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A lawsuit over the ownership of virtual land in an online community may signal the beginning of a new type of litigation as the industry grows and players spend more time and money in virtual worlds. Pennsylvania resident Marc Bragg sued San Francisco-based Internet game company Linden Lab and its president and CEO earlier this month for alleged conversion, fraud, unjust enrichment and breach of contract and for allegedly violating several California laws. After a dispute over a land auction, Linden seized Bragg’s virtual land as well as an account with $2,000. The case is Bragg v. Linden Research Inc., 06-08711 (Chester Co., Pa., Ct. C.P.). CUSTOM ‘CURRENCY’ In the Linden game “Second Life,” the company collects revenue through land sales and taxes, and players earn money by leasing and reselling land or through other types of business ventures, like creating and selling high-fashion clothing for other players’ avatars or characters. Most transactions occur in a special currency created for the game called “lindens.” Participants spend U.S. currency to buy lindens, but they can also earn lindens through transactions in the game or through selling products or land through third-party auction sites like www.eBay.com. Players typically amass accounts of lindens that can be cashed out. Linden allegedly seized Bragg’s land and account on the ground that he bought an unused parcel of land by starting an unauthorized auction. Linden had not yet put the land up for sale, but Bragg said he learned from users’ forums that Linden’s system allowed players to start an auction by putting the land parcel’s identification number into Linden’s own land-auction system. They called Bragg’s purchase of land that was not for sale an “exploit” of the system. The case is one of the first lawsuits involving virtual property, but many more are likely to follow, said Greg Lastowka, an assistant professor at Rutgers School of Law in Camden. “The idea of property in virtual worlds is not a stretch,” Lastowka said. Lastowka said virtual property is a type of digital property similar to domain names. Laws that apply to chattel, or personal, movable property, are more applicable than real estate law, said Lastowka. An earlier lawsuit over players’ rights to sell virtual property � such as armor and weapons � acquired in an online game on other Internet auction sites was filed in 2002, but was withdrawn several months later. The plaintiff, BlackSnow Interactive, hired workers to play a Mythic Entertainment Inc. virtual game in order to obtain game items for resale to other players. BlackSnow withdrew its lawsuit over its right to sell the items outside the game � and the players’ rights to buy the items � with plans to arbitrate the dispute. The company went out of business before the resolution of the matter. The case is BlackSnow Interactive v. Mythic Entertainment Inc., 02-00112 (C.D. Calif.). Bragg’s virtual land is comparable to real land because he paid cash for it and “Second Life” is more of a business than a game, said Bragg’s lawyer Jason Archinaco. Bragg also earned income, in “lindens,” by renting land acquired during about six months of play. “The bottom line is: Does he own the land or not?” Archinaco said. Through a spokeswoman, Linden Lab declined to comment on an “old case” that Bragg refiled in a different court. Bragg withdrew a pro se complaint he filed in a Pennsylvania magistrate court in May to get access to equitable relief in the Pennsylvania Court of Common Pleas, Archinaco said. USER AGREEMENT IS KEY Ultimately, the Bragg case is likely to turn on whether the user agreement trumps his property rights, Lastowka said. “The question is: Do the non-negotiable contracts that let you participate and buy things in games, do they trump any possible property interest you might acquire in the game?” Lastowka said. Lauren Gelman, associate director for the Stanford Law School Center for Internet and Society, agreed that owning virtual property is similar to owning property in the real world. Owners of both types of land have rights, but also responsibilities, she added. Owners must follow zoning laws in the real world and user agreements in the virtual world, said Gelman. “If Linden has set up rules through their terms of service to protect the rest of the users, that’s a completely reasonable business decision,” Gelman said. Sheri Qualters is a reporter with The National Law Journal, a Recorder affiliate based in New York City.

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