Journal of Law, Information and Science
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TANIA SU LI CHENG[∗]
Imagine you have just won the Euro lottery jackpot (in a rollover week). You can design and build a mansion, own a wardrobe consisting exclusively of Prada bags, Hermes scarves and Gucci shoes and own a fleet of Ferraris, Porsches and other luxury sports cars. You can drive downtown (or indeed have a chauffeur drive you) in your Lamborghini Gallardo Spyder to meet your pals at an exclusive club, where you puff on your collection of Cohiba cigars and savour Remy Martin from a Baccarat glass. These days, even if you are not the lucky recipient of a lottery win, these branded luxuries (and chauffeur) can be virtually yours if you simply take up ‘residence’ in a virtual world, the latest Internet spawned runaway phenomenon.
Apart from possessing virtual equivalents of material goods, you can also participate in hang-gliding, attend language classes and down a virtual pint at your virtual local. On your drive back from the pub however, you may also be virtually stalked and virtually assaulted. You can cheer yourself up by indulging in virtual retail therapy. You might even get to wed another avatar in virtual land. You might notice that there are virtual street vendors flogging ‘knock-off’ versions of designer apparel and choose to buy from them.
The potential legal issues that pervade the scenario described in the above paragraphs should leap out at any law undergraduate accustomed to working out solutions to hypothetical legal problems. There are issues relating to inter alia property rights, assaults, drunk-driving and of course potential intellectual property problems. But like the law student’s hypothetical legal problem, these acts of assault, drunk-driving and IP infringements are not real. They exist only in cyberspace. The question is whether such legal problems are sufficiently substantive to warrant a real claim in a real court of law and whether the current law provides a solution to these problems.
The notion that recent explosive advances in technology continually outstrip developments in the law is not uncommon and there are arguments for adapting traditional legal principles to new technology.[1] But there have also been calls for some sort of bespoke cyberlaw. One of the most influential legal minds in the world, US judge, Richard Posner, appearing in a virtual seminar hosted in Second Life, has declared that
The way law historically develops is from custom. I can imagine customs emerging from interactions among avatars, and then Linden [developers of Second Life] codifying the customs, as laws, that seem best to regulate the virtual world.[2]
Eventually, Judge Posner foresees, there will be an ‘international law of virtual worlds’.[3]
This article will focus exclusively on intellectual property legal issues, namely copyright and design right issues, in answering the questions posed above. While emphasis is placed on UK law, references will be made to US copyright law as most reported cases in this area have occurred in the US. In particular, this article will be centered on IP issues as they occur in the massively popular Second Life, for the main reason that unlike other virtual worlds, Second Life allows its users to retain their intellectual property rights in anything they create.
Before endeavouring to investigate the above legal issues, it is helpful, even necessary, to understand the historical background to the concept of ‘virtual worlds’ and to also understand what virtual worlds really mean to their users. These perspectives are discussed further below. This in turn would help establish why intellectual property rights in particular are so important to virtual world citizens, and therefore why it is important to take intellectual property rights in virtual goods seriously, bearing in mind Lockean theory:
Though the Earth, and all inferior Creatures be common to all Men, yet every Man has a Property in his own Person. This no Body has any Right to but himself. The labour of this Body, and the Work of his Hands, we may say, are properly his. Whatsoever he then removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with and joined to it something that is his, and thereby makes it his Property …[4]
This article will then discuss briefly the many various arguments that have arisen in the debate over property rights disputes between developers and players, but only to the extent of fleshing out the theory that all things considered, players should be entitled to property rights, in particular intellectual property rights, in virtual worlds. As at the date of writing, apart from Second Life, most virtual world end-user-licence-agreements (EULA) stipulate that intellectual property rights in anything created within the virtual world belong to the developers. Some academics however argue that because players treat virtual worlds no differently from this world and have expectations that real law applies to their virtual worlds, there is a strong argument for saying that the law of property should apply equally to virtual worlds.[5] Essentially, these same academics argue that the EULA governing terms and conditions of residence in virtual worlds, have been demonstrated to be unfair in their allocation of rights, given the general expectations of players. Others however argue that objects in virtual worlds are purely fictional.[6]
This article will not explore the above arguments in detail – rather, its aim is, after accepting that players do deserve IP rights in their creations, to question the imposition of real world IP rights on virtual world goods. In other words, if there are IP rights subsisting in the virtual world, what form do these rights take and do they sit comfortably and satisfactorily within the virtual world? Definitions within traditional real world IP law cover real world works and objects. Do they fit virtual world equivalents?
Where Second Life is concerned, the dispute over property rights between developers and players should not really come into play as Second Life has resolved this to some extent (not enough according to Glushko in his analysis of Bragg v Linden)[7] by stating that property rights, including intellectual property rights, are retained by its players in its terms of service. This is why this article will not consider the arguments for and against granting IP rights in the virtual world to players. But, even if we accept that intellectual property rights do belong to players, what does owning intellectual property rights in the virtual world really mean? Suppose we accept that players are able to own property in virtual worlds and possess intellectual property rights in things they create, what then would be the subject matter of disputes between players? One such dispute has already arisen: Eros LLC v John Doe aka Volkeo Cattaneo, which is discussed below.
As will be seen from the discussion that follows, intellectual property rights can go some way to protecting a player’s rights. If his avatar composes a poem, it is the result of the player’s mental creativity and is clearly protectable as a literary work under copyright law. The same goes for musical compositions and dramatic works. However, the legal position is not as satisfying for works which do not fall within the aforementioned categories. If a player designs dresses, kettles or cars for sale within Second Life, it is arguable that they are protectable as artistic works. However, they are artistic works because they are graphical representations of his dresses, kettles or cars. In themselves, kettles, dresses or cars are generally not protectable as artistic works under copyright law. By allowing kettles, cars and dresses to be protected as ‘artistic works’ in the virtual world, this grants them rights which are not even recognised in the real world. How about virtual buildings and bridges? Buildings are ‘works of architecture’, protectable under the Copyright, Designs and Patent Act 1988 (UK) (CDPA).[8] Are virtual buildings protected as graphic works or are they considered works of architecture?
Even if we readily accept that copyright resides in virtual goods, the difficulty lies in establishing infringement. If it is accepted that a virtual car is an artistic work and another similar/identical virtual car appears on the scene, there may only be copying of the ‘look and feel’ of the virtual car, not the underlying code. This is the problem that arises from treating in-game goods as merely graphical representations and computer code, not as what players actually perceive them to be, i.e. actually a car in a virtual world.
Further, recognising copyright protection in virtual goods which are designed or created by players in-game ironically gives more rights to the virtual designer than the real designer. As will be seen below, a huge number of people reside in Second Life making real money designing a whole array of virtual goods for sale to other avatars: clothes, watches, furniture etc. If any of their designs were to be copied in Second Life, the dispute will be taken to a real bricks and mortar court. What is the likely basis for such a claim? A disgruntled virtual designer could claim copyright infringement of the visual/graphical representation (an artistic work) of his virtual designer chair or dress. In the real world, a real designer of a real chair or dress would face difficult obstacles in claiming copyright infringement, which will be discussed below. Essentially, the virtual designer has greater rights than the real designer if they were to bring similar claims to a real court of law.
This is a serious question because the designing of virtual goods for sale is serious business involving not Monopoly money but real greenbacks. Creative residents make use of Second Life 3-D modelling tools and scripting language to design and create virtual products to sell on to other avatars in Linden dollars (the currency in Second Life), which can be exchanged for real US dollars.[9]
This means that online versions of televisions, handbags and cars, consisting in reality nothing more than a handful of pixels and computer code, can be worth real money. As at July 2007, there were 12.5 million transactions involving real money which took place in Second Life.[10]
Perhaps what is needed is a virtual intellectual property law, not unlike that envisaged by Judge Posner, an area of law which serves to recognise in-game objects and creations for what players truly believe them to be. In other words, a virtual upholstered armchair is not just a handful of computer codes to players but an upholstered armchair which serves its purpose as one within the virtual world, in which case, perhaps it is more fitting to consider it as a work of artistic craftsmanship.[11] If a virtual world is perceived as an alternative or parallel world, as will be seen below, the time has come for an alternative version of intellectual property law, which affords the necessarily identical rights to both real and virtual designers but equal treatment to both.
So, what is a virtual world? It is also known interchangeably as virtual landscape, virtual space and virtual environment,[12] which is defined in Webster’s New Millennium Dictionary of English as a
a computer-generated, three-dimensional representation of a setting in which the user of the technology perceives themselves to be and within which interaction takes place; also called virtual landscape, virtual space, virtual world.
One of the most popular virtual worlds is Second Life,[13] an online ‘universe’, launched in 2003 by Linden Research Inc. (‘Linden Labs’), which an Internet user can enter (after registering for free at www.secondlife.com), create an online personality known as an avatar,[14] build anything he wishes (anything means anything in the online universe, from virtual flat-pack Ikea style garden furniture and basic 4-slice toasters to steam engines and spacecraft), meet other avatars (representing real persons who may be geographically far removed from one another in the real world) in schools, restaurants and offices, and sell anything (again, anything means anything here in the online world) to other resident avatars. The last activity utilises Second Life currency, Linden dollars (L$) which can actually be exchanged with US dollars by residents using their real credit cards on online currency exchanges.[15] As this involves real money, Second Life has caught the attention of serious business pundits and so far, everyone appears to take this money making venture seriously.[16] In November 2006, Second Life produced its first millionaire (in real US dollars) who built her fortune on virtual real estate.[17] Just as it is possible to make real money, and indeed become a millionaire, in Second Life, it is also as possible to lose real money.[18]
Second Life and similar virtual worlds are centred on mimicking real life as far as possible, similar to the hugely popular computer game, The Sims, in which players can customise their in-game persona and lead a computerised version of regular urbanised life. The in-game character does everything any of us would normally do on a day to day basis: he eats, sleeps, showers, brushes his teeth, reads the newspaper and goes out to work. Each and every of these mundane actions are controlled by the player, and each action or non-action may influence circumstances in the game (e.g. failure to empty the bins results in a plague of virtual flies!) and the development of the character’s ‘life’ within the game.
There are also other virtual worlds which do not attempt to mimic real life. These are frequently set in fantasy worlds populated by typical characters from established fantasy lore e.g. dwarfs, giants, trolls and the ubiquitous knight in shining armour. Examples include World of Warcraft and Everquest.[19] Players take on any role they like and embark on various quests. Again, players can buy, with real money, a host of features, weapons and superpowers for their online persona.
The concept of cyberspace however is not new, and was popularised during the early 1980s when science fiction writers developed the subgenre of cyberpunk fiction, which involve computer controlled or computer based societies.[20] In cyberpunk fiction, the boundaries between actual and virtual realities are blurred, much of the action centred on conflict between artificial intelligence and mega corporations. While cyberpunk fiction nourished the concept of cyberspace, it can be argued that the concept actually germinated with the advent of multiplayer networked games, even before the Internet took on its present familiar form.
The first of these games, Maze War, written in 1973, was the very first game which was playable by two or more persons using networked peer-to-peer computers.[21] In 1974, players whose computers were connected to ARPAnet (the precursor to the Internet) could connect to MIT’s server and play the game. This was a virtual world of sorts realised for the first time. Going further back in history, it is arguable that the concept of ‘virtual worlds’ as we understand it today, probably has its origins in JRR Tolkien’s The Hobbit (published 1937), in which he conceptualised Middle Earth,[22] a world apart from the real world and in which readers could immerse themselves and believe.
Apart from books such as The Hobbit and other fantasy/science fiction novels, there was also the development of so-called interactive fiction books, where the reader is given choices he can make to determine the outcome of the plot. These books have a computer-based equivalent: interactive fiction adventures,[23] which are usually text-based games in which a written narrative describes an environment, the images of which have to be imagined by the player and the player interacts with this environment by typing out instructions on the computer to decide what his character should do next. The player’s instructions determine the outcome of the game to a certain extent. A text-based game may be fairly open-ended or take on a more linear plot, which is predetermined by the game’s creator. In either case, the player’s actions and decisions may certainly influence the environment of the game and outcomes.
Virtual worlds like Second Life and others may similarly be manipulated by persons logging on – he or she can determine what to do next and create or buy, as already indicated above, a whole array of virtual things. Furthermore, such creations and actions have a more or less permanent effect on the virtual environment, just like how we affect our own real lives and the environment we live in by our actions and the choices we make. Unlike games like Maze War and its more sophisticated descendants, computer games like The Sims and text-based adventure games as described above, virtual worlds like Second Life continuously exist even after the player has logged out; in other words, life in the virtual world carries on, regardless of the player’s presence, and time passes as it does in the real world.
Another important difference between virtual worlds like Second Life and games is that Second Life and similar worlds, including those fantasy worlds described above, are open-ended to a far greater extent. There are no plots to follow or end-goals or points/levels to achieve, and to that extent, Second Life, although occasionally referred to as just another game, is not quite one.
Therefore, the idea of a virtual world has been around for a long time and is deep-rooted. By virtue of the fact that it is now realisable by simply logging onto the Internet, the term is synonymous with any environment which is computer-simulated. The central theme that runs through the various kinds of virtual worlds, from books like The Lord of the Rings to text adventures and finally to sophisticated online worlds is the notion of immersion in another world or conversely, the ability to escape from reality to a certain extent and have control over another and better life.[24] Cyberspace has been described as not a substitute for the real world but a ‘parallel universe’ in which people escape to, lead a separate life, which is sometimes regarded as even more important and relevant than ‘real’ life.[25] This notion explains to some extent the phenomenal popularity of virtual worlds such as There and Second Life. In these alternative virtual worlds, people can escape the everyday drudgery of their real lives and problems, and enjoy control over an alternative life. Certainly There and Second Life allow people to experience and exercise such control to a far greater extent than was ever possible to achieve in books and computer games.[26]
Second Life, There and Active Worlds are alternative worlds in which real people go to work, live, meet other people and even marry. Real countries may even open embassies in these virtual worlds and indeed, the Maldives is the first country to have opened an embassy in Second Life.[27] Real life multinational companies like Toyota, Nike and General Motors have also set up a presence in Second Life, selling virtual cars and shoes. Famous designer brands too have established virtual shops.[28] There and Second Life are therefore just like our world, but only better because users have almost infinite control over their virtual lives. Users form meaningful relationships online with other users and with their virtual property. Understanding this appeal makes it in turn easier to comprehend why millions of Internet users have invested time, effort and real money into creating and maintaining their virtual lives. Unlike fantasy virtual worlds which target the gaming community, the appeal of Second Life and There is more universal, by virtue of the almost ‘real’ and more importantly, familiar experiences these worlds offer.
As mentioned above, people make a living off trading virtual goods for real money, which underlines the necessity for recognising virtual goods in the same light as real property. However, this is not the only argument for treating virtual property no differently from bricks and mortar property. Where players do not engage in virtual worlds for the purpose of trading virtual goods to make money as they might do in Second Life, they nevertheless still regard the acquisition of virtual property in the same light as the acquisition of real goods, even in the fantasy virtual worlds, such as World of Warcraft, which obviously bear little resemblance to real life. The notion stems from the fact that many of these players have invested not only real money but a great deal of their time and skills in acquiring their virtual property. Regardless of whether the players deem their fantasy world as good as the real one or whether they intend to or are even permitted to trade off or sell their virtual goods, the point is that they have expended tangible items, time and money, for these virtual goods.
An example of how virtual players in fantasy worlds regard their virtual goods as personal property is illustrated by a case which came before the Beijing courts in 2003. A Chinese player who had his virtual weapons ‘stolen’ on an online computer game called Hongyue (‘Red Moon’), owing to flaws in the servers supporting the game, took the company behind Hongyue to court and demanded restitution.[29] Hongyue is an online game in which the primary purpose is to engage in combat, not to trade in-game items for real cash.[30] However, when questioned about what his virtual weapons meant to him, he replied ‘I exchanged the equipment with my labour, time, wisdom and money, and of course they are my belongings’, which demonstrates the attachment players have for their virtual property. Dismissing the company’s argument that the virtual weapons are nothing but a bunch of codes, the court ordered restitution of the virtual weapons. On a more tragic note, but no less instructive of how online players feel about their virtual properties, another Chinese player killed a fellow gamer over the theft of his virtual sword when the police refused to take action.[31] As a result of these events, lawyers in Chengdu submitted a proposal to the National People’s Congress, arguing that legislation should be put in place to protect virtual property.[32]
Another important factor that lies in the immense popularity of these virtual worlds is the notion of rivalrousness, a feature of virtual worlds which has been identified by academic writers, and which is a feature of real physical property.[33] This feature lies in the ability of users to restrict access to the virtual property they control, in the same way a landowner can physically and legally exclude others from entering their land.[34][35]A combination of these elements discussed above: (i) rivalrousness, (ii) the belief that virtual worlds are parallel worlds, (iii) the relationships formed with other people online and virtual property, and the (iv) considerable labour and money that people invest in the creation of such works, all underline the argument that property rights should vest in the people who go online and not the developers, which has been explored and discussed at great lengths, as already mentioned above.[36]
Having accepted that there are strong arguments for the recognition of property rights in virtual worlds, it is necessary to investigate if established property theories and principles apply to virtual goods. Numerous academics have already closely analysed how the various concepts of property, ownership, contract, unfair competition and governance as we commonly understand them, apply in the context of a virtual world environment.[37] Dan Hunter and Gregory Lastowka for example have argued a strong case for the recognition of virtual property as real property.[38] In their article, they underline their case by firstly engaging in a comprehensive and thorough expose of virtual worlds before considering the application of established property theories, and they finally conclude that these theories provide strong normative grounds for recognising property rights in virtual goods.[39]
Other academics argue for recognition of rights and concepts which are unique to virtual worlds. Fairfield argues strongly for a theory of virtual property highlighting examples of certain regimes which have begun to recognise virtual property, such as Taiwan and China,[40] while Grimmelmann at the outset treats virtual societies as genuine societies in their own right, which are unique and different from the real world and examines the laws and concepts unique to and existent in these societies.[41] One of the many points he makes is that rules on property rights in-game are wholly dependent on the complexity and flexibility of the underlying code – while there is a great extent to which virtual worlds can mimic the real world, they are necessarily limited by what the programmer does or is able to do with the software code. For instance, while we can control who may or may not enter our real world territory (from relatives and friends to delivery men and Jehovah’s Witnesses), whether a player may enter the virtual abode of another player depends on what the game allows him to do, which in turn is dependent on the software code. Virtual worlds are not sophisticated enough to account for the subtle nuances in how people actually interact with each other and their property in real life, and the discretion which humans have in conducting their affairs. The end result is that in-game rules of property are necessarily more definite and certain than that in the real world because they are restricted by what the programmer does with the software.[42] There are also concepts unique to virtual worlds such as Ninjalooting and Kill Stealing, which may be governed by the EULA but are in any case concepts which are part of virtual world etiquette.[43]
For the purposes of this article, the above arguments contribute to emphasising the importance of property rights, and more specifically Intellectual Property rights to players in virtual worlds. Be that as it may, just how substantive are these rights? Do current intellectual property rights properly cater for the type of goods which are created in-game?
Second Life brings the notions of control, meaningful relationships and rivalrousness to a far greater extent than other virtual worlds as it was the first (and at writing, the only) virtual world to allow its users to retain property rights, including IP rights, over virtual goods they create. As stated above, in most virtual worlds, IP and other property rights which subsist in anything created by players online generally vest in the developers,[44]
and are governed by end-user licence agreements. Disputes concerning breaches of such agreements have arisen between developers and players e.g. Black Snow Interactive v Mythic Entertainment,[45] Marvel Enterprises v NC SoftCorp.[46]
Second Life is an exception in that all intellectual property rights are retained by users. Its Terms of Service contains the following clause:
Users of the Service can create Content on Linden Lab's servers in various forms. Linden Lab acknowledges and agrees that, subject to the terms and conditions of this Agreement, you will retain any and all applicable copyright and other intellectual property rights with respect to any Content you create using the Service, to the extent you have such rights under applicable law.[47]
So players retain their intellectual property rights. All fine and good but what does this really mean? As seen from the brief discussion in the Introduction above, when players believe that they own property in their virtual worlds, they believe that they own a virtual car or virtual dress, not a mere graphical representation of a car or dress, which is what they are really.
What about the virtual designer of the car or dress (using software provided by the developers of the virtual world)? Does copyright then subsist in the car or dress and belong to the virtual designer? Copyright subsists in only certain types of works, namely, literary, dramatic, musical and artistic works.[48] If viewed as merely graphical representations, then perhaps it is arguable that the graphical representation of the car or dress could be artistic works, and prima facie protectable by copyright. Even so, if a player’s creativity is limited by the in-game tools, it is arguable that where there are limited ways of artistically expressing an idea, the expression and idea merge, thus preventing copyright from attaching.[49]
However, the reality (ironical to use this term in the context!) is that players regard their virtual car or virtual dress as good as a real car or a real dress. If Second Life mimics the real world, then what we should really be concerned about is protection over the virtual car or dress, not just a visual representation of the same. By regarding virtual goods as artistic works, we are stretching the concept of ‘artistic work’ as understood under copyright law to include things like cars and dresses. But under copyright law, cars and dresses do not qualify as literary, dramatic, musical or even artistic works. In the UK, the concept of artistic work takes on a very traditional meaning: it is defined under s.4 CDPA 1988 as a graphic work, photograph, sculpture or collage, a work of architecture or a work of artistic craftsmanship. What is protected is copyright in the graphical representations of cars, dresses and other objects in the virtual world, not copyright in the virtual car, virtual dress or other virtual object. Indeed there is little dispute over this. Computer generated graphics have been held to be artistic works.[50] But it is not legally satisfying because players in the virtual world do not regard their virtual goods as mere pixelated images.
The same questions can be posed where virtual buildings and bridges are concerned. Buildings are ‘works of architecture’ protectable under the CDPA.[51] Are virtual buildings graphic works or are they works of architecture? The point is that when virtual worlds are being taken so seriously, as seen from the discussions above on the historical background of the concept and on the psychology of in-game players, then real world law should not impose real world definitions on virtual goods, in other words copyright law should regard the virtual car as something more substantial than a group of computer generated pixels.
Perhaps it may be more appropriate to regard such creations as designs? In the US, designs may be registered for the ornamental aspects of functional objects and protected as a Design Patent.[52] Any object that does not have any practical utility is more appropriately protected by copyright law, if it meets the requirements. While the US Patent and Trademark Office (USPTO) has traditionally regarded pictures or photographs in themselves to be inappropriate subject matter for a design patent, in other words, they must be part of an ‘article of manufacture’ to fulfil the functionality requirements,[53] computer screen icons have been protected as long as they are associated with a computer screen, monitor or some visual display device.[54] In the virtual world, virtual functional objects such as cars, dresses and corkscrews serve their respective functions to some extent.[55] A novel design in such objects in the real world would prima facie qualify for protection in the US. But what is the virtual car regarded as in the real world? It’s a mere graphic representation, once again. On its own, traditional practice of the USPTO would be to reject the application. But even though the virtual car can be perceived only on a computer screen, it would be stretching it to say that a virtual car is associated with computer screens or other similar display units, in the same way that computer screen icons, such as the Apple trash can, are associated with computer screens.
In the UK, designs are protected in a bewildering number of ways: they can be registered under the Registered Designs Act 1949 (RDA), unregistered (under the CDPA 1988) or protected under the European Community systems as either registered or unregistered community designs. The definition of a registered design is ‘the appearance of the whole or part of a product resulting from the features of, in particular, the lines, contours, colours, shapes, textures or materials of the product or its ornamentation’,[56] and for UK unregistered design, ‘the design of any aspect of the shape or configuration (whether internal or external but excluding surface decoration) of the whole or part of an article’.[57] The difficulty faced by virtual designers is the references to ‘product’ and ‘article’. ‘Product’ is ‘any industrial or handicraft item other than a computer program; and in particular includes packaging, get-up, graphic symbols, typographic typefaces and parts intended to be assembled into a complex product’.[58] ‘Article’ is not defined within the relevant Act. The concepts of ‘articles’ and ‘products’ suggest 3-D objects in the real world. The products in virtual world are, according to real world standards, merely pictorial representations.
In any case, it may suit the virtual designer to have his works protected as copyright works, even if his works qualify for design rights and even though design rights offer a true monopoly i.e. unlike copyright, where independent creation is a defence, it is not a defence to infringement of registered designs or US design patents (although necessary for unregistered designs). The reasons are as follows:
Copyright terms are long: 70 years plus life of creator (in US and UK), compared to UK and US design laws. In contrast, the US design patent lasts for 14 years from date of issue and the UK registered and unregistered designs last for 25 (renewable every 5 years upon payment of a fee) and 15 years respectively.
Further, copyright is free, arising upon creation of the work in question. Registration of the US design patent and the UK registered design right cost money. For example, the basic filing fee for a design patent for a single design in the US is US$200,[59] not including miscellaneous expenses such as search fees (US$100), the issue fee (US$800) and legal costs. Basically, registration of a single design can cost a few thousand dollars, which is prohibitive for the average virtual individual designer. Furthermore, this is a lot of money for attempting to protect something which might not necessarily be commercially successful. The UK unregistered design right may be free but it does not grant a true monopoly unlike registered designs. Its coverage is akin to that of copyright, and as copyright lasts for much longer period, why depend on the unregistered right?
As already observed above in the introduction to this article, the real designer faces more disadvantages in a real court of law than his counterpart in the virtual world. Firstly, while not impossible, it is very difficult to claim protection of designer chairs or dresses as works of artistic craftsmanship. Chairs, knitwear, blankets and capes have all been rejected in the UK.[60]
Secondly, if the work is protectable as a design, the ways in which any copyright subsisting in the work may be infringed is severely limited under UK law.[61]
Thirdly, if the real designer’s claim is restricted to design right, the duration of design rights, compared with copyright’s 70 years plus life of creator, is very short indeed: 15 years for unregistered design rights or 25 years for registered design rights. Real designers do not fare well when compared to their virtual colleagues in a dispute.
The inadequacy of the law can be illustrated in IP disputes between avatars. Just such a dispute has already arisen in Second Life. In July 2007, a virtual bed, called the SexGen bed, which is designed to allow avatars to engaged in virtual intimate relations, was at the centre of an infringement suit brought in the US by Eros LLC, a real company in the business of adult entertainment, against an avatar named Volkov Catteneo.[62] Volkov’s real name was unknown at the time of the suit and was named in the suit as John Doe. It has since emerged that he was one Robert Leatherwood of North Richland Hills, Texas.[63]
Kevin Alderman, CEO of Eros LLC and creator of the bed, claimed that Volkov had infringed copyright in the bed by creating and selling a virtually identical virtual bed. Whilst Eros’ bed retailed in Second Life for L$12,000 (US$45), Volkov’s ‘knock-off’ pieces were offered for just S$15 each. The writ stated that Eros’ products ‘have built a reputation within Second Life for performance, quality and value’ and that the company has been damaged by the diversion of sales. Apart from claiming copyright infringement, breach of Linden Labs’ terms and conditions, Eros also claimed infringement of its trademark SexGen, which was filed for registration after the activities complained of, and unfair competition.
Disregarding trademark infringement and unfair competition, essentially, in a real world court, Alderman/Eros claimed infringement of copyright in a picture of a bed. A painting, drawing and even a photograph (subject to originality requirements) of a bed may arguably qualify for copyright protection as an artistic work. John Doe’s graphical representation of the bed looks identical to Eros’ bed. But was it an artistic work for the purposes of copyright law? Both John Doe’s bed and Eros’ bed were, in reality, essentially bits of code. Certainly, in the real world court, this is what they would be regarded as and therefore be more likely to be considered as literary works (computer programs are protectable as literary works under US law), rather than artistic works, which are works protected under copyright law for their visual appearance. In considering the beds as computer codes (literary work) rather than as mere pictorial representations (artistic work) of beds, this comes closer to protecting the ‘look and feel’ interactivity or functions of Eros’ bed (it allows avatars to interact with one and another, unlike other beds in virtual worlds), not just the mere ‘look’ or visual appearance of the bed. The true value of Eros’ bed lies in its interactivity/function, not just its visual appearance.
Unfortunately, default judgment was entered as Leatherwood failed to enter an appearance and the case has since been settled out of court.[64] It is not known if Leatherwood had literally copied the coding for Eros’ bed, in which case there is literal copyright infringement, which presents far less problems than non-literal copying, which is treated differently in the US courts and UK courts. Without more facts at this juncture, it will be difficult to comment on the infringement issue in any detail. However, it suffices to say that having brought the suit in the US, Eros/Alderman would have had to contend with US copyright law in relation to computer programs. Generally, the US courts are not as sympathetic to copyright protection of the ‘look and feel’ of programs; in other words,[65] a case of non-literal copying has less chance of succeeding in the US than in the UK.[66] This is a problem which Eros/Alderman would have had to face if the matter had gone to trial.
Further, let us not forget that within Second Life, this infamous bed was more than just a pretty bed or computer code; it was a functioning actual bed for millions of its residents who wanted to engage in more intimate relations with fellow residents. In this regard, it would be interesting to see how a real designer of a real bed would fare in the real world. As observed above, it is difficult to claim that beds and similar objects are works of artistic craftsmanship. The real designer has to resort to design law but unless his bed is not commonplace in the design field,[67] or not purely functional,[68] would he then stand a chance of protection under the unregistered or registered design regimes in the UK? It is not suggested that the real designer does not stand a chance at all in protecting his product, only that he might find it more difficult than the virtual designer in doing so.
Second Life and other virtual worlds have not only allowed people to tap into their creative talents, they have correspondingly opened a Pandora’s box of challenges for intellectual property law and indeed other areas of law: criminal law for the virtual assault,[69] defamation for derogatory statements made about avatars,[70] etc Applying real world legal and social standards and definitions on a similar but not identical virtual world fails to acknowledge the relevance and palpability that virtual worlds have where their virtual residents are concerned. Virtual worlds are, for want of a better word, ‘real’ to these millions of residents, who live, work, play and make money. But not only does the law fail in truly acknowledging what virtual goods really mean to virtual residents when it applies real world standards, in doing so, the law potentially creates inequality between real world and virtual world creators. Ironically, as we have seen above, virtual world creators are treated better in some respects. Virtual creators should not be able to have their cake and eat it too. Parity of rights should be maintained between the real world and virtual one and this may be achieved by the formulation of bespoke laws for virtual worlds, as suggested by Posner.
Even if we find that our laws as they currently stand serve virtual worlds well, what law should we apply to disputes in-game? Although Second Life might in reality exist on the servers of Linden Labs in the US, this does not necessarily mean that US law is appropriate. With the territorial nature of intellectual property law and the global nature of Second Life which attracts virtual citizens who actually hail from all corners of the globe, there is a real scope for confusion and discord. It was not within the scope of this article to discuss jurisdictional issues on the Internet or more specifically within virtual worlds, but it suffices at this juncture to raise this potential problem.
This is yet another instance in which technology has marched ahead leaving the law in its wake. However, by the time the law has caught up with online virtual worlds and other technological advances, holodecks just like the one on the Star Trek Enterprise may well become reality and therein lies a real (or virtual?) challenge![71]
[∗] Lecturer in Intellectual Property Law, University of Glamorgan, Wales, UK. LL.M (University College London), LL.B (Leicester), Barrister (England and Wales), Advocate & Solicitor (Singapore).
[1] See for a discussion of the development of IP law in the digital age: Cornish, W. Intellectual Property: Omnipresent, Distracting, Irrelevant? (2004); Jones, L., ‘An artist’s entry into cyberspace: International Property on the Internet’ 16th Herchel Smith Award Public Lecture Queen Mary IP Institute 27 May 1999 [2000] EIPR 22(2) 79; Christie A, ‘Reconceptualising copyright in the digital age’ [1995] EIPR 522.
[2] Au, W.J., ‘The Second Life of Judge Richard A Posner’ New World Notes (11 December 2006) http://nwn.blogs.com/nwn/2006/12/the_ second_life.html (accessed 28 April 2008).
[3] Ibid.
[4] John Locke, Two Treatises of Government (1690), Book II, Ch.V.
[5] Lastowka and Hunter ‘Laws of Virtual Property’ (2004) 92 Cal L Rev 1; See Lim Y.F., ‘Is it really just a game? Copyright and online role-playing games’ 1 (7) JIPLP 481; Glushko B., ‘Tales of the (Virtual) City: Governing Property Disputes in Virtual Worlds’ 22: Berkeley Technology Law Journal 507 discussing Bragg v Linden Res Inc No 06-08711 (Pa Ct Com Pl 2006); Schwarz and Bullis ‘Rivalrous Consumption and the Boundaries of Copyright Law: Intellectual property lessons from online games’ 10 (1) Intell. Prop. L. Bull. 13; Reuveni, E., ‘On Virtual Worlds: Copyright and Contract Law at the Dawn of the Virtual Age’ [2007] Indiana Law Journal 261 (concentrating on copyright).
[6] Bartle, R.A., ‘Pitfalls of Virtual Property’, The Themis Group (April 2004) http://www.themis-group.com/uploads/Pitfalls%20of%20 Virtual%20Property.pdf
[7] Glushko, above fn 5.
[8] Section 4(1).
[9] As of 9 September 2007, US$1 can be exchanged for L$266. See LindeX Market Data at the official Second Life website: http://secondlife.com/ whatis/economy-market.php (accessed 11 September 2007).
[10] Naone E., ‘Making Money in Second Life’ MIT Technology Review (14 August 2007) http://www.technologyreview.com/Biztech/19242/ page1/?a=f (accessed 28 April 2008).
[11] See real life case George Hensher Ltd v Restawhile Upholstery (Lancs) Ltd [1976] AC 64.
[12] Another term, Metaverse, was coined by author Neal Stephenson in his novel Snow Crash written in 1992, before such platforms were ever implemented. http://www.reference.com/browse/wiki/Metaverse (accessed: 10 September, 2007). Apparently the stated goal of Second Life, a virtual world, is to simulate a world similar to that of Stephenson’s Metaverse.
[13] Situated at www.secondlife.com. Other similar virtual worlds include There at http://www.there.com/?src=google_tk_vsims&gclid=CJCw7 cCj5I4CFRqsOAodQjWCRQ and Active Worlds, http://www.active worlds.com/ (both accessed 27 September 2007).
[14] An online persona created and assumed by an Internet user who wishes to have a presence in a virtual world. The avatar created can take on any appearance, human or non-human, and any variety of attributes. The character and look of an avatar may be, and frequently is, entirely divorced from its real life counterpart. Many avatars even take on superhuman powers in their online world.
[15] See footnote 9.
[16] Hof R.D., ‘My Virtual Life’ Business Week (1 May 2006) http://www.businessweek.com/magazine/content/06_18/b3982001.htm; Kirkpatrick, D. (Fortune Senior Editor) ‘No, Second Life is Not Overhyped’ (10 November 2006) http://money.cnn.com/2006/11/09/ technology/fastforward_secondlife.fortune/index.htm (accessed 29 September 2007); Corcoran E., ‘A Walk on the Virtual Side’ Forbes.com (4 December 2006) http://www.forbes.com/2006/12/03/second-life-online-oped-cz_ec_ 1204valleyletter.html (accessed 28 April 2008).
[17] Terdiman D., ‘Second Life Mints a Millionaire’ http://www.news. com/8301-10784_3-6138519-7.html (26 November 2006) (accessed 29 September 2007).
[18] Offman, C., ‘Even the Virtual Banks are in trouble’ National Post (24 January 2008) http://www.nationalpost.com/Story.html?id=258934 (accessed 28 April 2008).
[19] World of Warcraft is available at http://www.worldofwarcraft.com/ index.xml and Everquest is available at http://everquest.station.sony. com/ (last accessed 27 September 2007).
[20] The origins of the term ‘cyberpunk’ have been attributed to various science fiction authors, namely, Bruce Bethke, Gardner Dozois and most notably, William Gibson, among others. http://dictionary. reference.com/browse/cyberpunk (accessed: September 11, 2007).
[21] Colley, S. ‘Stories from the Maze War 30 Year Retrospective’ http://www.digibarn.com/history/04-VCF7-MazeWar/stories/ colley.html
[22] Tolkien, J.R.R., ‘The Hobbit: There and Back Again’ (1937).
[23] These games are still available to be played online. Douglas Adams’ The Hitchhiker’s Guide To The Galaxy has also been adapted for a text-based game of the same name.
[24] The psychology of players in virtual worlds has been widely discussed. One of the largest research projects into this aspect, The Daedalus Project, is currently being carried out by a Stanford University research student, Nick Yee. ‘On an aggregate level, the general categorization of why people play seems to be quite robust and can roughly be described as: 1) achievement, 2) socialization, 3) immersion, 4) vent/escape, 5) competition.’ http://www.nickyee. com/daedalus/archives/000777.php (accessed 28 September 2007).
[25] Gonchar and Adams, ‘Living in Cyberspace: Recognising the importance of virtual worlds in social work assessments’ Fall (2000) 36 Journal of Social Work Education 3.
[26] Online virtual worlds simulate alternative environments to a great extent, but not to the same extent of the experience afforded by virtual reality simulators, which use body tracking devices, spatial/audio input and head-mounted displays, and which are at present not in wide commercial use but frequently employed in medical therapy, trials and experiments.
[27] Page, J., ‘Tiny real island nation opens first real embassy in virtual world’ The Times, (24 May 2007) http://technology.timesonline.co.uk/ tol/news/tech_and_web/article1832158.ece (accessed 24 September 2007).
[28] Reuters, ‘Armani opens store in virtual world Second Life’ (26 September 2007) http://ca.today.reuters.com/news/newsArticle. aspx?type=technologyNews&storyID=2007-09-26T132600Z_01_HAR 648320_RTRIDST_0_TECH-ARMANI-SECONDLIFE-1-COL.XML& archived=False
[29] Reuters, ‘Online game in China wins virtual theft suit’ CNN (20 December 2003) http://www.cnn.com/2003/TECH/fun.games/12/ 19/china.gamer.reut/ The same company faced another suit the following year for a separate incident with similar facts. See Xinhua, ‘Online game company taken back to court for virtual theft’ www.chinaview.cn (11 February 2004) at http://news.xinhuanet.com /english/2004-02/11/content_1310083.htm (accessed 28 April 2008).
[30] Most online virtual games do not permit this; see for e.g. World of Warcraft Terms and Conditions at http://www.worldofwarcraft.com/ legal/termsofuse.html; Redmoon Licence Agreement Code of Conduct No. 8 at http://www.redmoonclassic.com/page.php?id=3 (both accessed 28 April 2008).
[31] BBC News ‘Chinese gamer sentenced to life’ (8 June 2005) at http://news.bbc.co.uk/1/hi/technology/4072704.stm (accessed 28 April 2008).
[32] Zhang T. and Daragh M., ‘Legislation Proposed to Protect Virtual Property’ www.china.org.cn (26 January 2004) http://www.china.org. cn/english/2004/Jan/85502.htm (accessed 28 April 2008).
[33] Schwarz and Bullis, above fn 5.
[34] Schwarz and Bullis, Ibid p512.
[35] It should be noted however that rivalrousness does not apply comfortably to Intellectual Property as Intellectual Property rights in a work does not necessarily prevent others from using that work for e.g. fair use in copyright law allows others to use the copyright work in a way that does not compete with or prejudice the original work. See Nicholas, J. ‘Swords, Shields, and Statutes: Common Law Property Rights and Limited Licenses Are Both Necessary to Protect Virtual Property’ Cyberlaw Seminar, Spring Semester, University of Iowa College of Law (31 March 2006) http://www. uiowa.edu/~cyberlaw/ cls06/papers/dlfinfin.htm#_edn59 (accessed 28 April 2008).
[36] See following for discussions regarding property rights in virtual worlds: Lim, above fn 5; Glushko above fn 5 513-515; Reuveni above fn 5; Bartle above fn 5; Schwarz and Bullis above fn 5.
[37] See Grimmelmann J ‘Virtual Worlds as Comparative Law’ (2004) 49 New York Law School Review 147; Adrian, A ‘Intellectual Property or Intangible Chattel’ (2006) Journal of International Commercial Law and Technology (2006).
[38] Lastowka and Hunter, above fn 5.
[39] Lastowka and Hunter, Ibid,.49.
[40] Fairfield, J.A.T. ‘Virtual Property’ (2005) 85 Boston University Law Review 1047.
[41] Grimmelmann J, above fn 37.
[42] Ibid 4-8.
[43] See post by Hillman, Thurston, who goes by the sobriquet of ‘Ratboy’ entitled ‘Guide D’Azeroth – Etiquette Guide’ at Ten Ton Hammer (10 December 2004) http://www.tentonhammer.com/node/26354 (accessed 28 April 2008).
[44] See for e.g. World of Warcraft End User Licence Agreement at http://www.worldofwarcraft.com/legal/eula.html (accessed 27 September 2007).
[45] Case No. SA CV 02-112 GLT, 10 May 2002, US District Court, California.
[46] Case No. 04 CV 9253 RGK 10 November 2004.
[47] Second Life Terms of Service http://secondlife.com/corporate/tos. php (accessed 27 September 2007).
[48] Berne Convention for the Protection of Literary and Artistic Works (1886 as revised). In the UK, see Copyright Designs and Patents Act 1988 (CDPA) s.1(1).
[49] A concept applicable under US copyright law. See Reuveni above fn 5.
[50] Nova Productions Ltd v Mazooma Games Ltd [2006] RPC 14.
[51] Section 4(1).
[52] 35 USC §171-173.
[53] In Re Schnell 46 Fed 2nd 203.
[54] Rockman H.B., Intellectual Property Law for Engineers and Scientists (2004) 205.
[55] Virtual goods fulfil their functions only to some extent because the virtual world is virtually but not exactly or entirely like the real world. Dresses clothe avatars but are not necessary for keeping one warm in a virtual world for instance. Cars are not essential for actual travel within the virtual world.
[56] Section 1(2) RDA; Article 3(a) CDR (Community Designs Regulations).
[57] Section 213(2) CDPA 1988.
[58] Section 1(2) RDA; Article 3(b) CDR.
[59] A 50% reduction may be applicable for entities which qualify for small entity status. Source: USPTO Fee Schedule FY2007.
[60] Examples of cases which have failed George Hensher Ltd v Restawhile Upholstery (Lancs) Ltd [1976] AC 64 (upholstered chair), Merlet v Mothercare [1986] RPC 115 (baby’s cape); Guild v Eskandar [2001] FSR 38 (knitted garments); Burke v Spicer Dress Designs [1938] Ch 400 (a ‘beautiful frock’ may not be work of artistic craftsmanship at p 408); Vermaat v Boncrest [2001] FSR 43 (patchwork bedspread).
[61] By operation of sections 51 and 52 CDPA 1988.
[62] Richards, J., ‘Second Life sex bed spawns virtual copyright action’ The Times Online 4 July 2007.
[63] The case has been settled out of court. See Duranske B., ‘Eros Reaches Settlement with Robert Leatherwood’ Virtually Blind (14 March 2008) http://virtuallyblind.com/2008/03/14/leatherwood-settlement/ (accessed 28 April 2008).
[64] Ibid.
[65] See Computer Associates International v Altai (1992) USPQ 2d 1241.
[66] See Cantor Fitzgerald v Tradition Ltd [2000] RPC 95 but also see Navitaire Inc v Easyjet Airline Co [2004] EWHC 1725 in which infringement of ‘look and feel’ claim was rejected.
[67] Section 213(4) CDPA 1988.
[68] Section 1C(1) RDA 1949.
[69] Jardin, X,’Second life griefers assault real estate millionaire Anshe Chung’ (21 December 2006) http://www.boingboing.net/2006/12/ 21/second-life-griefers.html (accessed 29 September 2007).
[70] Vastine, J. ‘Sex, Lies and Avatar Defamation?’ (24 January 2007) http://www.vtoreality.com/2007/sex-lies-avatar-defamation/403/
[71] Holodecks are, according to the StarTrek novels, due to be invented in the 2360s. See StarTrek.com glossary on Star Trek technology ‘Holodeck’ http://www.startrek.com/startrek/view/library/ technology/article/105222.html (accessed 28 September 2007).
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