Bragg v. Linden Research, Inc.: A Second Life?
on November 29, 2010 at 9:21 AM
Second Life after Bragg
The extent of property rights in virtual worlds is a hot-button issue that has spawned a storm of academic commentary in the past few years, and Linden Research, the creator of the virtual world known as Second Life, is a lightning rod. Those of you who remember a case by the name of Bragg v. Linden Research, Inc. from 2007 will be interested to know that it may be granted a “second life” of sorts.
On April 15, Second Life users (Carl Evans, Donald Spencer, Valerie Spencer, Cindy Carter) brought a class action suit in the Eastern District of Pennsylvania against Linden Labs, Inc. and its former President, Philip Rosendale. The Plaintiffs’ stated purpose was to “define the rights of purchasers of virtual property in Second Life,” and to obtain “monetary damages and injunctive relief on behalf of Plaintiffs and others similarly situated.” As the complaint states, Linden Labs used the opportunity to retain all property rights in real land as a major selling point until the Bragg case, at which time the company began altering the language in its contractual provisions regarding ownership. The effect, the complaint alleges, was the transformation of ownership rights into limited access licenses. While this might be acceptable for future buyers, the complaint argues that Linden applied the provisions retroactively and unilaterally without giving existing virtual landowners the option to convert their Second Life assets back into American currency. Thus, the Plaintiffs allege that Linden unlawfully converted their property without compensation.
Of legal interest is the Plaintiffs’ decision to file in the same district as Bragg, which renders them an important procedural advantage: offensive non-mutual collateral estoppel. This will allow Plaintiffs to use some of the damaging admissions that Linden made in Bragg to their advantage while preventing Linden from re-litigating those issues. Some of those issues include the validity of Linden’s arbitration clause and the unconscionability of Linden’s terms of use agreement.
Perhaps most significant about this case is its potential to provide legal scholars and practitioners with some legal precedent for future disputes. As of now, all three cases regarding virtual world property rights, (including Bragg) have been settled, and thus provide little guidance as to how to proceed with future litigation involving virtual world property rights. To be sure, this case breathes new life into realms of legal interest both avante garde (virtual world property rights) and mercifully forgotten (offensive non-mutual collateral estoppel)—whether it does so in a meaningful way is yet to be seen.