1. Avatars Legal Rights, Legal Wrongs Monday 16th June 2008 Dai Davis Solicitor and Chartered Engineer Partner, Brooke North LLP

2. Avatars: Legal Rights, Legal Wrongs What is an Avatar? Electronic money Civil disputes Linden labs contract –Data Protection –Jurisdiction Crime – old fashioned Virtual crimes

3. What is an Avatar Programmable interactive response The Sims World of Warcraft Massive Multi-player Online Role Playing Games The Cave Second Life –You own what you create –Electronic money (Linden dollars)

4. Electronic Money You own what you create –Or do you? –Not your Avatar Who makes the money? Railroad building 4 disputes

5. Increase in Size of Second Life

6. Peak Concurrent Users

7. User Hours in Second Life

8. US $ spent in Second Life

9. Total Lindex Volume

10. Positive Monthly Linden Dollar Flow - Turnover

11. Follow the Money Transactions with Linden Labs –Jurisdiction Transactions with others –Quality –Intellectual property –Harassment –Jurisdiction

12. Civil Disputes (1) Do you know who you are dealing with? Chinese property dispute Stroker Serpentine (Kevin Alderman) (Eros LLC) -v- Volkov Catteneo aka Aaron Long, Robert Leatherwood –Strokerz Toys –July 2007 –Sex Gen Bed Crashing Sims allowed copying

13. Civil Disputes (2) Can you force Linden Labs to tell you? Robert Leatherwood of Texas, 19 Linden Labs stopped the “fault” allowing copying Is it worth it?

14. Civil Disputes (3) Will Linden Labs help? “We cannot verify, enforce, certify, examine, uphold or adjudicate any oath, contract, deal, bargain or agreement made between Second Life Residents” Right but not obligation to resolve disputes

15. Civil Disputes (4) Eros LLC et al v Thomas Simon aka Rase Kenzo Copyright infringement – scripting Various goods (including the bed!) Settled - damages paid

16. Linden Labs Contract 1 “Currency” is not redeemable! Currency is a “licence of rights” We can interrupt, eliminate or change as we wish You must use true information, but we don’t guarantee that others do You must be over 13 and under 18 for the “Teen Area”, but we don’t guarantee that others are

17. Bragg -v- Linden Labs and Philip Rosedale Claimed confiscation of virtual land –Unfair trade practices –Conversion –Interference with contractual relationships –Breach of contract Pennsylvania court accepted jurisdiction Arbitration unenforceable: no choice, non- mutual

18. Ailen Graef -v- U-Tube Second Life persona: Anshe Chung Millionaire (in second life) Interview disturbed by flying objects Repeated on U-tube Sued for infringement of copyright in Avatar Compliant withdrawn

19. Business Issues Trade Marks Subject to instant removal 1% $2,000,000 Corporate image – IBM Guidelines

20. What is electronic money Second Life –You own what you create –Electronic money (Linden dollars) Do you really own anything? Linden's Ondrejka and its CEO Philip Rosedale: agreement " recognizes residents' right to retain full intellectual property protection for the digital content they create in Second Life, including avatar characters, clothing, scripts, textures, objects and designs."

21. Currency in Linden Labs Contract ~270 Linden dollars = $1 “Second Life "currency" is a limited license right available for purchase or free distribution at Linden Lab's discretion, and is not redeemable for monetary value from Linden Lab”

22. Fraud and Linden Dollars Payment fraud in the Linden Dollar exchange –Phishing –“larger than large”, “gigantic” –Month of May 2007 “unprofitable”? “Raise fees on the Lindex in the coming months” Currency fees will rise Metacard

23. A Second Life Credit Card (1) The Metacard Launched in September 2007 Basic card gives you $5,000 Linden dollars “Merchants” receive payment No guarantee that First Meta will! Do not receive high default rates

24. Crime – Ginko Bank A pyramid selling scheme Offering up to 60% annual return Collapsed with 200,000,000 dollars Value of $750,000 Now defunct No enforcement BUT banks now closed Unfair Commercial Practices Directive (2005/29/EC)

25. Crime What are the crimes –Cyberbullying –“Griefing attack" — an attack of unwanted, self-replicating objects, or scripts that push you around –Virtual Rape –Virtual Death?

26. Avatars Legal Rights, Legal Wrongs Monday 16th June 2008 Dai Davis Solicitor and Chartered Engineer Partner, Brooke North LLP