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Jan. 1, 2008
Real Law in the Virtual World
What will the rise of 3-D online environments mean to lawyers, law school professors, and corporate counsel? Just ask their avatars.
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At 8:30 a.m. on Saturday, October 20, Benjamin Noble was in the bar association's conference room arranging a tray of doughnuts, muffins, and bagels alongside the cappuccino machine. "I'm not only the president, but I also do setups," joked Noble, who noted that a reception would follow the bar's monthly meeting. As the members began to arrive in the sleek, 48-seat auditorium, Noble?a figure of medium height with brown, tousled hair?waited by the floor-to-ceiling windows that revealed a lovely view of the harbor below. He and a few other members wore conservative suits of black or gray. One broad-shouldered man came dressed in a red Che Guevara T-shirt and stonewashed jeans. And a woman with wild black hair really stood out in an orange tutu, a black short-sleeved top, thigh-high black stockings, and high-heeled shoes. There was no elevator in the new Law and Justice Center, so some members had trouble figuring out how to teleport to the sixth-floor auditorium. All it really took was a few mouse clicks. For this was a meeting of the Second Life Bar Association (SLBA), a virtual environment run by San Francisco?based Linden Lab. The online meeting was conducted in text using the chat function. Benjamin Noble is the avatar (graphic character representation) of Benjamin Duranske, a 33-year-old graduate of UC Berkeley's law school who last year founded Virtually Blind, a virtual-world legal blog. Duranske worked as an intellectual property litigator in San Francisco before relocating to Idaho. He joined Linden Lab's virtual world of Second Life in June 2006, and, after encountering other attorney avatars, created a bar association. Since its first meeting in December 2006 the SLBA has grown to more than 200 members. "I didn't want this to become a personal vanity project," says Duranske, whose term as bar president ends this month. "We held elections, so I would only be an officer for a year." Noble began the bar meeting by announcing that a reporter, Manda Moran, was in the room. Manda is my onscreen avatar. I had emailed Noble a few days earlier to ask if it would be OK for Manda to attend the meeting and take a few screenshots. Manda was "born," as Second Life likes to say, last summer. I chose a female form and spent a few hours on her appearance, then she was teleported to Orientation Island. I used the arrow keys on my computer keyboard to make her walk, and to make her fly I clicked my mouse. At birth Manda automatically wore jeans, a T-shirt, and sneakers, identifying her as a newbie. So I later changed her shirt color and got her some free clothes. My avatar sat toward the back of the auditorium, while I sat in front of my computer screen, startled that Noble had introduced me/her. "Who are you with, Manda?" asked Noble, who knew my identity in real life but wanted to inform the others. "I'm an editor at California Lawyer," I typed quickly. "We're happy you're dropping in," replied Noble. Manda thanked him and sat back to observe. I was participating in a virtual world, a three-dimensional place in cyberspace where users can interact through their avatars, which Linden Lab defines as "your persona in the virtual world." Residents can join any of the various communities that have formed "in-world," participate in events, shop for virtual clothes, attend classes offered by real-life universities, or become a member of a group, such as the SLBA. In its present form, Second Life is a combination of hyped-up chat room, social network, and video game. But its possibilities as an alternative reality seem endless. Virtual worlds began more than 30 years ago as computer games that emulated aspects of Dungeons & Dragons. These games evolved into "massively multiplayer online games," such as The Sims Online (2002) and World of Warcraft (2004), where thousands of people play and interact through voice or text in three-dimensional graphic settings. These are "persistent environments," which means that when you log off, the game continues with other players, and things may change dramatically while you are away. Today, millions of people spend time in virtual worlds?and they're not just playing games. Users "have formed economies and societies within these worlds that have real-world implications for the way we live, work, and play," says Dan Hunter, associate professor of legal studies and business ethics at the Wharton School at the University of Pennsylvania and cofounder of Terra Nova, a virtual worlds blog. "One of the major draws of virtual worlds is the 'embodiment' they provide," says Nicolas Ducheneaut, a scientist at the Palo Alto Research Center. "Instead of a simple string of text, users can project themselves into a much richer, graphical avatar that can grow and change over time. This anchors their identity in a much stronger way than what is possible elsewhere on the Internet." Ducheneaut says that in the near future Internet users will be able to bring other aspects of their identities into their avatars. "An obvious way to accomplish this would be to merge a social-networking site, such as Facebook or LinkedIn, with a virtual world," he says. "I believe we will soon see that kind of consolidation." Philip Rosedale, founder and CEO of Linden Lab, agrees there's more to come. "Maintaining a virtual presence may become ubiquitous in a few years, as cell phones and email addresses are today," he says. "We'd like to be there to facilitate that transition." Clearly, virtual worlds are no longer the exclusive realm of fantasy or Hollywood?think Tron, Disney's 1982 sci-fi film, or The Matrix, Warner Bros.'s 1999 hit. Virtual worlds are "the next-generation cyberspace," says Beth Simone Noveck, a professor at New York Law School and founder of the State of Play: Law and Virtual Worlds Annual Conference. Noveck contends that three-dimensional, interactive environments will change the law, as well as how the law will be brought to bear on business, social, and political life online. "People are appearing with new visual identities and likenesses, trademarked brands are appearing in virtual shop windows, and ownership of avatars [is] being settled in divorce and probate proceedings," she says. "The law is having to grapple with questions that are similar to, but not all the same as, what we've confronted in two-dimensional cyberspace." I first learned about Second Life in Business Week. Anshe Chung, Ailin Graef's avatar, was featured on the May 2006 cover as a "cyberspace real estate developer" who made real money buying, developing, and selling virtual property. Six months later Chung announced she had a very real net worth of more than $1 million from her business. I was intrigued by the idea that people were purchasing property, as well as making and selling furniture and clothes, in Second Life. Yes, real money is exchanged in this virtual space. Linden dollars, the Second Life currency, can be converted to real U.S. dollars at LindeX, the Linden dollar exchange. (In November the exchange rate hovered between 265 and 266 Linden dollars to the U.S. dollar.) It all seemed entrepreneurial and fun. Some people actually make a living in Second Life; roughly $1 million in virtual transactions occur every day. Linden Lab provides the platform, and the residents of Second Life create the content. (See the profiles, starting below.) Then I started reading about all the other things going on in Second Life: sex (animation programs allow avatars to get intimate), child pornography (avatars were exchanging photos), and gambling, which the FBI investigated and Linden Lab banned last summer. But Manda Moran has stayed away from the red-light areas. I'm not ready to encounter any naked avatars on my computer screen. Some of my California Lawyer colleagues initially disparaged Second Life as a game for people who lacked a first life. But with 9.6 million avatars, according to Linden Lab, Second Life has attracted a lot of media attention. As of September there were 6.7 million unique "residents" and approximately 500,000 active users per month. But only 30,000 to 40,000 people are logged on at any time, and some early corporate participants, such as Wells Fargo and Starwood Hotels & Resorts Worldwide, have left Second Life. These days, real-life corporations, universities, government agencies, and medical centers are venturing into virtual worlds to hold classes, conduct research, and provide training. Authors make appearances to promote their books, including Judge Richard A. Posner of the Seventh U.S. Circuit Court of Appeals for Not a Suicide Pact: The Constitution in a Time of National Emergency, and Stanford Law School professor Lawrence Lessig for Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity. In November, CNN launched a Second Life bureau, which will distribute both real-life news and resident-generated content. Reuters assigns a full-time reporter to the virtual beat. Coca-Cola hosts Second Life events and contests, and Coldwell Banker offers virtual real estate to avatars. Toyota sells virtual versions of its Scion brand cars in a Second Life showroom. And last year H&R Block opened a virtual storefront offering free tax advice and access to its tax preparation products. In addition, IBM staffs the sales reception area of the Second Life business center 24 hours a day, five days a week. It works with Linden Lab and other companies to create interoperability between virtual worlds and to make avatars portable. Rivals of IBM such as Dell and Sun Microsystems have also launched Second Life presences. At Cisco Systems, "We are using our campus in Second Life as a business and educational tool about the role of networking in our everyday lives," says Van Dang, vice president and deputy general counsel. "It's another opportunity for our business to interact with our customers in a fun and interactive environment." Cisco's clients in Second Life and other virtual worlds receive training and education, and the company gets real-time customer feedback. With Cornell University and Metaversed, a blog on virtual worlds, Cisco is working to create the Metaverse Market Index to track virtual-world subscribers and their economies. Last spring the Wall Street Journal published an article about companies?including Microsoft, Sodexho Alliance, and Verizon?that interviewed job applicants at virtual career fairs in Second Life. It was cheaper than holding a real job fair, and it brought the participating companies some media attention. While virtual world residents are having fun, they are also doing business. Last April, analysts at Gartner stated: "By the end of 2011, 80 percent of active Internet users will have a 'second life,' but not necessarily in Second Life." If that prediction proves accurate, it's time for lawyers to pay attention. Whatever it is that's going on in the virtual world, even the American Bar Association is interested. The ABA's Section of Intellectual Property Law and Section of Science and Technology Law have both formed committees on virtual worlds and online games. At the Second Life Bar Association meeting Manda attended, bar president Noble announced that the ABA's Sci-Tech Law section would help SLBA offer CLE credit for bar events. The virtual members were impressed. This spring the Sci-Tech Law section will publish Virtual Law: Navigating the Legal Landscape of Virtual Worlds by Duranske, avatar Noble's creator. "My book will be a practical guide for legal practitioners and scholars," says Duranske, who cochairs the section's Virtual Worlds and Multiuser Online Games Committee. "It will cover copyright, trademark, criminal law, civil procedure, and agreements between users in virtual worlds." Because virtual law is so new, very little case law exists; he likens it to the early days of the Internet. Elite law schools are among Second Life's early adopters. This spring, for instance, Stanford Law School will offer a seminar on virtual jurisdictions. "The class will discuss what a court system in the virtual world would look like, and try to implement it," says Lauren Gelman, executive director of Stanford's Center for Internet and Society. Gelman plans to hold some discussions in Second Life and have residents participate. "For courts to work in Second Life, we would need the support of the residents," she says. By the fall term, she expects law students to begin hearing cases in Second Life. Gelman is also dean of New York Law School's State of Play Academy, which holds classes on the law in There.com, a virtual world created by San Mateobased Makena Technologies. "One of the driving ideas behind the academy is that you don't have to go to three years of law school to know about the law," she says. "It's just a way to give people more information." Classes are open to anyone who creates an avatar. New York Law School has been at the forefront of virtual-world experimentation. Professor Noveck held the first State of Play Conference in 2003, and the following year she launched Democracy Island in Second Life. "It was originally designed to be a way to try out new methods of citizen participation in rule making," Noveck says. "One project is called Landing Lights Park, which re-creates a park in Queens, New York. People can participate in the political process of designing it, moving benches around, and testing where they want things to go." This fall the law school plans to implement a virtual-world mentoring program. "Each student will have an alumni mentor," Noveck explains. "A virtual alumni mentoring office will make it easier for the alumni to give back to their school by being available when it's convenient for both mentors and students, regardless of where they are located. The alumni avatars can have 'virtual office hours' that allow students to drop by." Harvard Law School's Berkman Center for Internet and Society is also a participant in Second life, holding classes on Berkman Island. The law school recently held in-world moot court trials, with Second Life residents serving as mock jurors. Other Berkman Center classes, such as CyberOne: Law in the Court of Public Opinion, and Introduction to Virtual Worlds, are taught in conjunction with Harvard's Extension School. So far, real-life law firms have been slow to join in. In early 2007 London-based Field Fisher Waterhouse became the first large firm to open a Second Life office, a project spearheaded by a partner in the firm's Technology Law Group. And during National Pro Bono Week in November, 1,600-lawyer firm Lovells hosted an exhibit in Second Life to promote its work. A number of sole practitioners participate, mostly out of curiosity. Many are SLBA members, and some have hung out shingles. Others are trying to generate real-life business, and a few use their offices strictly as meeting places. Many in-world legal disputes are too small to warrant litigation in the courts, but alternative dispute resolution could provide a system of legal accountability. (See "The Law West of Reality," page 25.) "Virtual worlds is still a developing practice area," says Cristina Burbach, an associate at Fried, Frank, Harris, Shriver & Jacobson in Washington, D.C., and a cochair of the ABA Sci-Tech Law section's virtual worlds committee. "Law is always an extension of what went on before," she says. "The issue with virtual worlds is how you extend it. Is property law extended in this case? Nobody really knows." Burbach began playing World of Warcraft two years ago. "All of my friends are IT people, and they were really into it," she says. "Then I started reading Terra Nova and got really fascinated with this uncharted territory. It's such fertile ground for economic experimentation." Burbach says she wonders whether, in the near future, it will be necessary to list her Second Life and World of Warcraft avatar names in her bio. Crossing between the real and virtual worlds, however, can be tricky. Sean F. Kane, an IP attorney at New York's Drakeford & Kane and another cochair of the ABA's virtual worlds committee, says he doesn't practice law from his Second Life office because of concerns over regulatory issues such as legal advertising and the unauthorized practice of law. "The virtual world is still a nascent area," Kane says. "So I have chosen not to push the boundary until there is more guidance." He notes that because the virtual world encompasses state and national boundaries, it isn't clear which licensing jurisdiction has authority. "It may be where I am, which would be OK," he says. "But it may be where the server is, or where other individuals reside, which is problematic." Kane says he expects significant developments in virtual-world technologies in the next five to ten years. "Virtual worlds are where the Internet was in the 1990s," he says. "The differing technologies being tested will likely cause a paradigm shift in the way we access information for business, social, and individual use." If the future of the Internet includes virtual worlds, lawyers eventually will be involved. And that future may not be too far away. Last fall Google was rumored to be planning its own virtual world, a 3-D social network that would combine existing technologies such as Google Earth and Google Maps. As more people become accustomed to virtual worlds, professionals increasingly may have to equip themselves with an avatar to be represented at meetings. And soon attorneys may list an avatar, along with an email address, on their business cards. THE LAW WEST OF REALITY Most disputes between avatars in Second Life so far have concerned micro-transactions that aren't worth pursuing in real-life court. Avatars typically have to work out problems among themselves, though some people have sought to establish alternative dispute resolution options. The problem is a lack of in-world enforceability.One attempt to correct that is the e-Justice Center, which the Portuguese Ministry of Justice in Second Life and the New University of Lisbon's Law School opened in July. Once the parties' avatars agree to the mediation or arbitration, they put money in an escrow account that goes to the winning party. The center is staffed by law professors, law students, and the Ministry of Justice. Some Second Life disputes have landed in real-world federal court. Two copyright-infringement cases have been filed by plaintiffs with successful businesses in Second Life who discovered that another avatar was duplicating and selling unauthorized copies of their products in-world. The plaintiffs sued because the defendants wouldn't agree to stop their activities, and the reputation of their products was at stake. In the first case, Eros v. Leatherwood (No. CV-01158-SCB-TGW), filed in July in a U.S. district court in Florida, the plaintiff had to subpoena Linden Lab and the defendant's Internet service provider to discover the person behind the avatar. In the second case, Eros v. Simon (No. CV-07-4447), filed in October in a U.S. district court in New York, Eros joined with five other content creators to sue a Second Life resident who found a way to create and sell numerous unauthorized copies of the plaintiffs' virtual products in Second Life. The first case is pending, and the second settled in December. And in a case closely watched by game publishers as well as other virtual-world providers, Pennsylvania attorney Marc Bragg sued Linden Lab and the company's CEO, Philip Rosedale, in 2006, claiming that Linden had unfairly terminated his account, denying him access to his virtual property. Linden countered that Bragg had found a way to "spoof" the system and purchase land at below-market rates, violating its terms of service agreement. The case was removed to federal court at Linden's request. The result was a ruling that Linden's terms of service were a contract of adhesion and the arbitration clause was unconscionable, effectively denying Second Life participants a means of resolving disputes. (Bragg v. Linden Research, Inc., No. 06-4925.) Last September, Linden changed its terms of service, allowing subscribers to resolve claims of under $10,000 through "binding, non-appearance-based arbitration." Bragg settled with Linden in October, and his account was restored. Under the terms of the settlement, Jason A. Archinaco, Bragg's attorney and a partner at White and Williams in Pittsburgh, could say only that the case was amicably resolved and that no one admitted liability. "From a personal standpoint, I would have loved to have tried the case and seen some of the issues resolved," Archinaco says. "It was one of the first virtual-property law cases in the country." One result of the Bragg case is that "all of the things that have been fairly predictable about terms of service agreements have now been thrown up in the air," says Roxanne Christ, a Latham & Watkins partner who has online game publishers and virtual world providers as clients. "What does this mean for click-wrap terms of service and the enforceability of arbitration agreements?" she asks. Her advice to clients: Be evenhanded and give people a way to back out or get refunds. Chuleenan Svetvilas is the managing editor at California Lawyer. |
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Megan Kinneyn
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