In a lawsuit filed in April 2009, Taser International, Inc., the world’s largest maker of stun guns sued Linden Research Inc. (“Linden Lab”), the San Francisco based company, which runs Second Life, the online virtual world. Taser Int’l, Inc. v. Linden Research, Inc., 2:09-cf-00811-ROS (D. Az 2009). Second Life enables players, called Residents, to interact with each other through avatars. Residents can explore, meet other residents, socialize, participate in individual and group activities, and create and trade virtual property and services with one another, or travel throughout the world, which residents refer to as the grid. In its lawsuit, Taser claimed that Linden Lab and other defendants damaged the company’s reputation and hurt its sales by allowing virtual weapons to be sold online under the Taser brand name.
Not only did Taser’s complaint alleged that Linden Lab was infringing its trademarks but also that it was damaging its reputation by selling the virtual weaponry in the same online stores that included pornographic content.
The Taser case was dismissed in May 2009, presumably because the parties settled their dispute. Nonetheless, the lawsuit should raise concerns about policing trademarks in the digital world. The law imposes on trademark owners the duty to police their trademarks. Should your trademark be infringed and you permit the infringement to continue without action, you may be faced with an argument that you have abandoned your trademark. Traditionally, policing your trademarks meant monitoring online and offline publications and other places where your trademark may be infringed. Now that actual commerce is occurring in virtual communities such as Second Life, the scope of policing has widened. The purported population of Second Life is more than 2 million although opinions differ. Nevertheless, there are a lot of people “playing the game” and various companies from Reuters to IBM have set up storefronts in Second Life. It’s unclear what the annual GDP of Second Life is — estimates range from 64 to 200 million USD — but whatever it is, it’s not small.
With the commercialization of Second Life by real companies, concern about the protection of intellectual property rights has grown. Copyright owners can protect their rights through the procedures of the Digital Millennium Copyright Act (DMCA), which Second Life states it will enforce. The DMCA requires service providers upon notice from copyright owners to take down and ban repeat infringers. It is to Second Life’s benefit to conform with the DMCA or otherwise it too may be subject to liability for its users’ infringing activities.
Unfortunately, there is no such protections for trademarks. The DMCA does not apply in this area, only the provisions of the Lanham Act, which prohibits trademark infringement. Although Second Life could enforce trademark rights by application of its Terms of Service, it specifically states that users are responsible for complying with intellectual property law but has no provision, like that of Facebook (above article), for reporting violations. Apparently, however, there are violations aplenty. One commentator observed:
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.
Chilling Effects.Org Sounds like the wild west so be vigilant.
— Adam G. Garson, Esq.