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Current Issue : Spring 2008

Regulating Your Second Life

The turn of the 21st century has marked the "Age of the Internet," as technology has exponentially advanced so that a three-dimensional, self-sustaining virtual world can now mimic the real world with alarming accuracy. Designed to be more than an interactive "chat room" for conversations or a "game" with set objectives and goals, Second Life is a three-dimensional virtual world created by Linden Research, Inc. ("Linden Lab"). It is ostensibly a free-range graphical environment where over 5 million1 users explore, interact, create, and trade as they do in real life—only this happens, of course, in a "second life." Nearly every object in Second Life, from cars to clothes to characters, is created by its inhabitants using scripting tools and other design programs. Second Life also runs on a synthetic economy in which "real-world" money is converted to digital currency (Linden Dollars) and then back to usable dollars. Because users retain the rights to their digital creations, they can create, trade, sell, or purchase any creation with other users, which furthers the growth of this in-world economy.2

Linden dollars may be reconverted to real-life currency at online currency exchanges, and some users, or "residents" in Second Life jargon, have profited significantly, earning real income from the sale of digitally created products and digitally created land. Because of the potentially high return of profits, some residents have even supplanted or replaced their real-life careers with their online transactions. This raises the question whether a virtual industrialist would have any legal recourse if another resident tarnished his or her reputation by spreading defamatory statements. Insofar as a resident's business depends on his or her reputation in the metaverse, and where harm incurred there is as real as it would be in the natural world, the law should be able to protect these Second Life users from any real torts that may arise.

Although the issue of "virtual" harm has never been raised in real-world courts, virtual worlds like Second Life have become increasingly significant in terms of both time and money for their users. Thus, it is important to develop theories of how the law may apply to and resolve disputes that originate in these worlds.

The Second Life Phenomena

To take part in Second Life, a user first registers with the Second Life Web site by creating a free account, setting up a name and basic character to use, and downloading the Second Life application to begin using the program. A user may also acquire money by converting real-world dollars for Linden Dollars with third-party operators or at Linden Lab's currency exchange, LindeX. The user must create a virtual "avatar," which is a graphical persona or likeness, to represent the user in the virtual world, i.e. her "in-world" self. Avatars are three-dimensional pictorial models that can be altered to meet a user's specifications.

Unlike some online communities that are set in fantastical worlds where the players must earn "winnings" to continue to play in the game, the purpose of Second Life is to provide an interactive meeting ground and marketplace where people are not limited by the confines of real-world physics; users here can accomplish more than what is physically possible in the real world. In Second Life, the residents create and market every item that other residents use. They interact, shop, create communities, travel, and even retain jobs. Any virtual endeavor is possible, whether it be buying and selling real estate, setting up shopping malls to outfit other avatars, or putting together a political rally based on real or fictional controversies. Users also retain complete intellectual property rights for all digital goods that they create in Second Life, and these rights are fully enforceable both in-world and offline.

Moreover, as intangible as the items and characters may seem, the currency exchanged in Second Life is not. Second Life users exchange real money for digital items and services that exist only in-world. Second Life markets at least 7,000 profitable businesses in which the users supplement or derive their main income from their in-world participation.3 In fact, a number of residents have earned nearly six-figure salaries due to their virtual entrepreneurialism. In 2005, each of the top 10 in-world entrepreneurs averaged over $200,000 in annual profits.4

In part because Second Life provides a "one-of-a-kind virtual experience"5 where its residents can make real money from virtual concepts, it has attracted and sustained a loyal and widespread global audience. Many real-world industries have decided to take advantage of the commercial marketing opportunities in Second Life. With the influx of technological advancements in Internet usage and opportunities offered by virtual worlds, the law must do the same in order to protect the livelihood of Second Life users.

Defamation in Virtual Worlds

As more users participate and find innovative ways to make full use of the virtual platform, Second Life will eventually evolve from a digital medium of social interaction to an actual, organic culture. When real-world concepts, such as business transactions, money, and interrelated societies, are imported into virtual spaces, proper governance in the form of laws and code must be guaranteed. Currently, Second Life offers some relief for transgressions by its users, including two governing documents that spell out what conduct is prohibited or permitted: the Second Life Terms of Service ("SL TOS") agreement and the Community Standards Agreement.

However, while these agreements help ensure that no one resident oversteps his or her social boundaries when interacting with another resident, they are still insufficient protection measures when more serious injustices, particularly torts, are committed against them by other Second Life participants. In fact, that defamation will occur is more likely than it may appear, as real-world and virtual identities may clash at any time and the line between role-playing and real-playing is easily blurred. Legal remedies are essential to protect against virtual crime and bullying, because merely exiting Second Life, an obvious potential solution, is not necessarily the best option for a resident who has devoted time and money in the virtual worlds. A resident's exit, forced or self-imposed, from Second Life is often an unjust option because of the total investments in the virtual space and the desire to maintain social connections. Moreover, account terminations may not be a viable solution when victims of in-world crimes have suffered an actual loss, pecuniary or not. Courts should consider virtual tort claims brought by Second Life residents and protect these residents who have integrated their online livelihood into their actual lives.

At the outset, one question that arises in the discussion of how law intersects with Second Life is whether current real-world legislation could successfully apply to virtual claims, specifically defamation. As all activity in these worlds is contingent upon the interactions between users, defamation is the paradigm violation of virtual communication and expression. Whether for economic reasons or not, virtual world participants rely on their reputation, and this dependency receives more heightened emphasis in Second Life than in any other platform because a resident's existence relies on his or her interactions with and reputation among other residents. For this reason, Linden Lab expressly proscribes defamation in Second Life in both of its governing documents. Both the SL TOS agreement and the Community Standards Agreement strictly prohibit a user from engaging in defamatory actions that "marginalize [or] belittle" any Second Life resident.6 Defaming an individual or group may result in banishment from the Second Life community entirely.

  1. Second Life Frequently Asked Questions, (last visited Mar. 29, 2007).
  2. Second Life, IP Rights, (last visited Mar. 29, 2007).
  3. Virtual Online Worlds: Living a Second Life, Economist, Sept. 30, 2006, at 62, available at 2006 WLNR 16831134.
  4. Id.
  5. Henry S. Kenyon, Second Life Opens New Vistas, 3 Signal Connections (Armed Forces Comm. and Electronics Ass'n), June 15, 2006, available at,0,w.
  6. Second Life, Community Standards, (last visited Mar. 9, 2007); Second Life, Terms of Service, (last visited Mar. 9, 2007).
"To prevail in a defamation action, the Second Life plaintiff must first establish that it was she who was defamed and the defendant was the one who caused it, even if the defendant had no intent to defame the plaintiff."