A common strand underlies much of what we do: the law, legal education and legal services. That is in real life. These days, technological developments are also driving fundamental changes in customer behaviour and expectations. This creates exciting opportunities for businesses that use such communications. It especially throws up the challenge of finding better ways of engaging with customers. Law schools and professional legal services firms are themselves businesses, are keen to position themselves in the market using such innovative advantages. This article is about the world of “SL” (SL), one very important contemporary example.
The LegalIncite “SL” Survey 2011
To get an overview of current attitudes to SL, a survey was advertised on the BPP VLE Blackboard (“the Survey”), Twitter and Facebook. There were 20 respondents in total; this article will refer to main findings from this small study where relevant. There was an even spread of ages from 16 to 63. 95% of these said they enjoy using computers, and 85% said they are good at using computers. However, only 26% said they would wish to join SL currently.
History
SL is an online virtual world developed by Linden Lab, which was launched on June 23, 2003. SL users, called Residents, interact with each other through avatars. Residents can explore the world (known as “the grid”), meet other residents, socialise, participate in individual and group activities, and even create and trade virtual property and services with one another. Since opening in 2003, “SL” has experienced strong growth. Now some 1.3 million people around the world log on to live out their second lives.
The economy
SL has an internal economy and internal currency, the Linden dollar (L$). L$ can be used to buy, sell, rent or trade land or goods and services with other users. Virtual goods include buildings, vehicles, devices of all kinds, animations, clothing, skin, hair, jewelry, flora and fauna, and works of art. Services include “camping”, wage labour, and business management. L$ can be purchased using US Dollars and other currencies on the LindeX exchange provided by Linden Lab, independent brokers or other resident users. Profits are derived from selling virtual goods, renting land, and a broad range of services. 84% in our survey said that they did not like this notion of real-life money being exchanged for L$.
Many argue that it is impossible to divorce SL from regulation. On July 26, 2007, Linden Lab announced a ban on “in-world gambling”, in fear that new regulations on Internet gambling could affect Linden Lab if it was permitted to continue. The ban was immediately met with in-world protests. 74% of respondents in our Survey felt there should be laws on gambling.
Law School
At Harvard, Charles Nesson, the Weld professor of law, is offering “CyberOne: Law in the Court of Public Opinion,” not only to Harvard Law School (HLS) students, but also to Extension School students as well as Internet users across the globe. Nesson drummed up interest in his ‘filled-to-capacity’ course through a YouTube promotional tape in which he describes its content after a dramatic entrance on a scooter. The tape is mostly narrated by his avatar, a significantly younger-looking SL persona. His daughter, Rebecca N. Nesson , a Harvard Law School graduate and Harvard computer science doctoral candidate who is co-teaching the course, also makes an appearance in the promo, saying, “in SL, the possibilities of what we can do are endless” as she, in fact, transforms into a butterfly.
Legal services
Across the pond, Field Fisher Waterhouse (FFW), which has a substantial media, technology and intellectual property service, has become the first major, international law firm in England to open an office in a virtual world. David Naylor is the FFW partner behind the initiative, and apparently found much support from FFW in investing in this project given its existing client-base; his avatar is “Solomon Cortes”.
The two-storey virtual office boasts the same meeting rooms, corporate art collection and giant presentation screens that can be found at any self-respecting City firm. It even includes a roof terrace with a water feature. Multi-national businesses such as Dell, Nike, Mercedes and Calvin Klein have sought to establish their brands in SL and David hopes that having a virtual presence will help attract them as clients in the “real world”.
Various corporates have already expanded their branding to virtual environments too. Nike has a virtual clothing store, and car manufacturers such as Nissan, Pontiac and Toyota have entered SL. There are even businesses that specialize in launching and integrating real-world brands into the virtual world
SL is not yet sufficiently developed for a debate to have taken place over which, if any, legal jurisdiction applies. However, David insists that, with real business being carried out and real money changing hands albeit in SL’s own virtual currency, companies operating there need legal advice. So far the list of businesses operating in the virtual world is not limited to standard retailers with a tangible product to sell. Professional advisers such as ABN Amro, Accenture and PA Consulting have already established a presence and rumours are circulating that several accountancy firms are planning similar moves.
In addition to attracting new clients and winning publicity for the firm, David believes his new office can be used to help existing clients and staff by hosting virtual seminars, conferences and training days. It will also be a useful recruitment tool in the increasingly competitive market for young legal talent. Like real life, there is a close relationship emerging between legal education and professional legal services.
The Law
An impressive 79% in our Survey felt that SL needed some sort of regulation, but a smaller proportion (63%) believed there should be a ‘comprehensive set of laws’.
It is estimated that each day in excess of $1 million USD worth of transactions take place in SL. Therefore, it is no surprise that the virtual economy of SL has resulted in trademark and copyright infringement lawsuits being brought in U.S. courts. In a lawsuit filed on October 24, 2007 in the Eastern District of New York, a group of virtual merchants selling virtual products in SL sued Thomas Simon. The virtual merchant appellants claimed that Simon willfully made unauthorised copies of their copyright and trademark protected products, and Simon misrepresented that the products he sells are authentic ones. The appellants sold adult-themed virtual items, including furniture, shoes, and skins to cover the avatars. The complaint included claims of unfair competition under Section 43(a) of the Lanham Act, copyright infringement under the U.S. Copyright Act, and counterfeiting of a registered trademark. This case settled in December 2007.
Bragg v Linden Labs (2007)
Indeed, real life can meet the virtual world of SL. In 2006, Pennsylvania lawyer Marc Bragg (“Marc Woebegone” in SL) brought a lawsuit against Linden Lab, when his account was unilaterally disabled by SL administrators. Linden Lab claimed that Marc Bragg had violated their Terns of Service by URL-hacking the SL virtual land auction website in order to gain access to otherwise unavailable auctions. As a result, Bragg was able to purchase virtual land within SL valued at $1,000 for approximately $300. Bragg’s account was suspended while Linden Lab conducted an investigation, and later closed completely. Bragg argued that by closing his account, Linden Lab also dissolved his virtual assets, which he valued at between US$4,000 and US$6,000.
This case was particularly interesting as the Court held an arbitration clause within Linden Lab’s Terms of Service – a web-based ‘clickwrap’ agreement – to be invalid. The clause was held to be unconscionable as there was no room for negotiation, the clause was inconspicuously printed, and since no other virtual world offered ownership rights, Bragg was deemed to have no alternative market choice. Additionally, the arbitration procedure was deemed too expensive to offer Bragg any realistic recourse for disputing Linden Lab’s actions. However, overall, ss proceedings continued to advance, perhaps the most interesting aspect of this case to date has been the Court’s willingness to engage with the concept of virtual property rights.
Conclusion
In less than a decade, a virtual world has evolved at a staggeringly fast rate. In this time, businesses for products and services have evolved, but so also has the scope for problems. Like real life, the law has developed to try to solve these problems, and it may be getting to the stage now where it can begin to anticipate new problems. It remains to be seen whether a set of comprehensive laws will develops, and what jurisdiction these laws will have, or whether the law will progress on a case-by-case basis as a judge-made law. Whatever the exact mode of evolution, innovative and talented lawyers will be especially keen to follow the progress of SL, in its effect on the law, legal education and legal services.
