Subclass of Virtual Owners Alive in Real Life

(CN) - A federal judge partly certified a class of "Second Life" users in a legal battle over the meaning of "ownership" in the virtual world.

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

A group of "Second Life" users sued Linden and its former CEO Phillip Rosedale in San Francisco Federal Court in 2010, claiming the company lied about the nature of "ownership" within the virtual world.

Plaintiffs Evans et al. 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.

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 removed the word "owned" from the website, after a dispute over confiscated virtual property, the plaintiffs say.

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

Plaintiffs claim that "Second Life" users had actual ownership rights.

Linden claims that users own copyrights in the virtual land and items, but do not have ownership interests beyond what is provided in the terms of service.

"You have to remember this stuff isn't real. It's a game on a computer," defendant's counsel said at oral argument.

The plaintiffs sought to certify two classes - a main class of "Second Life" users who owned, bought and sold virtual items; and a subclass of users whose assets were "converted, taken, 'frozen,' or otherwise rendered unusable."

U.S. Magistrate Judge Donna Ryu certified the subclass of plaintiffs, but denied the motion in all other respects.

Ryu concluded that the plaintiffs failed to prove that they suffered economic damages sufficient to bring consumer fraud claims against Linden.

Saying the proposed main class is "imprecise, overbroad, and unascertainable," Ryu denied the motion to certify that class.

The subclass of plaintiffs includes users "whose virtual items, lindens, and/or U.S. dollars were taken without compensation."

Ryu found the subclass met the requirements for certification.

"The Subclass A claims alleging conversion, intentional interference with contract, and unjust enrichment seek compensatory and punitive damages as well as injunctive relief, and the alleged injury is directly tied to the value of the virtual land, items, and currency remaining in the terminated accounts," the judge wrote.

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