Trademark owners may no longer be able to ignore the extensive unauthorized commercial use of their intellectual property in virtual worlds such as Second Life. As demonstrated by the recent Complaint filed by Taser International, Inc. ("Taser") in the Arizona District Court, there appears to be increasing objection to the sale of third party digital replicas of tangible goods on associated ecommerce websites. The presence of lascivious content on these sites and in the virtual worlds themselves provides a further basis for protest.
Virtual worlds are interactive, graphics-rich Internet environments, which are often mistakenly viewed as mere videogames despite their growing development and use by well-reputed entities such as IBM and Dell as educational, collaborative, and commercial tools. As a means of self-expression, end-users, represented by adopted characters called avatars, can purchase complex, digitally coded versions of real objects. These non-fungible "virtual goods" may be donned, viewed from all angles, and can in some cases function similarly to the original, tangible version of the goods. Although there is some commercial production, most virtual goods are created by individuals, often from photographs of the original items, and sold very inexpensively. Many well-known branded goods are being reproduced as virtual goods without the permission of their rightful owners. However, the limited profits from sales of these reproductions and the fact that the developers are usually individuals may explain why few have pursued efforts to enforce their intellectual property rights in the space.
With its recent acquisition of the website xstreetsl.com, which serves as a marketplace for these virtual goods, Linden Research ("Linden"), the owner of Second Life, became the target of a suit based allegedly on its sale of virtual versions of the TASER stun gun. As discussed below, Taser's Complaint omitted a claim of copyright infringement, and instead alleged, inter alia, trademark infringement, dilution by blurring, dilution by tarnishment, and design patent infringement, directly by Linden and its associates.
Taser did not include a count of copyright infringement in its Complaint perhaps in order to avoid raising the question of whether the Digital Millennium Copyright Act (DMCA) applies. The terms of service of xstreetsl.com and Second Life both incorporate provisions to enable copyright owners to notify Linden in order to have any unauthorized uses by third parties taken down. Such provisions generally provide a safe harbor from copyright infringement claims under the DMCA by characterizing the website owner as an Internet Service Provider rather than a publisher. Extension of the DMCA defenses to trademark claims may only be available by analogy. Nevertheless, the allegations of direct infringement by Linden rather than the third party responsible for posting the virtual stun gun listings suggested that Taser considered Linden to be a publisher rather than a mere service provider.
Among its principal claims, Taser alleged that Linden infringed its TASER and ADVANCED TASER registered federal trademarks. These registrations do not cover "software" in class 9. In order to show trademark infringement, Taser would likely have had to show that the virtual stun guns are related to the original, tangible goods. The Complaint merely alleged that the virtual goods are related without addressing how that might be so. Taser also did not appear to have preceded its complaint with a demand letter, and relied entirely on constructive notice arising from its use of the ® symbol on its goods.
To the extent that virtual goods are considered to be mere software, they might not have appeared related to the plaintiff's weaponry. However, in practice, virtual goods are identified by consumers based on their appearance and function. Reference to goods generically as "virtual stun guns" suggests that they must be related to real stun guns in the minds of consumers. Their analogous function to deliver a simulated electric shock to an avatar victim also suggests that consumers would associate them with the real world weapons. If the goods are indeed related, the sufficiency of Taser's purported constructive notice may have been questionable since there may not have been any notice of exclusive rights to use the mark for software goods, despite numerous seemingly authorized uses of the mark in third party videogames.
In addition to trademark infringement, Taser alleged that its marks are well-known and that Linden had diluted them. It's dilution by tarnishment claim rested primarily on an alleged connection between use of its marks and the sales of virtual pornographic content. However, with some exception, the Complaint and its accompanying exhibits appeared only to show that both categories of goods were available on the same site. Although terms such as "sex" and "crack" were used as keywords to identify the virtual stun guns on www.xstreetsl.com, and some other virtual goods to which the TASER mark was affixed may have been suggestive of sexual behaviors, it was unclear that a purchaser of a virtual stun gun is directly exposed to adult content against its will. On the other hand, the use of the TASER mark on virtual versions of goods other than those offered by the plaintiff might have supported the claim to dilution by blurring if the mark is well-known.
Taser also owns two U.S. design patents on which it based infringement claims. Unlike trademark infringement, infringement of designs does not require a likelihood of confusion regarding the source of goods. Rather, the test is if a purchaser would be confused as to whether the allegedly infringing product is the same as the patented product, as claimed. In this case, Taser's patents claim "the ornamental design for a gun, as shown and described". To prevail, Taser would have had to show inter alia that the virtual goods fit the definition of "gun", as construed by the court, and that the ordinary observer, giving the usual attention of a purchaser, and equipped with knowledge of comparable designs for guns existing prior to the filing date of the patent, would have mistaken the virtual guns for guns covered by the patents.
A hearing on Taser's motion for a Temporary Restraining Order was scheduled for May 6, 2009, but the case was voluntarily dismissed on May 5, 2009 after Linden had already taken down the allegedly infringing uses. As a result, many of the intellectual property issues surrounding infringement in virtual worlds remain open.
The author gratefully acknowledges the assistance of Prashant Jha in preparing this article.
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