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Henry Darkthief

Serious Changes to ToS & the Fallout

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I routinely use CG Textures as a source. They have now banned the use of any of their textures in SL. The reason? Changes to SL's Terms of Service. http://www.cgtextures.com/content.php?action=secondlife_licensechange


Here's the particular section of the SL's ToS:

"

2.3 You grant Linden Lab certain licenses to your User Content.

You retain any and all Intellectual Property Rights you already hold under applicable law in Content you upload, publish, and submit to or through the Servers, Websites, and other areas of the Service, subject to the rights, licenses, and other terms of this Agreement, including any underlying rights of other users or Linden Lab in Content that you may use or modify.

In connection with Content you upload, publish, or submit to any part of the Service, you affirm, represent, and warrant that you own or have all necessary Intellectual Property Rights, licenses, consents, and permissions to use and authorize Linden Lab and users of Second Life to use the Content in the manner contemplated by the Service and these Terms of Service.

Because the law may or may not recognize certain Intellectual Property Rights in any particular Content, you should consult a lawyer if you want legal advice regarding your legal rights in a specific situation. You acknowledge and agree that you are responsible for knowing, protecting, and enforcing any Intellectual Property Rights you hold, and that Linden Lab cannot do so on your behalf.

Except as prohibited by law, you hereby waive, and you agree to waive, any moral rights (including attribution and integrity) that you may have in any User Content, even if it is altered or changed in a manner not agreeable to you. To the extent not waivable, you irrevocably agree not to exercise such rights (if any) in a manner that interferes with any exercise of the granted rights. You understand that you will not receive any fees, sums, consideration or remuneration for any of the rights granted in this Section.

Except as otherwise described in any Additional Terms (such as a contest’s official rules) which will govern the submission of your User Content, you hereby grant to Linden Lab, and you agree to grant to Linden Lab, the non-exclusive, unrestricted, unconditional, unlimited, worldwide, irrevocable, perpetual, and cost-free right and license to use, copy, record, distribute, reproduce, disclose, sell, re-sell, sublicense (through multiple levels), modify, display, publicly perform, transmit, publish, broadcast, translate, make derivative works of, and otherwise exploit in any manner whatsoever, all or any portion of your User Content (and derivative works thereof), for any purpose whatsoever in all formats, on or through any media, software, formula, or medium now known or hereafter developed, and with any technology or devices now known or hereafter developed, and to advertise, market, and promote the same. You agree that the license includes the right to copy, analyze and use any of your Content as Linden Lab may deem necessary or desirable for purposes of debugging, testing, or providing support or development services in connection with the Service and future improvements to the Service. The license granted in this Section 2.3 is referred to as the "Service Content License."

Linden Lab has no obligation to monitor or enforce your intellectual property rights to your User Content, but you grant us the right to protect and enforce our rights to your User Content, including by bringing and controlling actions in your name and on your behalf (at Linden Lab’s cost and expense, to which you hereby consent and irrevocably appoint Linden Lab as your attorney-in-fact, with the power of substitution and delegation, which appointment is coupled with an interest)."

The portions in bold I have hihglighted for emphasis. In short, these terms give LL FULL copyrights to your work without any obligation to compensate you and without any restrictions you might want. They don't even have to acknowledge that you created it.

 

That unique mesh object you just spent 3 months working on for your personal use in SL? LL can use it any way they want, including selling it, as they please. That pack of textures you created over the past year for exclusive sale in SL? Yep, LL can use it any way they want.

 

And there is nothing that you can do about it.

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I routinely use CG Textures as a source. They have now banned the use of any of their textures in SL. The reason? Changes to SL's Terms of Service. http://www.cgtextures.com/content.php?action=secondlife_licensechange


Here's the particular section of the SL's ToS:

"

2.3 You grant Linden Lab certain licenses to your User Content.

You retain any and all Intellectual Property Rights you already hold under applicable law in Content you upload, publish, and submit to or through the Servers, Websites, and other areas of the Service, subject to the rights, licenses, and other terms of this Agreement, including any underlying rights of other users or Linden Lab in Content that you may use or modify.

In connection with Content you upload, publish, or submit to any part of the Service, you affirm, represent, and warrant that you own or have all necessary Intellectual Property Rights, licenses, consents, and permissions to use and authorize Linden Lab and users of Second Life to use the Content in the manner contemplated by the Service and these Terms of Service.

Because the law may or may not recognize certain Intellectual Property Rights in any particular Content, you should consult a lawyer if you want legal advice regarding your legal rights in a specific situation. You acknowledge and agree that you are responsible for knowing, protecting, and enforcing any Intellectual Property Rights you hold, and that Linden Lab cannot do so on your behalf.

Except as prohibited by law, you hereby waive, and you agree to waive, any moral rights (including attribution and integrity) that you may have in any User Content, even if it is altered or changed in a manner not agreeable to you. To the extent not waivable, you irrevocably agree not to exercise such rights (if any) in a manner that interferes with any exercise of the granted rights. You understand that you will not receive any fees, sums, consideration or remuneration for any of the rights granted in this Section.

Except as otherwise described in any Additional Terms (such as a contest’s official rules) which will govern the submission of your User Content, you hereby grant to Linden Lab, and you agree to grant to Linden Lab, the non-exclusive, unrestricted, unconditional, unlimited, worldwide, irrevocable, perpetual, and cost-free right and license to use, copy, record, distribute, reproduce, disclose, sell, re-sell, sublicense (through multiple levels), modify, display, publicly perform, transmit, publish, broadcast, translate, make derivative works of, and otherwise exploit in any manner whatsoever, all or any portion of your User Content (and derivative works thereof), for any purpose whatsoever in all formats, on or through any media, software, formula, or medium now known or hereafter developed, and with any technology or devices now known or hereafter developed, and to advertise, market, and promote the same. You agree that the license includes the right to copy, analyze and use any of your Content as Linden Lab may deem necessary or desirable for purposes of debugging, testing, or providing support or development services in connection with the Service and future improvements to the Service. The license granted in this Section 2.3 is referred to as the "Service Content License."

Linden Lab has no obligation to monitor or enforce your intellectual property rights to your User Content, but you grant us the right to protect and enforce our rights to your User Content, including by bringing and controlling actions in your name and on your behalf (at Linden Lab’s cost and expense, to which you hereby consent and irrevocably appoint Linden Lab as your attorney-in-fact, with the power of substitution and delegation, which appointment is coupled with an interest)."

The portions in bold I have hihglighted for emphasis. In short, these terms give LL FULL copyrights to your work without any obligation to compensate you and without any restrictions you might want. They don't even have to acknowledge that you created it.

 

That unique mesh object you just spent 3 months working on for your personal use in SL? LL can use it any way they want, including selling it, as they please. That pack of textures you created over the past year for exclusive sale in SL? Yep, LL can use it any way they want.

 

And there is nothing that you can do about it.

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If you take the time to copyright anything you create and import to SL, nothing in the TOS can override your copyright.  SL will be subject to DMCA/copy right violations just like anyone else would.   No ones ToS can negate your copy right.  

Copyright protects the expression of ideas, specifically literary, musical, visual, architectural, cinematographic and dramatic works. Copyright gives the holder the exclusive right to use, reproduce or copy, distribute, promote, perform, sell, make derivative works of and translate the work for the duration of the author's life plus 50 to 70 years, depending on the type of work.

Copyright infringement or violation occurs when a person in any way uses another person's creative work without the permission of the copyright holder. Once a violation has been documented, the copyright holder can press charges. The copyright holder can press charges regardless of whether the infringement involved financial gain for the violator or was intentional.

Generally, copyright holders sue for damages, which can be lost licensing fees or lost profits. When the copyright violator is found guilty, the court orders him to pay the copyright holder's legal fees in addition to damages. According to Chapter Five, Article 504 of the U.S. Copyright Act, each infringement carries a minimum $750 and maximum $30,000 penalty per violation, while willful infringement carries a maximum penalty of $150,000.

Willful violation can also carry crimianal penalties.  These would be If a violator is found guilty,  a fine of up to $500,000 or imprisonment of up to five years for a first offense. For subsequent offenses, there is a fine of up to $1 million or imprisonment of up to 10 years.

I would say that since SL has stated their intent to violate copy right in advance and willfully, some one could end up in a Federal Correctional Facility.


And before anyone asks, yes I am an attorney and a US Federal Agent.

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"nothing in the TOS can override your copyright"

But they are not claiming to override your copyright. In fact they explicitly recognise it. They are claiming a license from the copyright holder, and a license that is extraordinarily wide ranging. It even includes means of communication that have not yet been thought of! The question is not whether you retain copyright, it's whether the license claimed in the ToS would be upheld by a court (assuming you had the right to grant it - in the case of third party textures, of course, you generally do not).

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You're ignoring five little words that are in those clauses - CG Textures actually redacted them:

"EXCEPT AS PROHIBITED BY LAW"

As to the rest - think about it. If you make an object and put it on the ground, Linden Lab has to "distribute" it to everyone who is within draw distance of it. As far as "selling"? If someone buys an object that you make in world or on the Marketplace they aren't really buying it from you, they're buying it from Linden Lab, who will then give you tokens that they very much don't want considered as currency.

 

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I agree it is overly broad, but LL has to put this in for protection. By granting them the license to use your content they cannot be sued for copybotting, or other misuse. It can be used as a defense in pretty much any litigation relating to in world use of licensed material. This also keeps them from having to pull inventory because someone gets all pissy and decides they don't want their content used in world anymore. So while they might have trimmed a bit here and there, I don't see how they could remove this.

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"You're ignoring five little words that are in those clauses - CG Textures actually redacted them:"

You are wrong on both counts. First, those five words only appear in the preceding paragraph, and thus applies to moral rights, not licences for use. Secondly, as they are not there in the section they have quoted, they cannot have been redacted. The omitted part of the quoted paragraph is completely different, as it adresses the effect of additional terms, nothing to do with the law.

Edited - changed 'elided' to 'omitted' after looking it up!

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Theresa Tennyson wrote:

You're ignoring five little words that are in those clauses - CG Textures actually redacted them:

"EXCEPT AS PROHIBITED BY LAW"

Just to clarify, you're suggesting that these words are substitutes for the previous writing in the ToS?

"solely for the purposes of providing and promoting the service" (Referenced here)

---

I would say these two statements are different, with the new one being broad to the point of recklessness.

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There are companies being set up that buy rights to things purely to sue for damages, usually people pay up rather than go to court, basically its legal mugging. All LL are doing is closing a door so they do not get those leaches on there backs.

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Elle Benusconi wrote:

 

 

And before anyone asks, yes I am an attorney and a US Federal Agent.

I hate to say this but if you are an Attorney, based on your post I wouldn't want you representing me.

I'm a layman and I have a better understanding of this then what your post displays.

You stated:


Elle Benusconi wrote:

 

I would say that since SL has stated their intent to violate copy right in advance and willfully, some one could end up in a Federal Correctional Facility.

 

 

 

If anything, LL has said just the opposite, they they don't want to violate anyone's copyright because:

 

 

"In connection with Content you upload, publish, or submit to any part of the Service, you affirm, represent, and warrant that you own or have all necessary Intellectual Property Rights, licenses, consents, and permissions to use and authorize Linden Lab and users of Second Life to use the Content in the manner contemplated by the Service and these Terms of Service."  2.3 paragraph 2.

Here they have flat out said that if you don't have full rights to the content you are uploading, including the right to allow LL and it's users to access and use that content, they don't want it in SL.  And it is reiterated further on in the TOS:

"You agree that you will not publish, or submit to any part of the Service, any Content that is protected by Intellectual Property Rights or otherwise subject to proprietary rights, including trade secret or privacy rights, unless you are the owner of such rights or have permission from the rightful owner to upload, publish, or submit the Content and to grant Linden Lab and users of the Service all of the license rights granted in these Terms of Service."  2.7 paragraph 1

 

So they have stated explicitly what rights you must have before you upload anything into SL.

Than we get to 2.3 paragraph 5

"Except as otherwise described in any Additional Terms (such as a contest’s official rules) which will govern the submission of your User Content, you hereby grant to Linden Lab, and you agree to grant to Linden Lab, the non-exclusive, unrestricted, unconditional, unlimited, worldwide, irrevocable, perpetual, and cost-free right and license to use, copy, record, distribute, reproduce, disclose, sell, re-sell, sublicense (through multiple levels), modify, display, publicly perform, transmit, publish, broadcast, translate, make derivative works of, and otherwise exploit in any manner whatsoever, all or any portion of your User Content"

My bolding.  What content would that be?  The content that you had a lawful right to upload and transfer license to.  So where is the willful intent to violate copyright?

Additionally they may and can have internal policies that they don't have to publish where they have procedures to attempt to discover if content has been lawfully uploaded per the TOS before they use it in the manner described in the TOS.

No doubt LL has made some dumb decisions in the past and Courts have found against them.  But I also doubt that they would make changes to the TOS, and especially to this section, without it being vetted by an Attorney. 

When I see a copy of a letter from the Attorney General's office stating that they think this is in violation of the DCMA or a Court ruling to that effect I'll change my opinion.  I can be proven wrong and am able to admit when I am. 

Really, my skepticism began when you identified your self as a Federal Agent.  A Federal Agent identifying them self as such here?  Seriously?

On a final note, personally I think LL is asking too much.  But that is a personal matter, not a legal one.

 

 

 

 

 

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I'm no legal expert, but there is already a tremendous amount of content inside SL that was licensed from entities like CGTextures under usage terms that LL have now changed. Are creators who used CGTextures products in their creations now obligated to recall those creations? That's not possible of course and LL knows that. So I think I could find a way to agree with Elle Benusconi's statement that LL does indeed intend to do things that will violate license agreements already in place for SL content.

Intentionally doing something that violates a license is not the same as intentionally violating a license, so I can still give LL the benefit of my considerable doubt in their competence.

 

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Madelaine McMasters wrote:

I'm no legal expert, but there is already a tremendous amount of content inside SL that was licensed from entities like CGTextures under usage terms that LL have now changed. Are creators who used CGTextures products in their creations now obligated to recall those creations? That's not possible of course and LL knows that. So I think I could find a way to agree with Elle Benusconi's statement that LL does indeed intend to do things that will violate license agreements already in place for SL content.

Intentionally doing something that violates a license is not the same as intentionally violating a license, so I can still give LL the benefit of my considerable doubt in their competence.

 

All content has a creation or upload date.  Very easy for LL to distinguish which was before or after this change to the TOS. 

 

ETA....I hate when I find myself arguing on LL's side.

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Perrie Juran wrote:


Madelaine McMasters wrote:

I'm no legal expert, but there is already a tremendous amount of content inside SL that was licensed from entities like CGTextures under usage terms that LL have now changed. Are creators who used CGTextures products in their creations now obligated to recall those creations? That's not possible of course and LL knows that. So I think I could find a way to agree with Elle Benusconi's statement that LL does indeed intend to do things that will violate license agreements already in place for SL content.

Intentionally doing something that violates a license is not the same as intentionally violating a license, so I can still give LL the benefit of my considerable doubt in their competence.

 

All content has a creation or upload date.  Very easy for LL to distinguish which was before or after this change to the TOS. 

It's also very easy to prevent spam in the forums!


ETA....I hate when I find myself arguing on LL's side.

You weren't arguing for LL's side. You were arguing for the ease of doing something. I agree. I also don't think LL is competent enough to figure that out.

 

;-)

ETA: If they were to do as you say, refraining from using anything containing bits created before the change to the TOS, they'd have nothing to use. I don't know how the law works, but maybe they could still use old content in the way specified in the old TOS, for promoting SL.

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Madelaine McMasters wrote:


Perrie Juran wrote:


Madelaine McMasters wrote:

I'm no legal expert, but there is already a tremendous amount of content inside SL that was licensed from entities like CGTextures under usage terms that LL have now changed. Are creators who used CGTextures products in their creations now obligated to recall those creations? That's not possible of course and LL knows that. So I think I could find a way to agree with Elle Benusconi's statement that LL does indeed intend to do things that will violate license agreements already in place for SL content.

Intentionally doing something that violates a license is not the same as intentionally violating a license, so I can still give LL the benefit of my considerable doubt in their competence.

 

All content has a creation or upload date.  Very easy for LL to distinguish which was before or after this change to the TOS. 

It's also very easy to prevent spam in the forums!

ETA....I hate when I find myself arguing on LL's side.

You weren't arguing for LL's side. You were arguing for the ease of doing something. I agree. I also don't think LL is competent enough to figure that out.

 

;-)

I'll agree with you on the competence issue.

Very strongly.

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I'm no lawyer.  However, I do remember a case in which LL closed a lawyer's account arbitrarily, and he sued and won, causing LL to revise the TOS. The legal basis for his victory was that the TOS is a "contract of adoption," i.e., its terms are determined by one party, and it is not the product of negotiation.  Such contracts, when offered by a party in a stronger bargaining position on a take-it-as-is-or-leave -it basis to a weaker entity are held to higher legal standards of fairness than contracts in general.  The court held that the TOS was invalid to the extent that it didn't meet the required standard of fairness.

It seems to me that a person who had a substantial investment of time and/or money in a SL business that was making significant money and that will be disadvantaged by these new terms would prevail in a lawsuit against LL.  I think that LL is imposing a license that is much broader than they have any legitimate business need for wouldhelp.

LL could protect all of its legal interests with much narrower license terms.  A license that limited their use to within the SL virtual world only by the account that uploaded or created the content and its inworld licensees and in reproductions of the screen by LL with a clause holding them harmless if their security was circumvented would suffice.

 

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Jennifer Boyle wrote:

I'm no lawyer.  However, I do remember a case in which LL closed a lawyer's account arbitrarily, and he sued and won, causing LL to revise the TOS. The legal basis for his victory was that the TOS is a "contract of adoption," i.e., its terms are determined by one party, and it is not the product of negotiation.  Such contracts, when offered by a party in a stronger bargaining position on a take-it-as-is-or-leave -it basis to a weaker entity are held to higher legal standards of fairness than contracts in general.  The court held that the TOS was invalid to the extent that it didn't meet the required standard of fairness.

It seems to me that a person who had a substantial investment of time and/or money in a SL business that was making significant money and that will be disadvantaged by these new terms would prevail in a lawsuit against LL.  I think that LL is imposing a license that is much broader than they have any legitimate business need for wouldhelp.

LL could protect all of its legal interests with much narrower license terms.  A license that limited their use to within the SL virtual world only by the account that uploaded or created the content and its inworld licensees 
and
 
in
 
reproductions
 
of
 
the
 
screen
 by LL 
with a clause holding them harmless if their security was circumvented would suffice.

 

The closing of that account was not arbitrary.

The Lawyer had discovered a way to view Land Auctions before they were posted 'publicly' by LL.

As I recall, said lawyer was then purchasing before the auction went "public."

While I personally would consider what the lawyer did not ethical LL settled with the Lawyer.

I think LL had very good reason for closing that account.

 

eta: clarity

http://en.wikipedia.org/wiki/Bragg_v._Linden_Lab

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I'm no lawyer but I see the TOS as LL's way of covering their a-- by putting their customers at a great disadvantage. It seems to be par for the course for social sites though. I don't see LL ever attempting to infringe in any unseemly manner as the user backlash could potentially put them out of business.

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Bree Giffen wrote:

I'm no lawyer but I see the TOS as LL's way of covering their a-- by putting their customers at a great disadvantage. It seems to be par for the course for social sites though. I don't see LL ever attempting to infringe in any unseemly manner as the user backlash could potentially put them out of business.

Which now reminds me of Facebook's TOS regarding their rights to use Images and your personal information you upload to Facebook. 

http://bits.blogs.nytimes.com/2013/09/04/privacy-groups-ask-f-t-c-to-block-facebook-policy-changes/?_r=0

 

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"Facebook users who reasonably believed that their images and content would not be used for commercial purposes without their consent will now find their pictures showing up on the pages of their friends endorsing the products of Facebook's advertisers," the letter says. "Remarkably, their images could even be used by Facebook to endorse products that the user does not like or even use."

Interesting stuff in the NY Times blog. Thanks for bringing it to my attention, Perrie Juran.

The new ToS applies retroactively to all images uploaded to Second Life? Or only to images uploaded after September 6?

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Bacon Hellershanks wrote:

"Facebook users who reasonably believed that their images and content would not be used for commercial purposes without their consent will now find their pictures showing up on the pages of their friends endorsing the products of Facebook's advertisers," the letter says. "Remarkably, their images could even be used by Facebook to endorse products that the user does not like or even use."

Interesting stuff in the NY Times blog. Thanks for bringing it to my attention, Perrie Juran.

The new ToS applies retroactively to all images uploaded to Second Life? Or only to images uploaded after September 6?

My take on it would be it would apply to images uploaded 30 days after a substantial change would go into effect that the old TOS promised.

But I am not a Lawyer.  That is only a Layman's opinion.

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Bree: "I don't see LL ever attempting to infringe in any unseemly manner as the user backlash could potentially put them out of business."

 Ordinarily Bree I would agree with you.  However in this particular case... this is Linden Lab.  They've done insane things before that cost both them and their customers millions of dollars.

This is an interesting post that is good for keeping one up at night:

Ulterior Motives? http://inworldz.com/forums/viewtopic.php?p=140046#p140046

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Perrie Juran wrote:

 


I think ALL had very good reason for closing that account.

 

OK.  I didn't look it up until now.  The following is from the linked content:

"Bragg sought to prevent Linden Lab from enforcing its mandatory arbitration provision. He argued that the provision was 'both procedurally and substantively unconscionable and is itself evidence of defendants' scheme to deprive Plaintiff (and others) of both their money and their day in court.'[11]

Judge Robreno agreed and held that the Terms of Service was a contract of adhesion, noting that the Terms of Service was presented by Linden Lab on a "take-it-or-leave-it-basis."[11] However, he limited this holding by noting that a claim that a contract is one of adhesion can be defeated if there are "'reasonably available market alternatives'" available to the weaker party.[11][14] Although there were numerous other online virtual worlds available to Bragg at the time, Judge Robreno noted that Second Life was unique in that it allowed participants to retain property rights in virtual land.[11]"

"On October 4, 2007, Linden Lab announced that it reached a confidential settlement with Bragg:

'The parties agree that there were unfortunate disagreements and miscommunications regarding the conduct and behavior by both sides and are pleased to report that Mr. Bragg's "Marc Woebegone" account, privileges and responsibilities to the Second Life community have been restored.[13]"

He sued to get his account restored, and he got it restored.  Looks like a win to me.

The same argument that prevented LL from enforcing the arbitration provision of the TOS would seem to apply equally well to the changes regarding IP rights, particularly in the case of content that was already inworld before the changes.  Basically, to keep valuable accounts they already have, people have to sign away their rights.  That should qualify as unconscionable easily.

One thing I firmly believe is that nobody puts terms in a contract for no reason.  If a contract give somebody rights, they wanted those rights because they think they may want to exercise them.

Don't these changes make it completely impossible to use trademarks in SL?

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Jennifer Boyle wrote:


Perrie Juran wrote:

 


I think LL had very good reason for closing that account.

 

He sued to get his account restored, and he got it restored.  Looks like a win to me.


The Court did not order that Bragg have his account restored. 

What LL was trying to do was deny us the right to our day in Court.  The Court said they couldn't do that.

LL did have a reason for 'banning' Bragg.   That action was not random. 

One huge downside of our legal system a lot of lawsuits don't get settled on the MERITS of the case but on how much they will cost to defend.  LL may have decided to take this route in this case and decided it would cost less to reinstate Bragg then to fight him in Court.  But that is something we will never know.  The settlement was confidential so we will never know if a Court would have found the 'banning' valid.

This is how Patent Trolls work.  It's cheaper to settle out of Court than to fight them. 

http://upstart.bizjournals.com/news/wire/2013/06/05/high-profile-patent-troll-lawsuits.html?page=all

Note one of the examples:

"Drew Curtis of Fark.com shared how he refused to back down after he was hit with a patent infringement suit by Gooseberry Natural Resources. The firm had sued Fark.com, Yahoo and a host of other online media companies over infringement of its patent that covered the creation and distribution of news releases via email. The other companies refused to fight the case, settling out of court, but Curtis didn’t want to spend any money to make it go away (The average defense of a patent costs $2 million and takes 18 months when you win, he said.)"

A lot of people in the Tech World are hoping that Obama and Congress really begin to take this problem seriously.

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