“A society that has more justice is a society that needs less charity.” ~ Ralph Nader

Yesterday, because I had way too much spare time on my hands while dealing with HDD failure issues (and likely feeling the sting of the value of property which amounts to just a bunch of 1′s and 0′s), I posted a comment on an article titled “The Dangers of Virtual Goods” by Gianna Borgnine. I liked the tone of the article for its civility concerning an issue that is generally met with “rabble rabble rabble” in the SL blog and forum spheres. That said, I found several of the positions put forth by Gianna to be both dangerous and troubling from a virtual property content creator and consumer rights point of view.

My initial comment appears there, as does Gianna’s reply, which this post will address. My intent is not to move the debate to my forum, but to be able to be my wordy self and address all the points I feel are important to the current debate without creating a three-page scroll in someone else’s comment section.

I will address Gianna’s response point by point with her quotes numbered and my responses beneath, simply because I think better (in forensic language terms) in outline form. I’ll also try to keep my phasing on the dry side without my customary quips because I don’t want them to be interpreted as moving the conversation away from its current course.

While I welcome any comments here, I should hope that debate addressing the original article will be taken to Gianna’s post on the Sand Castle Studios website.

1. “However, this does not mean that we don’t have to follow the TOS nor does it automatically make Linden Lab thieves (as presented by the Plaintiffs). While some companies may use their “all or nothing” TOS to act in bad faith (as you suggest) I personally do not believe that this is Linden Lab’s intent. I believe that their TOS were written in such a way to protect Linden Lab.”

I was not advocating violating TOS, nor do I think that Linden Lab are thieves in the traditional sense. I do, however, believe many parts of their current TOS would not stand up in a court of law, and I believe Linden Lab settled to avoid several parts of their previous TOS being deemed unsustainable in a California court of law.

As for Linden Lab’s intent, I do not believe (or propose) they have planned to act in bad faith. I simply believe they are so mismanaged and so incapable of establishing a uniform direction that their different departments behave in ways that contradict one another. As such, one side of the mouth makes a promise and the other side of the mouth tries to establish rules around those promises. The intent may not be bad faith, but the outcome is the same. Incompetence, however, should not be mistaken for conspiracy.

2. “By providing us an open platform, with the tools and freedoms that they have given us, they also carry a lot of risk. I believe for this reason they absolutely need to have protective terms in place.”

Another way of looking at this is: by providing us an open platform, with the tools and freedoms they have given us, they stand to make money based on the creative work of other people. The risk/benefit ratio there does not give them any elevated status in terms of their protections needing to be greater than that of consumers or content creators. There is no argument that they require more protection than we do — they’re in a position of risk because they’re in a position to profit; that’s the deal. Yes, they need to have protective terms in place, but those terms should not place an unfair burden upon content creators or consumers, or seek to strip them of basic marketplace rights.

Moreover, a great deal of LLab’s legal risk is their own fault due to poor decision-making. They have ruined any chance they could fall under a common carrier type exception, for example. Their bad choices are not the fault of the community. Overcompensation for past mistakes has a lot to do with the problems and disconnects the community is experiencing right now.

3. “I also believe that this is justified based on the types of lawsuits that have been brought against them up to now. I don’t believe any current or former plaintiffs are/were acting in the best interest of Second Life community, but in their own best interests.”

As well they should. A consumer, owner, or content creator who stands up for their own rights, stands up for the rights of all residents, regardless of intent. There is no obligation for the individual consumer or content creator to act in the best interest of the community, just as there is no obligation for Lab to do so. The benefit of acting for the good of the community happens, often, regardless of intent, however.

For example, prior to the Bragg case, I knew a handful of people who were locked out of their accounts for no reason on different occasions — three of which I was personally exposed to. In the three cases of my personal friends, they weren’t griefers, nor were they violating TOS. They were given no warning or notification, but were locked out of their accounts and denied any means of customer service — in one case for over two weeks. During this time they had no access to their in-world businesses or planned events (which, in one case was a charity event). When I or other residents attempted to seek communication on their behalf, we got no where. Following the Bragg case, no one I know has experienced this again. Because the liability of denying someone access to their in-world property was established as risky. Bragg may have been a jerk who exploited the system, but his case highlighted flaws in the way Lab operated regarding locking accounts and some of those were addressed as a result.

4. “I also don’t agree that Linden Lab has been “erratic” or “disingenuous” in regards to the TOS. They essentially have said the same thing the entire time – Linden Lab owns everything, but they grant us certain rights and licenses. This has never changed. I can find you posts by many different residents/communities that understood this and that date from recent years, all the way back to 2003. This new version only further “clarifies” this.”

We’ll have to agree to disagree on the nature of their behavior I believe they have been undeniably erratic and disingenuous. As for the stance that their TOS claims ownership, that’s simply incorrect. They do not claim rights over the intellectual property of others. By all means, provide anything official that you feel backs your point of view, but even the briefest Goggle search will reveal multiple quotes from Philip and others that demonstrate they have promised “real” ownership over virtual property not only in advertising, but in news articles. Even by your own position, the fact that they’d have to “clarify” this far down the road means they have — at best — allowed the waters to stay intentionally murky while they benefited from the confusion.

If you’re trying to assert that this doesn’t have any bearing on TOS, I’ll refer you to the following article from December, 2006:

“Our Terms of Service 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. This right is applicable both in-world and offline, both for non-profit and commercial ventures. You create it, you own it – and it’s yours to do with as you please.”

5. “You said that, “Individuals, organizations, educational facilities, and corporations have invested time and money on the premise that what they buy is SL is “owned” by them”. I would argue that is not at all why many invest time in SL.”

I didn’t say it was why everybody invests their time in SL. I simply pointed out that is why a great deal of people invest in SL, and it’s worth noting that subgroup is the main reason we have an economy at all and the reason SL didn’t just become another glorified chat room with outdated Poser mesh avatars wandering around aimlessly.

6. “I’m not sure whether your thoughts imply confusion or that we are debating something different, but Linden Lab’s format for content in Second Life is proprietary. Second Life content doesn’t ever reside anywhere, but on Linden Labs servers.”

Content that belongs to Linden Lab doesn’t reside anywhere but on their servers. However, I promise you, all the content I make for SL resides on my hard drive and can be reproduced in several other environments. I’m sure most other content creators can say the same. Linden Lab doesn’t have a proprietary ownership of geometric three-dimensional shapes, or the basic mathematics with which we alter them in their environment. Those can be recreated in any number of formats. They don’t have a right to claim proprietary status over something they had no hand in creating — like the handicapped meshes we must currently import for use as sculpties or real meshes, when those changes come. SL is merely an interface; they don’t produce meaningful content for the community, but they do provide the environment and the interface for virtual goods to be imported. There is nothing they provide us to create with that they “invented” other than the LSL scripting language which is, let’s face it, a poor C+ knock-off. The idea that they should be able to claim proprietary status, in terms of the SL goods marketplace is difficult, if not impossible to defend. Remember, they were in talks with IBM at one point to allow goods to be exported/ imported into other environments, so the idea that content can’t reside in other places is something even they understand to be temporary. I’ll get into how the development of copybot applies to this argument later.

The one thing they provide that they can claim proprietary status over is land ownership and they have marketed that as “ownership” not “licensing rights” from day one. Not just in advertising, but all their information was phrased in terms of “sales” and “ownership” and their executives pushed this idea in every news story and in all the early interactions with the community.

7. “The virtual content being traded is not copyrighted goods, but licensed software products. So as I said in my post, while we are creators and consumers, we are *not* buyers or owners.”

See above regarding the link I posted where Philip addresses this in explicit terms of how the TOS is meant to be interpreted regarding ownership.

8. “Technically, the way things are, legally, no actual purchase took place so you never really “own” the content. So when it comes to deleting content, this case is very different than digital goods that you purchase. With the Kindle, users actually paid real money to purchase the book, and the TOS did not give Amazon permission to delete the book. In Second Life, only a transfer of licenses occurs, not a purchase, and the TOS as they are now, gives LL the right to delete content at any time.”

This may have been a good defense until the gambling decision was made, but even then it would have been thin. By banning gambling to protect themselves from an immediate concern, they failed to realize the long-term implications. Their actions clearly indicate that they consider their money to be the same as tokens, and the laws regarding token currency and notational monies in this modern age of electronic banking are going to experience a lot of change (and have already). The very fact that LL allows (and provides the means) for exchanging their token currency for real-world monies separates it from the closed systems like WOW, for example, where you not only do not own your “gold” but are expressly forbidden to attempt and trade it for real-world currency. When and if this ever comes before a court of law, it is going to be near-impossible to argue that no real purchases took place.

9. “However, the only time I have ever seen content deleted by LL is if it was stolen (copybotted by someone then passed out or resold), or if it was obtained by using some sort of exploit. This makes perfect sense to me. If I purchase stolen goods in the real world, the police can seize them without compensation, regardless of whether I knew they were stolen or not.”

No one, to the best of my knowledge, defends the idea that LL should keep proven stolen goods on their servers. But their position has always been that unless served with legal notification, they will take no action/make no judgement regarding stolen content. They’ve made no effort to create even basic safeguards against the upload of stolen content and long-demonstrated it wasn’t a priority. It would have been easy, for example, to require that anyone uploading a texture or placing an item for public consumption have a paid account. In other words, if you’re not a paid member, everything you import or create is no-tansfer. Free accounts would still have been able to create items for their personal use, but not for distribution. This would have assured that there was a paper trail to follow for anyone distributing false goods and that contributing items/images to the community came with the responsibility of being held accountable for those things. It would have protected copyright for content creators in a huge way. In Stroker’s case, he wouldn’t have spent an insane amount of money tracking down some kid using his grandmother’s computer to steal products — it would have easily cut his legal costs in half.

Moreover, LL has removed several things from their servers without notice and having nothing to do with stolen content. In some cases, this was to avoid griefing or exploitation of flaws in the design, which is understandable. In other cases, removals have been arbitrary with no explanation provided. In still other cases, the removals have been made for ridiculous reasons. For example, in the Icing case, where items were removed because a TMed name was used in the description, when there are a million other examples of this kind of thing that go unaddressed. Stolen content being removed happens far less frequently than unoffensive content being removed. Again, a problem with inconsistency that sends an erratic message to the community.

10. “You are also right that my Monopoly money was not a real currency, but my point was not just that I own nothing, but that the advertising tells me that I do.”

Trying to maintain this analogy right now is something you should abandon. At no point does Parker Brothers imply you “own” anything (other than the game itself). Linden Lab does and has, on repeated occasion in multiple forums, for years promoted the notion of virtual property having the same rights as real property and their purchases having similar rights.

11. “As far as WoW, I could argue this for hours as well, but since I’ve already said more than I intended, I will leave it at two things – you say you don’t own anything, but most items in WoW become your avatar’s “property.” You also say that you only pay a subscription fee, but most objects have monetary value and are often openly traded. You also can’t back up any regions or “property” there even though you paid for them with your subscription fee.”

I’m not sure how you could argue this for hours, as it’s pretty open and shut. WOW forbids (and bans) any case where you try to sell your items for real world currency if they find out. There is nothing in the literature, news interviews, or TOS that implies you’re granted rights to items, or that they have any outside game value. They are also the sole creators of all their content and retain copyright ownership, accordingly. The subscription fee allows you access to their environment and their content within the context of their game only, although they have allowed for machinima, etc. with limited rights. Any attempt to take content out of the game or assign real-world value to it is expressly forbidden. It bears no relation to how Linden Lab promotes and handles the SL format, the SL marketplace, or their own currency.

12. “You may be able to back up your website, but can you back up your Plurk, Twitter, Facebook, or even your email?”

Yes to email and Twitter, with a few simple tools. If I participated in Plurk or Facebook, I’m sure those tools exist as well.

***UPDATE*** Via a twitter from Grace, here’s one example for backing up Facebook.

13. “You brought up the Kindle earlier and said you had rights to your digital books because you own them, but in fact you can’t back up your electronic books to any other device either.”

I don’t own a Kindle and as such I didn’t make any assertions based on what you’re saying. I provided an example of consumer outrage over their virtual purchase rights being different from physical purchase rights. This is a consumer issue that is already a matter of much debate. In Amazon’s case, it’s particularly interesting because they’re now selling MP3s without the limitations imposed by other vendors, such as iTunes, while trying to maintain limitations on the Kindle. It will be interesting to see how they attempt to maintain that duplicity in the face of consumer pressure. They’re able to get away with it now because they don’t have any real competition providing consumer choice. But once the publishing industry gets their heads out of the sand, there will be changes to virtual book sales as there have been for virtual music sales, I’ve no doubt.

14. “In addition, if you are implying you want to be able to back up the things you claim you “own” on Second Life (even though legally at least for now you don’t own them), then you are also implying that you want to supersede the creator’s intellectual property rights.”

I’m not claiming any such thing. I’m a creator and wouldn’t do anything to undermine my own intellectual property rights. However, I’m also a consumer and I’m within my legal rights to make personal back-ups of anything I purchase for use within the Second Life format since they do not provide any assurance of maintaining my data. I can photocopy pages of a book for personal use; I can rip songs from a CD I purchase to my computer, etc. Copybot was created, in part, to address this consumer issue.

15. “You also asked,” If they encouraged others to invest in their platform under certain pretenses, why shouldn’t they suffer legal consequences for failing to hold up their end?” The answer to me is simple. Since you are talking about legal consequences, we have to look at the legal issues. Legally, the TOS never promised “virtual ownership” as you called it. Show me a legal document that gave you “ownership” of anything.”

Handshake agreements and verbal contracts don’t have legal documents, either, but they can be just as binding in a court of law. In fact, since Linden Lab doesn’t require any sort of signed contract for land sales, one could argue that the verbal agreements and implications are more important here. This is not as open and shut as “if it’s in the TOS that’s the final word no matter what we do or say.” TOS is just a policy that we should abide as users, but that doesn’t mean it can’t be challenged.

This exactly my point in stating that TOS cannot exist to allow a company to make promises one way, and revoke them another. Virtual ownership has been promised on repeated occasion in multiple forums by the creators and executives of Linden Lab. The wording on the pages where I ordered my island all used the term “purchase” and “property.” The link at the top of the current website still says “Buy land” and not “Lease land.” Those pages have been revised in the last couple of years, but there is a very healthy legal argument to be made that the TOS addressing ownership could be invalid due to the fact that LLab has acted against it and promoted against it.

16. “As far as I know, as of today, no court has ever completely overruled a TOS.”

It would be unlikely that any TOS would be found completely invalid. I don’t think anyone was implying that every part of a TOS is invalid because one section (or multiple sections) are deemed legally unsound.

17. “In fact, I can find you plenty of case precedent that has upheld forced agreement to TOS, and “all or nothing” TOS, etc.”

I don’t think anyone’s debating that “all or nothing” TOS can be upheld in the right circumstances. In WOW’s case, for example, their “all or nothing” clauses are pretty sound.

18. “Remember, the court never established that Bragg ever actually “owned” anything nor did it throw out the entire TOS. The judge simply ruled that the TOS at that time could not force Bragg into arbitration, because that particular clause was unconscionable.”

Lab settled. The court never had a chance to rule on everything. The judge actually ruled on two things that were important, however, not just one. The first, as you say, was regarding the arbitration clause being invalid, but the other kept Philip Rosedale from being able to dismiss himself from the complaint. The reasoning was that his own national marketing efforts to publicize Second Life tied him to the case and established a minimum contact requirement for personal jurisdiction. Considering that the national marketing was enough to establish such rights, the content and nature of such marketing must surely be considered “on the table” for legal consideration as well.

19. “Finally, you mentioned that Linden Lab gave their users “rights” and then took them back on a whim.

You’ve misread. I didn’t say whether or not rights were given or removed at all. I said the concept could not be put forth and withdrawn on a whim. My point was the idea that just because LL giveth, LL can taketh away isn’t necessarily sound when we’re talking about consumer and content creator rights.

20. “The rights they gave their users and creators was the rights to their intellectual property, which is one of the most powerful rights you can have. It is what enables me to operate my company. They have never taken this right back, and I am very thankful to them to still have it today.”

I don’t understand why you’d believe that Linden Lab could or should hold intellectual property rights over the original creations of others by default. Linden Lab doesn’t give anyone rights to any intellectual property they own, nor should they. But it’s worth pointing out that likely no one would want it. Let’s face it, their biggest content of the moment is Linden Homes and those are awful by current market quality standards of what’s out there from third party creators.

They didn’t give users and creators rights, but they did acknowledge rights (like copyright) which already existed and did not ask creators to surrender those rights by importing their content into the SL virtual world format. That is a huge difference from “granting” rights over something they can claim as their intellectual property. I do not say that as a small thing by any means, for it was a unique event and something they should be applauded, regardless of the corporate backtracking they’re currently trying to employ. But the idea that they gave consumers and creators those rights is incorrect. They simply did not require users to surrender their rights upon importing.

21. “Just to reiterate, you currently do not have ownership rights because no legal purchase of content was ever made, just an exchange of licenses. The TOS legally gives LL ownership rights, as you have already agreed to in the TOS. This is not a new change of policy.”

Nothing in LL’s TOS grants them rights to anything other than the storage of data and their own property. The matter of ownership rights on virtual goods is something courts will be struggling with over the coming years, and it’s certainly not going to be put to rest in blog comments. My position is obviously, vastly different from yours.

But it’s worth clarifying that you’re wrong regarding the intent of the TOS to claim ownership over the intellectual property of others to the point where I’m starting to wonder if I’m understanding you correctly, or if I’m misinterpreting what you’re trying to say.

22. “To me, the thing more dangerous than the failure of many people to recognize their own rights, is the presumption that they are ENTITLED to more rights than they are legally provided as determined by the agreement that they willing entered into (and therefore agreed to) while at the same time wanting to ignore others intellectual property rights, all simply because they feel entitled.”

Failure to recognize our own rights allows individuals to be exploited and allows abuse of individual rights to continue. In contrast, feelings of entitlement, while annoying, create nothing but noise. If they rise to the level of legal action, they can only serve to provide clarification and guidelines. How you can find entitlement to be the more dangerous of those two situations is something I don’t think we’ll be able to see eye to eye on.