Stephen S. Wu-- SL: Legal Writer,, (408) 573-5737, 50 W. San Fernando St., Ste. 750, San Jose, CA 95113

Evans v. Linden Update

Last year, I wrote about the Evans v. Linden case filed in the Eastern District of Pennsylvania. Linden operates the Second Life® virtual world. The case concerned claims that Linden wrongfully deprived the plaintiffs of their virtual real property. I recently checked into the status of the case. In February, the Philadelphia federal court enforced Linden’s forum selection clause and transferred the case to the Northern District of California. Since then, the case has proceeded in San Francisco’s federal court.
Evans and the other plaintiffs claim in their first amended complaint that Linden took their property and froze their accounts without compensating them, despite Linden founder Phillip Rosedale’s public pronouncements about users “owning” their virtual property. In specific, plaintiffs allege:

“Defendant Linden, despite the representations of ownership, took the virtual land, items and money in the accounts of Plaintiffs without compensation. Further, Defendant Linden “froze” Plaintiffs’ accounts preventing them from accessing the account to use, cancel or modify it or enjoy or use the virtual items, land or real world money contained therein. In essence, Linden prevented Plaintiffs from accessing any of their items, land or goods to which they had all rights, title and interest.”

First Amended Complaint, Paragraph 129.

Linden, however, contends that in its answer that it suspended plaintiffs’ accounts at various times for violations of its terms of service. Answer to First Amended Complaint, Paragraph 129. Otherwise, it denied plaintiff’s allegations.

The main issue in this case is whether plaintiffs “own” virtual real property on the grid. Plaintiffs base their complaint on Rosedale’s statements suggesting that users “own” virtual property. Linden’s answer threads a careful path between Rosedale’s statements and the litigation position it takes against full property rights in users’ virtual real property.

In specific, Linden makes statements admitting that users “own” virtual real property, but Linden’s answer uses the word “own” in quotation marks: “Defendants admit that Second Life users with active accounts in good standing may transfer the Objects they created or obtained as well as the ‘virtual land’ they ‘own.’” Answer to First Amended Complaint, Paragraph 105. Nonetheless, when Plaintiffs claimed full title ownership to virtual land in Second Life, and all the attributes of ownership, Linden denies the claim. Compare First Amended Complaint, Paragraph 115 to Answer to First Amended Complaint, Paragraph 115. Apparently, Linden reconciles these positions by saying that “ownership” and “title” to land are metaphors, but in reality, all that users have is a license to use computing resources. See Answer to First Amended Complaint, Paragraph 68.

It will be interesting to see whether Linden can, in fact, reconcile Rosedale’s statements with Linden’s current denial of full ownership rights in virtual real property. Even if Linden can reconcile these positions as an intellectual matter, it may not be able to overcome a false advertising claim, in which the trier of fact will focus on whether the statements of Linden would mislead a reasonable consumer. A judge may not expect a consumer to make the fine distinction between Linden making statements assuring users that they own virtual real property but disclaiming anything but metaphorical “ownership” by crafting the terms of service to provide only a license right to use virtual land. Since the case is still at an early phase, we will need to wait to see how this issue plays out.