Stephen S. Wu-- SL: Legal Writer, swu@ckwlaw.com, (650) 917-8045, 166 Main Street, Los Altos, CA 94022

Eros v. Linden Update

The Eros v. Linden suit appears to have been relatively quiet since the Lindens answered the Eros complaint in November. The most important development to report is the fact that the parties are moving forward with discovery and held a meeting to work out discovery and case management issues. They filed a case management statement reporting the results of their meeting. For a copy of the statement, click here.
I reviewed the parties’ case management statement, and the parties said a number of interesting things. First, the parties provided a description and summary of the case, laying out the critical factual and legal issues to be resolved. Here is what the parties said about their respective positions:

“Plaintiffs allege that Defendants are California-based operators of an online virtual world, Second Life. Plaintiffs operate businesses within Second Life to sell virtual goods. Plaintiffs’ virtual goods are protected by real world registered trademarks and copyrights.

Plaintiffs allege that Defendants directly and secondarily violated their intellectual property (“IP”) rights and the IP rights of four classes of persons and entities selling protected goods in Defendants’ virtual world. Plaintiffs allege that Defendants directly and secondarily infringed the trademarks of Plaintiff Eros by using Eros’s mark to sell infringing virtual goods within Second Life and by providing the tools to other infringing users. Defendants directly and secondarily infringe the copyrights of Plaintiff Grei by reproducing and displaying her copyrighted works within Second Life, and by materially contributing to and supervising the infringing conduct of others within Second Life.

Defendants contend as follows: They are neither directly nor secondarily liable for copyright or trademark infringement. Defendants’ actions do not constitute copyright infringement, and are shielded by the safe harbor for online service providers contained in 17 U.S.C. § 512. Defendants’ actions do not constitute trademark infringement, because they have made no use of Plaintiffs’ marks, any such use was nominative fair use, and those marks are not protected by trademark law due to Plaintiffs’ prior licensing practices. In addition, Defendants lack the level of control or state of mind necessary for contributory or vicarious liability.”

Second, the parties described how they are starting to undertake the exchange of information. The parties reported that they exchanged information under the “initial disclosures” requirement in the Federal Rules of Civil Procedure. In addition, the report states that the Plaintiffs sent the Defendants interrogatories (written questions) and requests for the Defendants to turn over documents and/or electronically stored information. The report implies that this discovery concerns whether the case can be maintained as a class action. Interestingly, however, the Defendants have not sent information requests to the Plaintiffs. The parties do, however, anticipate significant future information exchanges. In addition, the parties agreed to exchange electronically stored information in native file format, including metadata. Litigants do not always agree to such an arrangement, so it is interesting to see the agreement here.

Finally, the parties are setting up a crucial battle over whether the case can be maintained as a class action. Each party set forth its position. The Plaintiffs seek class certification, and the Defendants oppose it. In fact, the parties are going to postpone evidence gathering on the merits of the parties’ claims until after class certification is decided.

I will continue to follow the case and report periodically on its progress.
|