Second Life for Lawyers?

November 14, 2007 by Steven Cutler

Second Life, as it is aptly named, is a virtual world. Through online personas, known as avatars, users of Second Life interact with each other as well as with the virtual items that they create. Users reap rewards for their creative efforts by retaining and exploiting intellectual property (`IP’) rights in their creations; the result is that users are able to `buy, sell and trade’ their creations. What undoubtedly attracts so many users to Second Life is that although these transactions occur using in-world currency, in-world currency can be exchanged for US dollars. In fact, the Second Life website boasted that over US$220,000 was spent in the 24 hours prior to writing this post.

The inherent appeal of Second Life is that users can visit virtual merchants, businesses and homes, in a visually familiar manner. Hoping to capitalize on that appeal and attract clients, Davis LLP has opened an office in Second Life[2]. Using a virtual world presence to establish contact with clients is certainly an avant-garde move, and Davis LLP is wisely reluctant to conduct its substantive legal services through Second Life. The reason for such reluctance: Terms of Service[1].

The relationship between Linden Labs (the creators of Second Life) and users of Second Life is governed by the Terms of Service agreement. This agreement allocates the various rights, responsibilities and obligations of users and Linden Labs. Users retain ownership of their IP rights, but grant Linden Labs a `royalty-free, … perpetual, irrevocable … license’ to exploit these rights for the proper operation of the virtual world and for marketing Second Life[1]. Further, all instances of virtual creations are owed by Linden Labs, as it retains rights to all data stored on its servers.

Suppose Davis LLP (the `creator’) sells a virtual letter, containing advice, to a client (the `user’) inside Second Life. Davis LLP will possess copyright ownership of the virtual letter. Linden Labs will possess both a license to use this letter in its marketing materials and ownership of the letter as it is stored electronically. The sale itself is characterized by an agreement between Davis LLP and the client to license a copy of the IP to the client. Ultimately, the client will possess licenses from Davis LLP and Linden Labs to access the letter as it is stored electronically[1].

The ability of Linden Labs to exploit this advice stands in direct contradiction to the doctrine of solicitor-client confidentiality. Practically, such an action by Linden Labs would be remoteóit is simply not good business practice to market your customersí confidential information. However, due to unequal bargaining power between Linden Labs and individuals, a prudent lawyer is unlikely to negotiate an amendment to the Terms of Service in order to ensure solicitor-client confidentiality. By treating Second Life only as a conduit through which it can obtain and market to clients, Davis LLP is taking the cautious, but correct approach to its existence inside Second Life.

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[1] While outside the scope of this commentary, I would like to propose one argument in favour of `virtual property’ rights not addressed in either [4] or [5]. Briefly, `virtual property’ rights would imbue the user with permanent rights to access the letter. Assume for a moment that the copyright on the letter has expired. What rights does the user possess with respect to the virtual letter? Arguably the user has no explicit right to access the letter (or recover access to the letter if appropriated by a third-party), because the userís right to access was derived from IP rights which no longer exist. This is not the case with physical property. If a user owns a CD with an expired copyright which is stolen by a third-party, then that user can sue the third-party for the tort of conversion. Without a `virtual property’ regime, the tort of conversion is not available to recover the right to access a letter online, because as the Supreme Court stated in R. v. Stewart, [1988] 1 S.C.R. 963 at para. 35, the tort of conversion only protects rights to physical objects. In part because access to the virtual letter has real-world monetary value, it is proper that it should be protected as well as any physical property. It follows that statutory rights to `virtual property’ offer one solution to this problem by providing the user with a durable and enforceable right to exclusively access the letter.

[2] `A Second Life for lawyers?’ The Globe and Mail (26 September 2007), online: The Globe and Mail <http://www.reportonbusiness.com/servlet/story/RTGAM.20070926.wlawbartalk0926/BNStory/robLawPage/home>.

[3] Second Life Terms of Service, online: Second Life <http://secondlife.com/corporate/tos.php>.

[4] Susan Abramovitch & David Cummings, `Virtual Property, Real Law: The Regulation of Property in Video Games’ (2007) 6 C.J.L.T. 73.

[5] Joshua Fairfield, `Virtual Property’ (2005) 85 B.U.L. Rev. 1047.