bragg Case:

The Droids We're Looking For?
http://terranova.blogs.com/terra_nova/2006/06/the_droids_were.html
Bragg v. Linden 2.0
http://terranova.blogs.com/terra_nova/2006/10/bragg_v_linden_.html

So much for facts…

There seem to be two underlying principles here:
1. The relationship between public statements and the contract that users agreed to with Linden Lab
2. The nature of the property interests that users have in Second Life

But, the first and I guess main problem I have with this is – nothing new has happened, there are no new arguments, there’s nothing to see, move along and mind how you go.

On the first of these points, what we might term Flim Flam vs Contract there is a matter of law that the legal types here will have to inform me of about the relative weight of a marketing statement vs a contract. My uninformed view is that what ever the marketing says if you then enter into a contract then you are signing up to that agreement. Now, if one is a consumer there are all kinds of protections that one might look for (and indeed get over here in the EU), however – in this case we are talking about a group of people who’s very case is based on them investing money into a service. Thus as a B2B transaction you would think that they might have had a lawyer read over the service contract they were entering into. But hold that thought and let’s look at the second point…

This seems to me to be the key point at issue here – what does property in Second Life mean. The thing is that this has always been a vexed question. Since the very day that Linden announced the Terms of Service (like other TN’s I was there) people immediately asked: Hold on if I have rights to this what happens if I can’t access it.

What’s more Linden have traditionally had the following clause (or a variant) in their contract:

4.3 All Data Is Temporary. When using the Service, you may accumulate treasure, experience points, equipment, or other value or status indicators and contribute to the environment ("Accumulated Status"). THIS DATA, AND ANY OTHER DATA RESIDING ON LINDEN'S SERVERS, MAY BE RESET AT ANY TIME FOR ANY OR NO REASON. ALL CHARACTER HISTORY AND DATA MAY BE ERASED IN WHICH CASE EACH CHARACTER MAY BE RESET TO NOVICE STATUS. YOU ACKNOWLEDGE THAT, NOTWITHSTANDING ANY COPYRIGHT OR OTHER RIGHTS YOU MAY HAVE WITH RESPECT TO ITEMS YOU CREATE USING THE SERVICE, ALL OF YOUR CONTENT AND ACCUMULATED STATUS HAS NO INTRINSIC CASH VALUE AND THAT LINDEN DOES NOT ENDORSE, AND EXPRESSLY DISCLAIMS (SUBJECT TO ANY UNDERLYING RIGHTS IN THE CONTENT), ANY VALUE, CASH OR OTHERWISE, ATTRIBUTED TO CONTENT OR ACCUMULATED STATUS.

The above is from the 2003 ToS.The 2010 version reads:

4.3 [..]
You agree that Linden Lab has and may exercise the right in its sole discretion to pre-screen, refuse, or delete any Content or services from the Service or disable any user's access to the Service without notice or liability to you or any other party, including upon our belief that such user's conduct, Content, services, or use of the Service is potentially illegal, threatening, or otherwise harmful to any user or other person or in violation of our Terms of Service, Community Standards, or other policies.

My point here is not that this is in the contract – but that everyone knows it’s in the contract. This is, it is a well known and well debated clause. The question with Second Life has always been – given that data can be deleted at any time what is the nature of the risk that you run by investing in it. And from a legal point of view – what entitlement do IP rights give you to digital artifacts. As far as I’m aware settled opinion on this latter point has been – none.

You want to know how early this was discussed?

On 14 November 2003 Dan Hunter live blogged the announcement made by Rosedale at State of Play:

Second Life Announcement
http://terranova.blogs.com/terra_nova/2003/11/second_life_ann.html

Look at the second comment posted about and hour after the announcement by our very own Unggi Yoon:

"Is'nt the revised section 5.3 of SL TOS faded by the section 4.3 of the same TOS?

------------------------------------------
4.3 All Data Is Temporary. […]”

So, some people entered into a commercial contract that had a well known inherent risk. The contract has now changed though, in my view, the change has no material impact on the practical expression of property rights one has or business risk of using Second Life.

So, what’s this case about again?

Comments

[Ciaran Laval]

1.

This whole case has the potential to open one of the biggest can of worms to ever hit a virtual world. If they win, all sorts of other implications are opened up, such as the European distance selling laws, tax obligations and it would re-ignite the VAT arguments.

However, as you rightly point out, nothing has really changed, so I'd hope that this will be recognised and the case will crash and burn.

[Fleep Tuque]

2.

More interesting to me is the change in their Third Party Viewer policy that now restricts your ability to EXPORT the content that you "own" from Second Life.

Though the clause you mentioned has always been in the ToS, the fact that your data could disappear at any time was somewhat mitigated by the fact that you could export it and re-import into OpenSim or some other SL-like simulation.

As of April 30th, however, the new Third Party Viewer policy places restrictions on what can be exported from Second Life, namely you must be listed as the "creator" of an object, which may on its face seem reasonable, but for many reasons is not actually practical.

For one, it ignores the licensing provided by some content creators that explicitly permits export of their "full permissions" items (usually indicated in a notecard, in SL terms), so content a user creates using any component pieces created by others cannot be backed up now.

And for enterprise or institutional users (like my university), this means we cannot backup content that should theoretically be owned by the university rather than the staff being paid to create it since most builds are created by multiple staff members.

I think that would have been a meatier argument, perhaps. But maybe not, I'm certainly not a lawyer!

[King Reggin]

3.

I hope everyone involved in this goes bankrupt, since they should have gotten a first life before their second one.