Social Media & Games Law Blog

On August 4, 2009, Linden Lab, the owner of the popular virtual world Second Life, announced upcoming changes to its approach to intellectual property content management in the Second Life® virtual world. Although Linden Lab did not announce a specific time frame for implementa­tion, these changes will impact both mainstream, real-world companies and virtual world content creators who use the platform to run businesses. The changes include a streamlined Digital Millennium Copyright Act submis­sion process, new features for content licensing, and a content seller program offering official certification of content creators who provide identity and payment information to Linden Lab. In addition, Linden Lab is advocating that creators of content-copying tools voluntarily adopt industry standards to prevent abuse.

For more information about this change see our recent client advisory on Linden Lab's IP Policy Change

A virtual world operator and its executives were sued for trademark and patent infringement over the unauthorized sale of virtual goods. The owner of a famous brand of goods sued the corporate operator of a virtual world, including the executives who run that corporation, for trademark infringement, design patent infringement and racketeering violations. Among other things, the brand owner noted the adult content of the website and the unauthorized use of both the name and the shape of the product as causes for concern. In what is a growing trend, the brand owner also targeted the individuals who make operative decisions for the corporate defendants. The owner subsequently dismissed the case without prejudice to re-filing in the future.

Click here for more information on this Virtual Goods Infringement Suit

In a growing trend, another patent infringement lawsuit was recently filed against nearly two dozen companies involved in virtual worlds, video games, social networks and other websites. The plaintiff, Balthaser Online, appears to provide a web application that enables users to create Adobe Flash animations and interfaces for inclusion in websites. The patent in suit is U.S. Patent Number 7,000,180, entitled "Methods, systems and processes for the design and creation of rich-media applications via the Internet."

In September 2009 the court split Balthaser Online Inc.'s patent infringement lawsuit against Friendster Inc., Nike Inc. and two dozen other defendants by sending more than 20 of them to a California federal court and keeping just four in the Texas federal court where the case originated. Click here for more recent developments on the procedural motions in the Balthaser Patent Infringement Case.

This and other cases evidence a growing need for virtual worlds, video games, social network companies to take proactive steps to prevent or deter patent infringement suits. Click here for more information about this Virtual World Patent Lawsuit and here for a prior alert on the Worlds.com patent infringement case and elements of a comprehensive IP strategy to prevent or deter patent infringement suits.

The Federal Trade Commission released a study raising issues regarding adult content in virtual worlds that virtual world providers should consider when evaluating their privacy, content storage, access, and age verification policies. The FTC also highlights "best practices" for virtual world providers dealing with these important issues. The full report (.pdf) is available at the FTC's website.

From the FTC's report:

The FTC surveyed 27 online virtual worlds - including those specifically intended for young children, worlds that appealed to teens, and worlds intended only for adults. The FTC found at least one instance of either sexually or violently explicit content in 19 of the 27 worlds. The FTC observed a heavy amount of explicit content in five of the virtual worlds studied, a moderate amount in four worlds, and only a low amount in the remaining 10 worlds in which explicit content was found.

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