Businesses in Second Life are in an uproar over a rogue software program that duplicates "in world" items. They should be. But the havoc sewn by Copybot promises to transform the virtual word into a bold experiment in protecting creative work without the blunt instrument of copyright law.
Second Life, operated by Linden Labs, has developed differently from other virtual worlds because it allows custom content and encourages in-world enterprise. It's a hospitable place for creators to sell virtual goods like clothing, furniture and hairstyles.
As in any economy, the value of those goods depends on their scarcity: people will pay more for a fantastic hairdo that no one else has. If Copybot can indiscriminately duplicate these items, no one has to pay the creator for them. Copying is a value killer.
As a result, Second Life merchants are understandably up in arms over the software, reportedly closing their stores until the problem is resolved.
So you would think that Linden Labs would be pulling out the big guns, including digital rights management technology, or DRM, and intellectual property lawyers, to fight the Copybot problem. After all, there's a lot of liability to go around.
People using Copybot may be infringing the rights of the creators of those works. Under some circumstances, wielding the program might make you liable for contributory copyright infringement, if you're inciting infringement. (Libsecondlife, the group that released Copybot, claims its original version sought permission before it copied, but that another party modified the open source program to delete that prerequisite.)
But Linden Labs has confronted this threat to its bottom line in a different and novel way. DRM won't work, says CEO Phillip "Linden" Rosedale. Nothing can stop someone from copying textures or shapes off their own computer, any more than technology can stop someone from copying audio streaming through their speakers. Also, the company doesn't want to be in the business of adjudicating copyright disputes.
As Rosedale succinctly put it, given the ambiguity in copyright enforcement, Linden will inevitably make mistakes, and it doesn't want to make mistakes.
Instead, Linden Labs will take another approach. In the short run, it believes that use of Copybot violates its terms of service agreement, allowing the company to ban an offender's account. Long term, Linden says it will create better information identifying creators and dates of creation for in-world content. This will allow copyright owners who've been aggrieved to bring infringement claims against offenders personally, at least in theory.
In practice, the available legal tools may not help the virtual world creators very much. The Digital Millennium Copyright Act may give shopkeepers the power to force Linden Labs to delete copied items, but it will not provide financial compensation to the victims of infringement unless they file a federal lawsuit. Given the cost of these virtual goods, there aren't going to be many infringements worth the expense of suing.
The next phase of Linden's response is more interesting. The company plans to develop an infrastructure to enable Second Life residents and landowners to enforce IP-related covenants within certain areas, or as a prerequisite for joining certain groups. In effect, Second Life's inhabitants will self-police their world, according to rules and social norms they develop themselves.
This is exciting, because it turns Second Life into a laboratory for trying out alternatives to prevailing real world copyright rules.
In real life, copyright protection is an effort to balance incentives for innovation with rights of public access to culture and information. The intuition behind copyright is that when creators know that they will reap the financial rewards of their creation, they will produce and innovate. Without copyright, you have stagnation.
We're already seeing this in Second Life, if merchants are really closing their doors in response to the Copybot.
But U.S. copyright law is generally not tailored to the special needs of a particular industry. The Second Life community might be able to strike a different, yet functional, balance between encouraging creators and allowing public access.
For example, the virtual world's creators will not necessarily benefit from strong IP protection. Much of the creativity in Second Life is derivative. People want to be able to riff on hairstyles, clothing, furniture and vehicles without having to worry about derivative works infringement claims.
The community will probably not opt for too little protection, either. Unlike the community of music fans, where consumers far outnumber creators, in Second Life a higher ratio of people are creators as well as users. These creators have an incentive to protect rights that encourage innovation, because they themselves will be adversely affected if creativity is under-protected.
The idea that innovation can flourish in the absence of copyright enforcement is not as heretical as it might seem.
Take the fashion industry. As law professors Chris Sprigman and Kal Raustiala write in their paper on the subject, neither copyright nor patent law prohibit copying fashion designs. There is some protection for the brand associated with the apparel, but no law prohibits a knock-off Chanel suit, peasant skirt or narrow lapel. And yet fashion is highly innovative, with new styles several times a year, despite low IP protection.
Similarly, professors Emmanuelle Fauchart and Eric von Hippel write that haute French cuisine (.pdf) is another area with low IP protection, yet high levels of innovation and creativity. No law prevents copying recipes. Instead, French chefs have developed social norms, much like those Linden Labs seeks to empower, against exact copying, dissemination of tricks of the trade and adopting significant innovations without crediting the chef responsible.
Failure to follow these norms results in reputation harm, including ostracism.
Such a norms-based (rather than law-based) system might work in Second Life. Norms-based systems are context-sensitive and highly responsive to the concerns of the relevant community. They are also cheaper and quicker than litigation. But norms-based systems can only work if the people in the community value the rewards the community can bestow or withhold.
What's happening now in Second Life is a grand experiment, and one that has implications not just for virtual worlds, but for IP protection more generally. Are digital goods in virtual worlds more like music or fashion, more like movies or food? Will the Second Life community find a happy medium that allows inspired creativity without hindering their growing economy? Could social opprobrium based on shared values replace rigid and cumbersome IP regimes?
The answers will depend in part on the evolving ratio of creators to users, whether different communities share the same values related to copying, the cost of copying, how much branding and authenticity matter to buyers, and whether creators can enjoy an economic benefit from being the first to make something.
The stakes are high. Not only are the financial futures of Second Life merchants up for grabs, but so is Linden Labs' business model. If the company's way of dealing with copyright falls flat, creators will stop creating, and the growth of the online world will be stunted. Needless to say, the movie and music industries will refuse to license their works for in-world sales and distribution.
Watching Second Lifers, and Linden Labs, chart a new copyright course will be fascinating, and may provide lessons about the future of copyright in real-world communities.
