Second Life publisher sued: Bragg v. Linden Research
by James Ransom-Wiley 
{ May 18th 2006 at 3:55PM }
Attorney Marc Bragg has filed a lawsuit against Linden Lab, publisher of Second Life, alleging that the company unfairly shutdown his game account, cutting off access to his virtual real estate, which includes several nightclubs. In addition, Bragg can no longer withdraw any of the linden (Second Life currency) he has earned, which if exchanged (in total), would be worth roughly $3,200. The West Chester attorney is now demanding $8,000 in restitution.Linden Lab froze Bragg's account after the attorney took part in a suspicious online auction in which he acquired significant plots of virtual land for far below market price. Bragg indeed exploited the auction interface to snag the land at a discount, but maintains that the onus is on Linden Lab to run their auctions properly and securely.
[Thanks, chris]
Reader Comments (Page 1 of 1)
patrick @ May 18th 2006 4:02PM
if they want to cancel his account, fine, but give him his damn money back.
i mean, duh.
David @ May 18th 2006 4:02PM
I can't help but notice all the "onus" usage I've seen everywhere since that MGS trailer ^^
Spoonbender @ May 18th 2006 4:02PM
"the onus is on Linden Lab to run their auctions properly and securely"
Isn't that what they're doing by suspending his account? :)
nintendo fan @ May 18th 2006 4:03PM
Isn't that kind of like blaming the bank for not having good enough security after you robed it?
Presentlight @ May 18th 2006 4:03PM
The line between Virtual reality and Real reality has just been erased.
Geoff @ May 18th 2006 4:07PM
Yeah baby! Virtual property meets real world litigation. I don't even know why this makes me so happy. I guess I am just tired of reading articles about how great Second Life is. I can't wait for the day that the Second Life society collapses upon itself in a flaming wreck becoming a virtual post-apocalyptic society. When hyper-inflation like that of Weimar Germany rocks them to the core. Oh, how I will glory as there society shatters into ruinous ruin, chaotic chaos, and deviant deviousness. I will laugh, a hearty laugh, when their economy collapses. Welcome I say, welcome! Welcome the forces of social inequality, depravity, and moral decay so that they may destroy this vile society and leave nothing left but a miserable huddled mass unable to speak or think. May the forces of darkness unleash themselves with great haste.
Jose @ May 18th 2006 4:26PM
Good call Nintendo Fan. I'd really like to know a little bit more about this online auction, and how much money Linden Lab lost in the sale. I'd just consider those $3200 a fine for engaging in such shifty practices.
Isn't there virtual law in Second Life. The law should protect it's citizens as well as it's creators, as they both have virtual and real monetary stakes in this world.
Sergio @ May 18th 2006 4:27PM
From the ToS:
2.6 Linden Lab may suspend or terminate your account at any time, without refund or obligation to you.
Linden Lab has the right at any time for any reason or no reason to suspend or terminate your Account, terminate this Agreement, and/or refuse any and all current or future use of the Service without notice or liability to you. In the event that Linden Lab suspends or terminates your Account or this Agreement, you understand and agree that you shall receive no refund or exchange for any unused time on a subscription, any license or subscription fees, any content or data associated with your Account, or for anything else.
Next!
Insomnia Bob @ May 18th 2006 4:32PM
Just to clarify, here, guys. He's not suing for money he SPENT. He's suing for INCOME he can no longer access.
The guy is a virtual MOB BOSS! He owns virtual nightclubs, which probably have virtual whores in them. Do he have virtual enforcers? Hm.
Anyway, the point is, this guy made a decent chunk of money off his virtual land, which was obtained by shifty virtual dealings.
That's kinda cool. In a creepy, 'What the hell is happening to our society?' kind of way.
josh @ May 18th 2006 4:38PM
"your honor... YES i did steal the money from the bank... but they didn't have a security guard posted at the time and they left the door open"
Khidr @ May 18th 2006 4:43PM
Sergio:
The enforcability of the TOS is an entirely different can of worms. Click-wrap or shrink wrap contracts have had mixed results in the courts at best. It comes down to consideration at the end of the day. The question from a real world perspective is whether or not it is okay to steal the getaway car of the thief that just burglarized your house. If the attorney manipulated the auction, I think Linden has a seperate cause of action against him, but I don't think if he's invested real money in virtual assets, they get to seize them as a result.
Or, maybe the internet is some sort of new frontier of lawlessness where an eye for an eye holds.
LaughingTarget @ May 18th 2006 4:46PM
Their ToS is too vague to properly stand up in court. The way that ToS is read, Linden Labs can up and drop any account of any player that has a substantial amount of valuable "property" in the game and auction it back to other players without any reason. Doing that would poke holes in the improper contract being presented by the ToS, especially since Second Life is moving into the realm of individuals owning personal property, not just renting it as server space.
Now, in the case of THIS trial, if it turns out to be a clear cut case of fraud, no matter how you read the ToS, this guy shouldn't get a dime.
Jose @ May 18th 2006 4:51PM
You guys are nuts, I never heard any of that crap in Tails of Symphonia.
Braveerudite @ May 18th 2006 5:59PM
A word to the looser (Bragg) Uninstall "Second Life" log off your first life.
steve @ May 18th 2006 6:00PM
"Isn't that kind of like blaming the bank for not having good enough security after you robbed it?"
Not even close. The guy legally participated in an auction (which apparently had no reserve). Because of the way Linden designed their auction system and URLs, Bragg was probably the only one to find this auction. If a company wants to auction off property, it's their responsibility to make sure a large enough market knows about it to make the price reasonable. Linden shouldn't be running live auctions that most people won't find.
It's like the people who find deals on eBay searching for misspelled items. Are you doing something wrong if you bid $20 and win a 'Roolex' watch that would have sold for $200 if the owner had listed it spelled correctly as 'Rolex'?
Chowweekly @ May 18th 2006 6:48PM
I hope he doesn't win because he knew what he was doing was wrong. If you try to steal something and you get caught you have to pay for it and you don't get to keep it. This discourages people from trying to steal things just to see if they can get away with it.
If he does somehow get his money back he should only get the money that he spent on the auctions. If he gets the extra money for his lost businesses that validates virtual property as legally having real-life value. This might sound like a good thing but this is a VERY BAD thing for online gamers. Developers will have to deal with tons of legal issues and probably won't want to make these sorts of games anymore. And what about all the minors who are now technically making over $1000 a year? Will 13-year-olds have to fill out tax forms? Is virtual property tax-exempt? If it isn't won't that start to mess with our real world economy? Once people realize how much money is to be made and start playing the game as though it's a business will it be fun anymore? I can only imagine people becoming even more rude in online games. You know that 1337 item that only has a .2% chance of dropping that you really NEED but the guy who can't even use it snatches it up because it's worth 200 gold which translates into $5 in real-life? Imagine a server filled with these guys.
Tom Hayden @ May 18th 2006 7:01PM
For really good legal analysis of this case, go here:
http://www.orinkerr.com/2006/05/08/virtual-land-deal-goes-sour-and-leads-to-lawsuit/#comments
The ZeroCorpse @ May 18th 2006 7:28PM
Funny... If this case survives, then the other MMORPGs, which deal in gold, will suddenly have a real legal value for all those gold pieces.
We'll be back to the gold standard! Except this time, it's virtual gold!
Geist @ May 18th 2006 8:21PM
I find it extremely interesting when legal matters arise that involve real-world laws being applied to a video game, like this.
Justin @ May 18th 2006 8:35PM
Onus is one letter away from... he he... hee hee hee hee... i can't, i can't..... hehehehehehehe.
DaveKap @ May 18th 2006 10:46PM
Wow Geoff, you sound like an anarchist who wants the American government to crumble or something. Did somebody in Second Life grief you really bad? Asking for Second Life to die is like asking for the world-wide-web to die. It's supposed to be the metaverse after all.
I'm surprised nobody has said "He who represents himself in court has a fool for a client."
Sera @ May 19th 2006 12:14AM
Might as well explain what happened so you guys get the whole picture.
SL Is a Grid based world. The overworld is a huge grid, with each square of the grid called a "sim" or "simulator". Since SL is expanding rapidly, they are adding new sims constantly to the grid, and since there are land barons who make money by buying new sims, and selling it to the other residents, these new sims are auctioned off for RL money.
Before the sim is auctioned, it is activated on the grid and becomes accessable, this is while they are testing the sim's stability. (It's usually about 5 sims to 1 rl server) Once the time comes, they will start the auction for the sim with a $1000 minimum bid, and it will appear on the auction page for people to bid on.
What Marc did was he went to one of these not yet auctioned sims, and grabbed the sim id number off of the sim's information page. He then went to an existing auction page, and changed the variable in the url to point the page to the not yet auctioned sim. He then was able to activate the auction with a bid for 1 dollar, on an auction that nobody else would ever see, that would eventually be started with a 1000 dollar minimum bid.
Since nobody else could see that the auction was active, he ended up winning the sims that he was bidding on for 1 dollar each. 999 less then the normal minimum bid, and much much much less then the normal final bid. Realizing that the auctions all of asudden were posted as "completed auctions" and people started seeing sims selling for 1 dollar, he quickly tried to dump the land off on other residents by chopping it up into little bits and selling it for WAY under market value.
So what ended up happening, is people ended up buying up this cheap land off of Marc, so now LL had a Customer Service nightmare on their hands, since these people were living legally on a sim that the previous owner got illegally.
They did the only thing they could do, and banned Marc.
Note: the minimum bid on the auctions is to cover the actual cost of the server hardware that the sim is on. So buying 5 sims for 1 dollar each, is a multi-thousand dollar loss for LL
Andy @ May 19th 2006 4:10AM
Thanks 21. that really cleared up all the questions i was about to post!
adeel @ May 19th 2006 8:05AM
its shitty when idiots like this guy abuse online 'PRIVELAGES'.
I hope the judge bans his ass from ever going online again and straps a house arrest tag to his leg. And then he should be pai a visit by RL Security guards and kicked the shit out of, and when he complains, RL can plead ignorance because all their security guards are VIRTUAL, so how did they kick the shit out of him... hmmm.. now thats how it should all end.
Giovanni Liberty @ May 19th 2006 5:30PM
This lawsuit brings up interesting discussions regarding items heretofore not discussed. If I purchase land in second life, create a virtual casino on my sim (an SL term for a plot of land), and people walk into my casino and spend money inside the casino, and I earn an income worth $10K a month in real life, should I pay taxes on it (this scenario exists already)? Should Linden be required to send a 1099 to the IRS? Should I have a gambling license in the state that servers are located? If I sell virtual land at a profit, should I pay short term or long-term capital gains on the profit of the sale of the virtual land? If I create a virtual adult club, do the township ordnances regarding sexually explicit materials or establishments legally bind me in my city or in the town of the headquarters of the company? I can cash my currency out into real US dollars, and we have seen examples of people inside Second Life making real world incomes of $250K annually. If I design a line of virtual clothing, and people steal that design, is that copyright infringement? Second Life is a $60M world and growing. These issues are not going away.
Eep @ Jul 20th 2006 4:33PM
Not only is land owned by residents, but their objects (inventory "content") as well, which I am in the process of persuing legal action against Linden Lab for unjustly banning my Second Life (SL) account and not giving me my content I have spent the last 1.5+ years creating. I own the rights to it so I should be entitled to it. See my SL website at http://tnlc.com/eep/sl/ for more info.