Second Life News : Second Life Company Wins Legal Case Against Illegal Copying

March 19th, 2008  |  Published in Second Life News  |  4 Comments

SL entrepreneur Reporter Siggy Leominster


By Sigmund Leominster

In what can be a seen as a victory for Second Life designers against illegal product copying, Eros LLC has just reached a settlement with Robert Leatherwood, an SL resident with the name Volkov Catteneo,  accused of re-selling copy-protected versions of Eros’ SexGen bed. This sets a precedent for other SL entrepreneurs who have seen their work copied and then sold by unscrupulous third parties. The attorney representing Eros, Frank Taney, said, “We’ve reached a settlement. The terms include an agreement that Leatherwood will not do any more copying.”

This case started in July 2007 when Kevin Alderman, SL name Stroker Serpentine, filed a complaint against Volkov Catteneo in the District Court of Tampa, Florida. Alderman claimed that Catteneo had copied his SexGen bed that sold for L$12,000 and was selling it for L$4000. Alderman had employed the services of Francis Taney, an intellectual property attorney with Buchanan, Ingersoll & Rooney. Initially, he tried to reach a resolution by filing a claim of copyright violation directly to Linder Labs, but they responded by suggesting Eros should use the in-world abuse reporting system. Unable to obtain any satisfaction at that level, Alderman raised the stakes.

The suit was originally filed as a “John Doe” case, where the identity of the accused is unknown. Part of Alderman’s brief was to discover the real life identity of Catteneo. The original brief said that, “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 more specific “providers” were Linden Labs and PayPal, both of whom were subpoenaed by Taney to obtain records of identity and transactions. In an interview at the time with the Reuters news agency, Catteneo said, “I’m not some kind of noob. My name isn’t on file. I don’t even have a permanent address either.” But he refused to divulge his real name and location. He did, however, admit to having sold at least 50 of the beds via a third party in-world.

Using the subpoenas and a private detective, it took the Eros team four months to track down the real world identity of Catteneo. He turned out to be 19-year-old Robert Leatherwood who lived in North Richland Hills, Texas. Even after being identified, Leatherwood continued to protest his innocence, claiming that Alderman was looking at the wrong man. However, Leatherwood just recently admitted that he was, in fact, the Volkov Catteneo avatar. “You are correct in that we are the same person. I didn’t see a logical point in admitting my identity back in that time in order to help structure Stroker’s flimsy case in any way.”

Flimsy or not, the evidence was sufficient for Alderman and Taney to win the case against Leatherwood. The case was settled out of court for an as yet undisclosed amount of money. According to Alderman, “We [were] not going to sue him for a million dollars. I don’t want to crucify the guy. I’m trying to protect my income and my family.”

This is the first successful case of copyright infringement in Second Life and paves the way for other business owners to try seeking justice in cases of outright copying of products. According to lawyer Sean Kane, who has been involved in other virtual world cases, this process of intervention – subpoena Linden Labs, subpoena ISPs, then identify the real life individual – may prove a model for future cases.

However, it isn’t likely that all SL businesses will take this approach. Kane cautions that, “Just to identify someone in order to serve them, you’re easily talking upwards of ten thousand dollars.” Unless an individual is prepared to invest significant amounts of time and money, there is little that can be done against infringers.

Future application of real world legal practices to Second Life behavior is not as unlikely as some may think. In the February 2008 edition of the legal paper, The Metropolitan Corporate Counsel, Diane Duhaime, who heads the intellectual property and technology practice at Jorden Burt LLP, examines why corporate counsel should get involved with virtual worlds, such as Second Life.

Quoting from the article, Duhaime says, “It is estimated that each day in excess of $1 million USD worth of transactions take place in Second Life. Therefore, it is no surprise that the virtual economy of Second Life has resulted in trademark and copyright infringement lawsuits being brought in U.S. courts.”

SLentrepreneur will continue to monitor and report on future legal cases that affect the business community here in Second Life.


  1. Matt says:

    March 21st, 2008at 7:55 am(#)

    The thing that I have never understood, is why Linden Labs refuses to require that actual identities of its citizens be recorded? If SL is going to be used as a business platform, and wants fraud to be persued outside the community of Second Life, then I think they are beholden to at least confirm the identities of their residents so that other residents may subpoena them easily and pursue legal claims against them. As long as the scammers and griefers and malcontents in SL believe that they are essentially above the law, there will continue to be no regard for intellectual (or any other kind of) property. I don’t think that Linden needs to be involved in any other capacity, though.

  2. Piracy EFF » Blog Archive » Second Life News : Second Life Company Wins Legal Case Against … says:

    March 22nd, 2008at 7:28 am(#)

    […] dorreke wrote an interesting post today onHere’s a quick excerptIn what can be a seen as a victory for Second Life designers against illegal product copying, Eros LLC has just reached a settlement with Robert Leatherwood, an SL resident with the name Volkov Catteneo, who was accused of re-selling … […]

  3. The 4C’s of 3D’s: How to Succeed with Virtual Worlds says:

    September 10th, 2008at 8:29 am(#)

    […] Op-Ed by Sigmund Leominster, News Editor Most commentators on virtual worlds are still happy to use the words “infancy,” “early stages,” “developing” and “growth period.” The concept of online interactions is as old as the bulletin board, the first public version of which is typically cited as the Computerized Bulletin Board System of Chicago, developed by Ward Christensen and Randy Seuss. The story goes that in an effort to cope with the frozen Illinois winters, Ward and Randy holed themselves up from the sub-zero temperatures and created a method of using computers to communicate from a distance. The system went live in 1979 and enabled modem-owning computer users to post messages and share files. In essence, this is what the current internet still does. Virtual worlds are bulletin boards writ large. This may be something of an over-generalization but whether you’re using the Second Life® platform, the World of Warcraft® server, or even Mattel®’s Barbie Girls™ world, you will be passing messages from one person to another and sharing objects and information. What has changed is the look-and-feel of the process. But what makes a “good” virtual world? What makes a virtual world sustainable? Why choose one over another? Why did EA Games™ fail with The Sims Online™ (TSO)? And what does Linden Lab® have to do to maintain and expand the Second Life environment? I propose that there are four features of a virtual world that have to be addressed in order for it to stand a chance of surviving. Each of these factors may have sub-features but, generally, addressing the core four will enhance the prospect for success. The factor quartet include construction, commerce, communication, and constitution. Construction Although many people enter a virtual world either to satisfy a curiosity or take part in some kind of activity, they soon want to be able to create things. These things may be homes, spells, weapons, vehicles, wardrobes, or magazine articles, depending upon the nature of the environment. The desire to make something rather than simply be a recipient can be extremely strong in some people. Second Life property owners, clothing designers, musicians, club owners – all are consumed by a passion for constructing things. Here’s a quote from Daniel Terdiman, a writer for the CNET blog, Crave: “One of the major reasons why TSO never took off is that it really didn’t give players very much opportunity to create their own content. And that was particularly frustrating to many players, because The Sims creator Will Wright had promised that TSO would offer open content creation.” This perspective has been echoed in many other articles. When TSO became EA Land,™ there was a move toward allowing content creation. Tateru Nino wrote in Massively, “EA-Land is apparently following a model more like that of Second Life, with free players and paying subscribers, a planned currency exchange for Simoleons (TSO’s world currency, and now EA-Land’s), multiple avatars per account, custom content uploads, user-run stores, and web-services integration, facebook apps. It’s the whole virtual world nine yards, it seems [2].” User-generated content fulfils the need for creativity. Whether it’s a piece of art, a piece of clothing or a shopping mall, people get pleasure from having something they can point to and say, “I did that.” Virtual world designers would do well to ensure this facility is available. Commerce “If you build it, they will come.” So whispers the Voice to Ray Kinsella in Field of Dreams. The capitalist variation would be, “If you build it, they will buy.” It’s one thing to create a thing of beauty and a joy forever, but quite another to sell it to someone else. Basic commerce involves the way that goods and services change hands – or avatars. Just like in Real Life, people spend lots of time exchanging objects, from shoes to ships, from trains to planes, from lindens to Lincolns. And other than having a straight bartering system, some form of money eases the movement of things. For some people, Second Life business is a way of making real life profits; for others it’s how they pay for their Second Life lifestyle and there is no thought of a “currency exchange” between SL and RL. Either way, the money flows and a currency has to be established. Virtual worlds all seem quick to offer some form of currency, whether Linden dollars, Simoleans, or Barbie Bucks; the aim is to provide a way of letting people interact financially. Although Linden Lab took the step of closing unlicensed banks earlier this year, this didn’t close down the economy. Irrespective of how well or how poorly individuals handle money, there is a basic structure in place in Second Life whereby people can earn money and then use it to buy items. The internal economy is, of course, propped up by the influx of new lindens purchased by real world cash. If Mr. Ineeda Dacash has no in-world job, he can simply buy lindens and add them to the economy. Over time, this may cause inflation, but this is hardly different from how a real world economy operates. At some point, there will be a need to deflate by intervention. This is where we turn to the requirement of Constitution. Constitution Second Life may be lacking a Magna Carta or a Bill of Rights, but it does have its own rules of governance; the Terms of Service (TOS). For an economy to be sustained, there have to be some rules and regulations to ensure an element of justice. In real life, this is the province of government, whether that be democracy or dictatorship. In Second Life, the TOS represents a set of rules laid down by an oligarchy – Linden Lab. In truth, there is no system of democracy within SL and no legal system. There are a number of “police forces” but they are not officially sanctioned, and there is no system of courts with attorneys and judges where people can be charged with crimes or satisfy disputes. All is done by the Governance Team. Love it or hate it, the current TOS document and the Governance Team represent the Constitution of Second Life. Although many people would argue there are flaws in the system, it does represent a key element vital to the long-term success of a virtual world; a set of rules along with a panel of “judges” and a set of sanctions. The effectiveness of this within SL is another debate, but at least theinfrastructure exists affording a more just environment. Communication It isn’t a coincidence that cellular phones and instant messaging software are so ubiquitous. It’s a natural technological extension of the desire that human beings have to communicate. Our ability to construct a verbal world is one of the things that separate us from the rest of the animal kingdom. And it is also almost pointless to state that texting and talking are essential to a virtual world. Whether it’s the Lively™ speech bubbles, Second Life text windows, or voice chat, any virtual world that fails to provide adequate opportunities for communication is doomed. But communication in its broadest sense is not just about talking to each other. It includes the ability to express emotions either explicitly via such devices as emoticons, or subtly, via gesture and facial expression. In Second Life, people will spend money on scripts that animate an avatar. Pose balls also allow for joint animations, where people can have their avatars physically interact in creative ways. It is possible to have a virtual world where communication is allowed but severely restricted. In the Barbie Girls environment, default communication is via B-Chat™, a mode whereby you choose your words from a pull-down list of prescribed sentences. “Let’s go shopping” and “Wow, you look good” are there, but you can’t generate sentences on the fly like “I think Mattel have got this all wrong” or “That’s a butt ugly dress you’re wearing.” To have truly interactive chat you have to become a VIP subscriber, and even then there is a “bad word” filter in place. Of course, the target market here is pre-teens and so it is somewhat understandable that Mattel are taking precautions to protect kids, but the use of a 21st century Orwellian Newspeak breaks the rules of allowing interactive communication, and this will make Barbie Girls eventually very unattractive. The desire to indulge in virtual sex should not be underestimated. Mitch Wagner of Information Week published an interesting article in May 2007 on the varieties of sexual behavior in Second Life [3]. He also interviewed Philip Rosedale about why Linden Lab allows it. According to Rosedale, “We believed that freedom was fundamental to the environment and freedom is not something you can split hairs on. Second Life, like the Internet, is open to all, and what people want to do there is their own decision.” From a technological perspective, it is one of the internet’s dirty little secrets that the desire to access and market porn has pushed forward web-based software. Pop-ups, redirects, compression algorithms, streaming video – all of these have been used and developed by porn merchants quite effectively. Peter Johnson made this point back in 1996 in an article for the Federal Communications Law Journal [4], and a 2003 article available online from the UK’s Guardian newspaper [5] makes the point that the largest revenue-generating sector of the web is the porn industry. Within Second Life, there is a thriving sex industry [6] and sales of sexually-related products are dominant. In a recent case [7], Second Life sex product designer, Stroker Serpentine (RL Kevin Alderman), successfully sued another resident, Volkov Catteneo (RL Robert Leatherwood), for re-selling copy-protected sex beds. The fact that real money is being spent in real life to hire real attorneys suggests real money is being made! Interestingly enough, some months prior to the closure of TSO, then CEO Larry Probst noted that sex would not be allowed in the Sims and that, “Second Life is a pretty adult product with some unusual adult content. We are not going to go there.” Now they are going nowhere. A Model for Linden Lab? Measuring how well a virtual world handles construction, commerce, constitution, and communication is certainly a challenge. This article is simply a first step in trying to define some metrics for analyzing how well a virtual world is constructed. There is plenty of room for expansion regarding all of these factors. My aim was to identify a small set of over-arching parameters that can form the basis of a more detailed analytical tool. But already we can see that TSO failed with construction and communication (no building until it was too late, and no sex), that Barbie Girls faces significant challenges similar problems with construction, constitution, and communication (no building, too heavy a set of rules, and prescribed chat), and Lively has a way to go with construction and commerce. Overall, Linden Lab has the substrate to be successful. Sure there are problems in all four areas, but they seem to be at least ahead of the curve. And I am tempted to add a fifth C: Crash-free. References [1] Daniel Terdiman, ‘The Sims Online’ is officially reborn as ‘EA Land.’ Crave blog, April 7, 2008. [2] Tateru Nino, The Sims Online closes, re-launches as EA-Land. Massively, February 26, 2008. [3] Mitch Wagner, Sex in Second Life. Information Week, May 27, 2007. [4] Peter Johnson, Pornography Drives Technology: Why Not to Censor the Internet, 49 Fed. Comm. Law Journal, 217, 217 (1996). [5] John Arlidge, The dirty secret that drives new technology; it’s porn. The Observer, March 3, 2002. [6] Ariel Otafuku, Second Life Sex Industry Jobs: An insider’s view on making a real life income. SLentrepreneur Magazine, June 25, 2008. [7] Sigmund Leominster, Second Life Company Wins Legal Case Against Illegal Copying, SLentrepreneur Magazine, March 19, 2008. […]

  4. Unreliable anonymity « Second Life Shrink says:

    December 10th, 2008at 5:41 pm(#)

    […] have to reveal that to anyone with a court order – in fact I know they would, since they’ve done it before (to other people, not me, yet). It wouldn’t shock me to learn that the Government (which one? […]