What happens when aÂ virtual world designer suesÂ for unauthorized use of a virtual island? The case involved the question of whether terraforming is protected by copyright law, and whether a terrain purchased for use in Second Life can be exported to OpenSim.
- Yes, terraforming is protected by copyright law
- Just because the customer is an educational institution, it doesn’t mean they can automatically claim “fair use” on terrains
- Customers and vendors need to be clear up front about what content is being sold, and how long and where it can be used
In late September, a New York district court denied summary judgment and cleared the way for a full trial on a virtual world copyright infringement case, and the parties involvedÂ settled the caseÂ in mid-December.
This case stemmed from a payment dispute for digital design services related to Â Second Life. For those unaware with Second Life, the court described it as an â€œinternet-based simulation in which users appear via digital characters called â€˜avatarsâ€™ and interact with a computer-generated environment.â€
The operators of Second Life (Linden Research, Inc.) sell parcels of virtual space called islands that essentially begin as blank slates that look like flat green rectangles. Second Life users can then change these virtual landscapes and populate their island with objects, buildings, and other things they create or purchaseâ€“a process called terraforming.
As a teacher, defendant Cindy Sheehy saw Second Life as an educational opportunity and worked with her schoolâ€™s technical staff to purchase three islands in Second Life that would later be terraformed into a virtual classroom for her students. She met plaintiff Fred Fuchs at a Second Life convention in San Francisco, and ultimately hired hisÂ FireSabreÂ consulting company to create digital content and terraform her virtual islands.
FireSabre terraformed a total of six islands for the defendants, referred to as â€œRamapo Islandsâ€:
(1)Â â€œThe First Three Islandsâ€ created in 2005-06, and
(2)Â â€œThe Second Three Islandsâ€ created in 2007-08.
Unfortunately, the parties didnâ€™t nail down the specific details of this relationship. Sheehy claims that Fuchs was a volunteer for the First Three Islands, whereas Fuchs claims that he was an independent contractor hired to create the content for $10,000. But the two parties never executed a formal written contract, let alone discuss who owned the intellectual property rights to this â€œRamapo Islandsâ€ project.
The school district did eventually pay Fuchs $5,000 for the terraforming of the Second Three Islands, but the parties dispute whether that sum effectively purchased a copy of the content or merely a license of limited duration. Fed up in 2008, Fuchs submitted forty screenshots of the islands to the Copyright Office and registered his companyâ€™s digital artwork copyright. He then contacted the defendants and told them that the continued use of any of FireSabreâ€™s Second Life content after August 1, 2008 would be â€œunlicensed.â€
After that date came and went, FireSabre submitted several DMCA takedown requests to Linden Research. It also alleged that the defendants created a copy of the Second Life terrain and exported it toÂ OpenSim. Ultimately, FireSabre sued for copyright infringement.
‘Terraforming’ is Copyrightable Under Section 102
The defendants first attacked the validity of Firesabreâ€™s terraforming copyright, arguing that terraforming should not qualify for copyright protection because it is not â€œfixed in any tangible medium of expressionâ€ within the meaning of Â§ 102. The court did not buy this argument and compared the terraforming to digital images in video games:
Plaintiffâ€™s designs existed on Lindenâ€™s data servers and were visible within Second Life for some period of time . . . clearly of more than â€œtransitory duration.â€ The work was â€œsufficiently permanent . . . to permit it to be perceivedâ€ by the students who interacted with the Ramapo Islands simulation.
The court also shot down the argument that the terraforming was not â€œsufficiently permanentâ€ because students were able to alter it. Defendants were similarly unsuccessful in arguing that the terraforming was not within the scope of FireSabreâ€™s copyright because it was not prominently featured in the screenshots plaintiff submitted to the Copyright Office.
Dispute Over Authorization Precluded Court From Granting Summary Judgment
In its complaint, FireSabre alleged two instances of infringement: (1) the unauthorized display of the â€œSecond Three Islandsâ€ after August 1, 2008, and (2) the unauthorized copying of the â€œFirst Three Islandsâ€ into the OpenSim environment in early 2011.
Ultimately, the court denied FireSabre summary judgment for both instances.
With respect to the First Three Islands, the court claimed that it had not been presented with enough information to give summary judgment on the question of substantial similarity.
As for the Second Three Islands, the dispute over authorization prevented summary judgment for FireSabre:
While defendants have done a less-than-admirable job of teeing this issue up for the Courtâ€™s attention, they do assert that Sheehy believed the district had purchased the right to the continued use of the content plaintiff had created for the Second Three Islands at her request.
Sheehy and the school district claimed that the $5,000 payment to FireSabre authorized them to continue using and displaying that content. The court gave considerable weight to this question, and noted that such an authorization could have been obtained by an implied license, under the first sale doctrine, or as a volunteered gift. The lack of evidence as to these three possibilities ultimately influenced the court to hold off on granting summary judgment.
Defendants unsuccessful in claiming fair use
In addition to the â€œauthorization via implied licenseâ€ defense, Sheehy and the defendants claimed that their continued use of the virtual islands constituted fair use. But one by one, the court laid out its rationale as to why each fair use factor weighed against a finding of fair use.
1)Â Purpose and Character of the Use: For this factor, the court relied on the distinction as described inHarper & Row:
[t]he crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.
Despite acknowledging that â€œDefendantâ€™s use of the material in question [was] primarily . . . for nonprofit educational purposes,â€ the court found that the allegations more closely resembled misappropriation because the defendants stood to gain from exploitation of the digital content without paying the customary price.
2)Â Nature of the Copyrighted Work: The court quickly weighed this favor against the defendants, noting that FireSabreâ€™s digital artwork â€œis within the creative â€˜core of intended copyright protectionâ€™ for which fair use is more difficult to establish.
3)Â Amount and Substantiality of the Use: The court noted that FireSabre has produced evidence, uncontroverted by the defendants, that the amount of content used by the defendants was a substantial part (if not the entirety of) FireSabreâ€™s copyrighted works.
4)Â Effects of the Use on the Market for or Value of the Work: This factor also weighed against fair use, as the court reasoned that â€œthe market in which Defendantsâ€™ use of the material occurred is the same market that [FireSabre] is targeting in creating its works in the first place.â€ By continuing to use the content, the defendants chose not to avail themselves of the â€œready . . . means to pay for the useâ€ in the Second Life market.
Since none of these factors weighed in Defendantsâ€™ favor, the court denied defendantsâ€™ cross-motion for summary judgment. All in all, the court struck down both partiesâ€™ summary judgment motions and set the stage for this strange case to proceed to trial.
The lesson here: donâ€™t stiff your virtual landscaper!
Actually, the bigger lesson (too often ignored) is to make sure you have an agreement nailed down and in writing before beginning a time-intensive project. Judging byÂ the earliest entries for FireSabreÂ in the Internet Archives (circa 2007), it seems that the business was in its infant stages and thus less likely to have a firm process in place. But absent any documents outlining the relationship, the â€œauthorizationâ€ question loomed heavily over this case and all but prevented summary judgment.
In fact, the major questions here were more factual related and less about the application of copyright law in virtual worlds. The defendantsâ€™ attack on copyrightability did not stick, nor did the fair use defense. Itâ€™s pretty clear that even educational uses of copyrighted material will not be protected when youâ€™re using the entirety of the work and not paying for it.
As always, we must ask ourselves whether proceeding with a full trial is worth it.Â Something tells me that when youâ€™re knee-deep in litigation over a few virtual islands, the answer is no. Then again, I can only speak to this issue from a First Life perspective.
(This article is adapted with permission from the Technology & Marketing Law Blog.)