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| Chilling Effects Clearinghouse > Weather Reports > Second Life -- A Whole New World of Trademark Infringement? | 
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|  Second Life -- A Whole New World of Trademark Infringement?Sarah Adamczyk, Samuelson Law, Technology and Public Policy Clinic, UC Berkeley, October 27, 2006 Abstract: As the virtual world of Second Life continues to expand and more companies open virtual stores, the problem of trademark violations and counterfeit products takes on a whole new form. Last week, the population in the virtual world of Second Life [1] reached one million. Reuters recently opened an all-digital Second Life news bureau. Companies such as Reebok, American Apparel, Warner Music, Adidas, Toyota, Nissan, and IBM have also set up virtual stores in Second Life. The Second Life economy runs on Linden dollars, convertible to U.S. dollars, and, according to one estimate, has an annual GDP of 64 million USD. Second Life represents uncharted territory and, as the number of businesses operating in this virtual world increases, there is growing concern about the protection of IP rights. Like Google and YouTube, Second Life could be shielded from liability for copyright infringement through the “safe harbor” provision of the Digital Millennium Copyright Act (DMCA). As long as Second Life enacts the necessary policies for notice-and-takedown, banning repeat infringers, and registering a copyright agent, Second Life may be immune from the copyright infringement of SL users. Trademark violations, however, are an entirely different issue. The DMCA does not apply to trademark infringement and, while most service providers merely host trademark infringing material that would not be considered “in commerce” under the Lanham Act, the sale of knockoff goods in Second Life clearly constitutes business commerce. Any argument that Second Life could be protected under Section 230(c) of the Common Decency Act of 1996 must be tempered by the S.D.N.Y. opinion in Gucci America, Inc. v. Hall & Assoc. [2] In that case, the court held that ISP immunity under Section 230(c) was constrained by the language in Section 230(e)(2), which stated, “Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.” Since the DMCA was enacted two years after the CDA, the court found no legislative intent for Section 230(c) to provide immunity for all IP infringing activity since “[t]o find otherwise would render the immunities created by the DMCA from copyright infringement actions superfluous.” Second Life itself may be able to enforce trademark and copyright infringements through the “terms of service agreement” to which all residents consent. Though Second Life does not formally police for infringement, there are incentives for Second Life to limit trademark infringement. As big companies are opening shop in Second Life, few will invest significantly if they feel their trademark has been diluted through unlicensed products. It’s unclear what Second Life’s capacity is to enforce black market activity—with more than 10,000 residents active at any given time, there are as many means for selling knockoff goods in Second Life as there are in the real world. Ultimately, Linden Labs, the creator of Second Life, relies on the vigilance of SL community residents to monitor trademark and copyright abuses. Yet one boutique still sells a virtual reproduction of the entire Ikea catalog. Virtual computers with the Apple logo have been sold, without Apple’s permission. Residents walk the streets of Second Life wearing knockoff clothes and are solicited by black-market vendors selling entire lines of counterfeit goods. Linden Labs may not actively be seeking out offending material, but many of the infringing acts are so rampant and blatant that ignoring these abuses practically amounts to willful ignorance. [1] http://secondlife.com/
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