Linden Lab's laundry list of legalese: Terms of Service versus Fair Use
Filed under: MMO industry, Opinion, Second Life, Legal, Virtual worlds
'I cannot read the fiery letters,' said Frodo in a quavering voice.
'No,' said Gandalf, 'but I can. The letters are English, of an ancient mode, but the language is that of Lawyers, which I will not utter here. But this in the Common Tongue is what is said, close enough:
'You agree to review and adhere to the guidelines on using "Second Life," "SL," "Linden," the Eye-in-Hand logo, and Linden Lab's other trademarks, service marks, trade names, logos, domain names, taglines, and trade dress..'
He paused, and then said slowly in a deep voice: 'These are the Master Rules, the Terms of Service that rule all accounts.'
It's our general impression that the goal of a company's lawyers is to essentially have little or no work. That's hardly surprising, really. If your company lawyers are extremely busy then your business is probably under threat, regardless of whatever it is that they're busy with - from copyrights to contracts.
Monday's trademark policy announcements from Linden Lab to Second Life users are fascinating, at many levels. Firstly the average user can't tell the difference between trademarks and copyrights, and probably isn't very clear on either. Second, the changes with the Terms of Service pull a legal switcheroo on users, taking the matter from trademark law to contract law.
You see, a lot of people who routinely use Linden Lab's trademarks do so in an entirely legitimate way. It's nominative fair use established by case-law under the Lanham Act. Basically you can't talk about Second Life without actually saying Second Life. You can't reasonably talk about Linden Lab without saying Linden Lab -- oh, you could say Linden Research Inc, but hardly anyone would have any idea who you were talking about which defeats the point.
So there are fair uses of trademarks (noting that this has nothing whatsoever to do with fair use in copyright law) -- which is why you don't see newspapers littered with trademark symbols and disclaimers of association. The usage is protected by law, so long as you meet the legal tests.
Monday's Terms of Service changes act (intentionally or not) to destroy that fair use, by switching the domain of the debate. We don't know who made what changes, but you can't imagine that the legal people would have been ignorant of the effect of the ToS changes.
Essentially, if you logged in after the ToS changes on Monday, you've agreed to do two things.
1. You've agreed to review all the policies at the new Brand Center. You already did that, as a part of your new agreement with Linden Lab, right?
2. You agreed to abide by them. Period. Without exception. Which means no legally protected fair-use, because that violates the guidelines, and hence your agreement via the ToS with Linden Lab.
You've agreed, and your account is hostage to that agreement -- in the event that someone at Linden Lab should choose to make it so.
Why the extra wordage in the Terms of Service? From a legal standpoint it seems completely unnecessary. A change in the Terms of Service isn't even required. The law coupled with the guidelines in Linden Lab's Brand Center already provide a complete picture, and Linden Lab can already suspend or terminate your account "for any reason or for no reason"
The Terms of Service change in that context gives the impression of being a veiled threat. It's more than that, though -- it commands you to give up your rights to nominative fair use where that use conflicts with Linden Lab's laundry list of legalese. Or else. This pulls the matter right out of the arena of trademark law, and back into contractual law, with enforcement by the governance team.
Now that's fascinating.
We've contacted Linden Lab about this, among other matters relating to the new policies and are still waiting on responses.
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Reader Comments (Page 1 of 1)
3-31-2008 @ 3:13AM
Jacek Antonelli said...
Brilliant. The intro, and the analysis. I'm quite interested to see what Linden Lab's response will be, if anything.
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3-31-2008 @ 5:45AM
Loki said...
is Second Life Grid now the Linden State?
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3-31-2008 @ 7:04AM
Cyn said...
Love the intro, and looking forward to your followup when you hear back from LL.
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3-31-2008 @ 7:31AM
sirhc DeSantis said...
Great way to wake up on a Monday morning:) Good stuff and keep it coming. Glad someones on our side
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3-31-2008 @ 8:41AM
anonymouse said...
but are click through eula's actually legal contracts in the United States of America? hmm.. ever tested in a court of law? didn't they hold the accounts hostage before the change anyway? isn't this the American way now? To ignore the law and imply that whatever they 'say' in a eula is the law?
as much as possible i, for one, will no longer be sending money to linden lab. fortunately my business model allows me to reduce expenditures to them a great deal :)
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3-31-2008 @ 8:56AM
Tateru Nino said...
Yes, click-through EULA's have been tested in US courts this century. Some have been upheld (in whole or in part) and some have been overturned (in whole or in part).
3-31-2008 @ 9:43AM
Kit Meredith said...
Tateru, this tension between nominative use and the ToS is something I've been trying to express for several days on my blog (http://kitmeredith.blogspot.com), but you nailed it with a clarity that's been eluding me. Thank you!
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3-31-2008 @ 6:48PM
KirbyMeister said...
So, essentially LL uses the ToS as a contract of adhesion to enforce their trademark rights. This won't last 10 seconds in court.
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3-31-2008 @ 8:08PM
TigroSpottystripes Katsu said...
if someone is using a custom client that don't display the changes in the TOS, would that mean the person can do whatever they want and be protected by the law since they never clicked on "I Agree" ?
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4-01-2008 @ 5:49AM
Lislo Mensing said...
@9 I bet, you already clicked on "I Agree".
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4-02-2008 @ 3:45AM
Jaszon Maynard said...
Everyone knows that SL means "Simulated Lands" so I really don't see where there's going to be any problem here.
For instance, SLExchange is for buying/selling stuff for Simulated Lands...though I do notice that their listings do seem to be rather heavy in items intended for use in the Linden Lab® Second Life®™© virtual world, but I'm sure that's just a coincidence and shouldn't be a problem at all.
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4-02-2008 @ 4:16AM
Tateru Nino said...
What you actually _intend_ SL to stand for, Linden Lab asserts that they own any such usage of the two letters in the arena of virtual worlds, and that they may only be used in the context of virtual worlds per their guidelines.
Doesn't matter what you or we actually _intend_ them to mean.
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4-02-2008 @ 5:19AM
jasonkulas said...
Hmmm...but they can only assert that ownership for people that have agreed to the T.O.S.? So, if your site uses SL in a way they don't like, make sure you don't put your avi's name on there, and you can "claim" that you are someone who's never clicked Agree on their T.O.S. Then I guess they'll try to prove who owns the site and that they did actually click the Agree...but do they keep records that confirm every login & click?
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4-02-2008 @ 5:41AM
Tateru Nino said...
Actually, no. The use of a mark in the USA for commercial purposes for a given type of goods or services makes it an unregistered trademark and automatically grants it a measure of protection -- though not quite as much as a registered trademark would have, as we understand it.
Whether you are subject to the ToS doesn't affect that the United States Code title 15, Chapter 22 effectively grants Linden Lab the sole right to use the SL mark in relation to virtual world goods and services.
You can use SL to refer to RL shoes, or handbags, or cars, plant products or stuffed toys. But not to virtual worlds or things related to virtual worlds without first getting a court to rule on how broadly the trademark SL should apply or getting Linden Lab's permission.
As a matter of interest, unregistered trademarks have no legal standing or protection in the Czech Republic, France, Italy or Portugal (and perhaps in other locations).
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4-02-2008 @ 6:28AM
jasonkulas said...
Are the trademarks going to hold up? People have apparently been using them for years with Linden's blessing and little restriction and no demand to put ™. And there's a claim that SL wasn't even a term created by Linden. Do you know how many of their guidelines are enforceable under trademark law, and how many are enforceable only under TOS agreement? Does a trademark on SL mean sites like SLExchange are in trouble under trademark law, or just TOS rules?
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4-02-2008 @ 6:38AM
Tateru Nino said...
We believe both TOS rules and trademark law to varying degrees.
Legally, though, there's estoppel. LL is reversing previous presentations with respect to some of its marks, and in so doing, causing costs that would otherwise not have occurred. That could well constitute estoppel.
But someone will have to lawyer up and convince a judge before anyone's protected under estoppel.
Are they going to hold up? Well - who is going to lawyer up and find out? That is the only real test here.
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4-02-2008 @ 9:34PM
Wiz Nordberg said...
Tradmark registration is a formalty. The thing which really mattesrs is "first use in commerce).
I am very curious what the first use of the SL trademark was. In order to claim first use, SL must appear in commerce as a distinctive mark for your prouducts (I believe that's it). Weren't residents the first ones to use the term SL? What product has Linden Lab ever had called "SL?" Do you remember anybody saying oin any official capacity "Yes, make sure you try Linedn Lab's new SL. It's great."
Isn't Linden Lab co-opting a pre-existing resident-invented abbriveviation and now trying to make it their own under an adhesion contract?
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4-02-2008 @ 9:56PM
Wiz Nordberg said...
You'll enjoy this. Here are some Linden Labs registrations, with filing dates:
Reg#2832935 (7-Oct-2002) "Second Life"
Reg#Pending (5-Jun-2007) "SL"
Reg#Pending (7-Jun-2007) "Second"
Reg#Pending (22-Jun-2007) "Grid"
Many others (such as class update registrations), but those are the ones of significance to the discussion here.
Looks like June of last year was an interesting month at the law firm!
While it is interesting to note that not only are they claiming protection for "SL", but also the word "Second" and word "Grid" as applied to virtual words.
All of the pending terms are in filing class 1B, which means that Linden Labs has pre-filed them before any use in commerce. So, by their own filing, they admit that the terms "SL", "Grid" and "Second" have not actually be used, by them, in commerce, before their filing dates
Please note that all of the pending terms have yet to be published for opposition by USPTO, meaning that all other stakeholders can submit formal opposition when the time comes. If you believe you are using the term SL, Grid, or Second in commerce, and have been prior to their filing date, submitting a formal opposition is a good idea.
I am not an IP lawyer though. I would love to hear from somebody who is.
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4-04-2008 @ 7:06AM
Briana Dawson said...
The first filing for "Second Life" is legitimate.
The other 3 are sheer greed and arrogance.
Second???? Trademark SECOND?!!?! Ugh.
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