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By Sigmund Leominster
There are two elements of the Second Life® virtual world that make it more than “just a game;” the ability to create items and the ability to sell them. In fact, these elements form the basis for a virtual economy where goods are exchanged for monetary units – in this case the Linden® dollar. And since Linden dollars can be translated into real world cash, the notion of “only a game” becomes much less tenable.

Despite the sometimes seemingly lawless nature of Second Life, the truth is that commercial activities are subject to real world laws. This is particularly evident for people who create the everyday virtual goods of Second Life – the shoes, the shirts, the chairs, the beds, the houses, and all the prim-based artifacts that end up in other users’ inventories.

So it is perhaps only natural that, when a designer puts many hours of work into creating and producing an item or items, he or she expects something in return. Just like real life, the fruits of someone’s labor can be sold on the open market, enabling them to re-invest and create more items. This is Economics 101. However, other residents of Second Life think nothing of copying these artifacts and re-selling them and in doing so, depriving the original creator of her income while simultaneously lining their own pockets. What they create is generally referred to as Intellectual Property (IP). Entrepreneurs who are new to the virtual world may not be immediately aware of the problem of property theft but they can learn how to make it easier to take action in the event that they do end up being victimized in this manner.

Lynda Roesch is an attorney with Dinsmore & Shohl LLP based in Cincinnati, Ohio and has been practicing since 1979. She specializes in intellectual property and for the past two years has worked with cases that involve the Second Life® virtual world. In general, she feels that the legal distinction between the real world and virtual worlds is disappearing. “What’s real and what’s not real – that’s not that easy to say. In Second Life it may not be a bricks and mortar store but for someone experiencing Second Life, it’s a real experience.”

The comment that “it’s just a game” doesn’t hold water from a legal standpoint. As Lynda notes, “I hear people say you don’t have to worry about trademarks and copyrights because it’s just a game – but it’s not just a game. If you go into it, there’s a virtual currency exchange rate. That’s clearly commerce. You can pay with your credit cards for some of the materials you buy in Second Life. You can cross over and buy the real things in some of the stores. There’s a whole set-up for businesses to operate. That’s not just a game: that’s commerce – that’s an economy.”

And like any real world business, a virtual world enterprise wants to protect itself from losses. So let’s take a look at some of the basic protections that are already available – protections that already exist in real life and that are applicable in the virtual environment.

Copyright
When someone creates an item in the virtual world, it takes on what is referred to in the legal world as a “tangible form.” Your newly created shirt exists as an identifiable object, even if it only exists as a bundle of pixels in a virtual world. Provided the expression of those pixels can be clearly identified as recognizable form, it is tangible. And once you have created a tangible item, it becomes copyrighted.

The United States Copyright Office (USCO) says that “Copyright protects ‘original works of authorship’ that are fixed in a tangible form of expression. The fixation need not be directly perceptible so long as it may be communicated with the aid of a machine or device.”[1] And copyright resides in the object – whether you formally announce or register it. There are advantages to formal registration but it is not obligatory.

What Does Copyright Allow You To Do?
Section 106 of the 1976 Copyright Act generally gives the owner of copyright the exclusive right to do and to authorize others to do the following:

• Reproduce the work in copies or phonorecords;
• Prepare derivative works based upon the work;
• Distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
• Perform the work publicly – in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works;
• Display the work publicly – in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work; and
• Perform sound recording work publicly by means of a digital audio transmission.

Point three is the one that most affects the Second Life entrepreneur – the right to distribute copies for sale. Copyright is what protects your right to not only keep the shirt on your back but to sell copies of it to other people.

Trademarks
If your business uses a name, phrase or logo to indicate that you are the creator of the goods or services, then you have a trademark. If I create a range of T-shirts with the logo “Leominster Apparel,” this acts as a trademark.  Provided “Leominster Apparel” is not owned as a mark by some other company and is suitably distinctive and/or fanciful, then I have protection. I can also trademark a slogan – such as “Love Your Leominster™,” but that too has to be distinctive. If I then sell T-shirts marked with a tiny “Leominster Apparel™” on the front and “Love Your Leominster™” splashed across the back, should someone else use them without my permission, I have a case.

What Does A Trademark Allow You To Do?
Simply using the mark as part of your regular business is sufficient to claim it as a trademark, but if you want to have some recourse to stop other folks from using it, you can register your logo. If you are in the U.S., registering with the United States Trademark and Patents Office (USPTO) provides the following protections:

• Constructive notice to the public of the registrant’s claim of ownership of the mark;
• Legal presumption of the registrant’s ownership of the mark and the registrant’s exclusive right to use the mark nationwide on or in connection with the goods and/or services listed in the registration;
• Ability to bring an action concerning the mark in federal court;
• Use of the U.S registration as a basis to obtain registration in foreign countries; and
• Ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing foreign goods.

You are entitled to use the “TM” mark as soon as you start using the mark for business, but you can only use the ® after you have had your registration approved – and that takes time and money.

In the U.S., you can you can protect trademarks under federal, state and common law on the basis of use alone – which means registration is not required, but you can choose to do so.

Patents
The third major type of IP is the patent. A patent is for an invention and granted, in the U.S., by the U.S. Patent and Trademark Office. Filing is essential for a patent to be assigned, and the invention must be new and non-obvious. Before a patent can be allowed, there has to be an investigation to make sure there is no current equivalent patent. This is the search for what is known as “prior art.”

Patents are much harder to establish and prove, typically requiring intense development time and interaction with patent attorneys. On the upside, patent protection can be very powerful when enforced. The conferring of a patent gives the owner “the right to exclude others from making, using, offering for sale, or selling the invention in the United States or importing the invention into the United States.” What it really means is that the owner can license the use of the invention to others and collect a royalty.

Software code can be patentable but this is becoming increasingly unpopular (see Ars Technica for a starting point) and harder to register. But if you have a software process you use in Second Life that could be considered patentable, you should contact an IP attorney to discuss the possibilities. Be prepared – getting a patent is no stroll in the park.

One more comment from Lynda Roesch worth remembering: “Anything people sell is a piece of property. They may be paying $2.00 or 20 cents, but they are still paying money for the experience of wearing that shirt in Second Life.”
And if the shirt on your back was created by you, you have rights.

Summary
Copyrights protect artistic, literary, and musical works
Trademarks protect brand names and designs which are applied to products or used in connection with services
Patents protect inventions

References
United States Copyright Office: http://www.copyright.gov/
Unites States Patents and Trademarks Office: http://www.uspto.gov/index.html