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Cash Settles ‘Second Life’ Users Virtual Money Suit

(CN) - The creators of the virtual world "Second Life" will pay both real and virtual money to settle a class action from gamers, a federal judge ruled.

"Second Life" is a virtual world in which users create characters that run businesses and buy and sell virtual items using virtual money called "lindens."

Users pay Linden Research monthly "tier fees," similar to property taxes. Linden says the fees are used to maintain the server.

Carl Evans and other "Second Life" users led federal class action in 2010 against Linden and its former CEO Phillip Rosedale, claiming that the company lied about the nature of "ownership" within the virtual world.

They said Linden "made a calculated business decision to depart from the industry standard of denying that participants had any rights to virtual items, land and/or goods."

To set itself apart from online role-playing games, Linden "globally represented to participants ... that their ownership rights and intellectual property rights to the virtual items, land and goods held in the participants' accounts would be preserved and recognized," according to the second amended complaint in San Francisco.

The plaintiffs say the "Second Life" home page used to state: "Second Life is an online, 3D virtual world, imagined, created and owned by its residents."

But sometime after 2007, Linden allegedly removed the word "owned" from the website, after a dispute over confiscated virtual property.

Then in 2010, Linden modified its Terms of Service to say, "virtual land is in-world space that we license."

The plaintiffs sought to certify two classes of users, and a federal judge approved a class of "Second Life" users whose "virtual items, virtual land, and/or currency in lindens and/or U.S dollars have been deliberately and intentionally converted by defendant Linden's suspension or closure of their Second Life accounts."

In March 2013, the parties reached a settlement agreement, which was executed in May.

The agreement stipulates that Linden will return money to the class members' PayPal accounts, as well as "up to 100%" of the amount of Linden dollars.

As of August, the amount of Linden dollars was around $43,000, which values at around $172,000 U.S. dollars.

Linden also agreed to pay two Linden dollars per square meter of virtual land owned by the class members, which is worth around $2,200. The company will also refund the $1,000 setup fee for a user who owned a virtual island.

After finding the revised settlement agreement was fair, reasonable and adequate, U.S. Magistrate Judge Donna Ryu granted preliminary approval on Oct. 25.

A hearing on the final approval will be held on Feb. 27, 2014.

Plaintiff Naomi Hemingway had moved for the settlement approval.

The class is represented by Jason Archinaco and Robert Bracken of Archinaco/Bracken LLC and Michael Aschenbrener of Aschenbrener Law P.C.

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