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Second Life, a virtual reality simulation system available online, is a privately managed computer system that allows “real” people to participate in “virtual” activities within the system.  You can download a copy of the program and login for free at Second Life’s website.  But, if you do, you’ll notice that you have to consent to a rather lengthy (which is kind of normal for these sorts of sites) online agreement that governs the terms of service of the site.  Undoubtedly written by risk-conscious lawyers, the terms of service give users a more or less one-sided set of rules that govern the basic way that the site will operate.  These terms include a number of discretionary matters reserved to the good folks at Linden Labs, that creator of Second Life.

In reality, no one but you owns your right to exist or engage in interactions, so it is a little unsettling that a private company has, in its discretion, control or ownership over your virtual existence.  But, like most of us children of the internet age, we quickly breeze through such concerns.  What’s more interesting about the agreement relates to the copyright possessed by users of Second Life.  As students of copyright law can surmise, Linden Labs is an author under the Act.  The system it has created is a copyrightable work, which includes the audio visual presentation, along with the application code underneath that makes things work within the system.  Individual users have a license to access the system and roam its virtual landscape, but are also empowered, effectively, to create their own little derivative works.  The system gives users the ability to create new objects within Second Life, upload images and pictures, and then buy and sell those virtual objects to other users in the system, in exchange for a virtual currency that is managed by the system creator.

Normally, Linden Labs would have an exclusive right to create derivative works.  However, under the agreement with Linden, users are able to retain an exclusive copyright in the virtual objects that they might create within the system.  This likely includes programming code users can generate themselves within the system to automate or otherwise cause virtual objects to interact with Second Life in particular ways.  Section 3.2 of the current agreement describes this right and the limitations upon it.  So here’s an interesting question: how do you go about enforcing your rights under the Copyright Act in the event of a potential infringement?  Today, you generally have to sue in a real court of law somewhere, and gain personal jurisdiction over the alleged infringer, who may not even live in the United States (it is the internet where this system exists).  But Linden, to date, has not established an internal judicial system within Second Life that might have the ability to bind users of the system to the outcomes of adjudication of claims within the system – virtual complaints, claims, and so on.  Perhaps there will one day be a virtual 15th circuit in the federal court system that operates in systems like Second Life.

In the meantime, I think it would be interesting to see if it would be possible to create an informal arbitation or mediation system within Second Life that might provide an alternative way for users in the system to settle disputes over virtual land, goods, warranties of fitness, and the like.  See you in Second Life!

eBay, according to Yahoo News, was held liable for infringement of a number of copyright holders based in France.  See the Story.  This is a surprising result, especially given the large fine against the online retailer.  With regards to vicarious liability, under US Copyright law I would imagine this result would be quite surprising, especially when eBay serves so many customers and has not built its business around selling or buying counterfeit products.  eBay got its start advertising to individuals to sell their old junk, and they still are known as the online garage sale or flea market.

Under the present copyright act, the typical duration of a copyright is the life of the author, plus 70 years (works for hire and anonymous works endure for 120 years from creation or 95 years from publication, whichever is shorter). Section 302(a), (c). Unfortunately, it gets a little more complicated for works fixed before 1978 when the current copyright act went into effect. The rules vary for works based on whether they were published or not before 1978.

Under section 303, published works that were fixed before 1923 (95 years is the maximum copyright duration for works published before 1978) are now in the public domain. Works published after 1923 and before 1978 enjoy a maximum of 95 years of copyright protection under the act. However, that copyright protection is tied up with the renewal process, which was required every certain period of years under the 1909 act. If a published work required a renewal to be filed with the copyright office before 1964, and the author failed to appropriately renew, that published work would become a part of the public domain and lost its copyright protection. However, the authors of the 1976 act did look back to works that required a renewal after 1964, and made the renewal automatic for all those works. As of today, the maximum period of copyright protection is 95 years for works that were published before 1978.

As to unpublished works, these works were not protected by federal copyright until 1978. Therefore, states provided varying degrees of protection. The 1976 act authors wanted to preempt state copyright protection, by providing protection for all works that were fixed, regardless of whether the work was published or not. For unpublished works that were made recently to 1976, giving these works protection for the life of the author plus fifty years (now seventy years) would be reasonable. But what about works that were unpublished but originally fixed in the 1800s? Some state laws provided for perpetual copyright protection, which the federal law could not provide because of the constitutional mandate.

Congress decided that section 303(a) would provide a savings clause for works unpublished before 1978: if published between 1978 and 2002, the works would enjoy protection until at least 2047. If the works were unpublished in 1978 and remained so in 2002, copyright protection would continue until at least 2002.

Now, renewals are today automatic under the Act. However, the renewal intervals serve a second purpose, which is found in section 304 – the ability of the heirs of a deceased author to terminate transfers of rights of the author’s copyright by providing notice to the party or parties to whom the copyright was assigned. The timing to terminate such a grant is keyed to the renewal cycle of the copyright. See Section 304(c)(2).

The Supreme Court has addressed the problem of second party liability in a series of cases that go back to the 1980’s with Sony. In that case, the Supreme Court addressed the question of whether a neutral technology such as the VCR, with substantial non-infringing uses, could survive a copyright infringement lawsuit, and by extension, whether the manufacturer of that technology could be liable for the infringement of its end users. The Court held by a narrow margin that the VCR, because it could be used to record non-copyrighted materials or could be used for time shifting of copyrighted materials for later viewing, was covered under the doctrine of fair use.

In the late 1990’s, technology had advanced with the sharing of mp3 music files on such popular file sharing programs as Napster, Gnutella, LimeWire, and Grokster. Each of these variations on the mp3 file sharing technologies got its day in court, and all were held to be infringers who were not exempted by section 107’s fair use safe harbor. Why the change? Sony in the 1980’s was not marketing expressly to infringe on the copyrights of others. In addition, the parties representing the copyright holders were a smaller group of the overall parties with a copyright interest in the Sony case. However, by the time that Napster came to court, the Recording Industry Association of America (RIAA) represented most of the interested copyright holders as plaintiff, and evidence of illegal file sharing was quite clear from the statistical analysis and data collected from the defendant applications by the plaintiffs.

Justice Suter, writing for the Court in Grokster summed it up as there could just be no way that a court could find for the defendants, given the enormity of the evident theft of copyrighted materials via the Grokster service. Further, the defendant specifically marketed itself as a way to continue to infringe otherwise valid copyrights once Napster’s service was shut down by court order.

Section 101 provides a definition for work for hire: “(1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument…”

If a work is considered a work for hire, the hirer or employer holds the copyright of the work.  Much litigation has ensued about this between parties that have worked together to make some final work, and between employers and employees.  The Supreme Court in Community for Creative Non-Violence v. Reid established a set of factors from the Restatement of Agency to aid courts in determining if one of the parties was an employee of the plaintiff.  These factors include: (a) right of hiring party to control manner and means of production, (b) the skill required to complete the work, (c) source of instrumentalities and tools for the work, (d) location of the work, (e) duration of the relationship of the parties, (f) whether hiring party has right to assign other projects to hiree, (g) discretion of the hiree over when and how long to work, (h) method of payment for the work, (i) hiree’s role in hiring and paying others to assist with the work, (j) whether the work is regular work of hiree, (k) employee benefits, and (l) tax treatment of the hiree.  In Aymes v. Bonnelli, the court held that not all these factors are equally important, and whether or not the employer pays social security taxes and other benefits for the alleged employee will always be relevant to a finding of the status of the hiree.

If the hiree is found to be an employee, the next question is whether the employee was acting within the scope of his employment.  Avtec v. Pfieffer held that the factors in section 228 of the Restatement of Agency would be used to determine if the work was completed with the scope of the employee’s employment.  These factors are (a) if the work is of the kind the employee is employed to perform, (b) the work occurs substantially within the authorized time and space limits of the employment, and (c) the work is actuated by a purpose to serve the master.

If the employee is not acting within the scope of his employment, plaintiffs will then look to determine if part two of the work for hire definition is relevant.  Generally, courts require there to be a written agreement between the parties indicating that the party commissioning the work will own the copyrights to the work, and the work itself must fit within one of the categories in the statutory definition.

If neither of the two clauses of the work for hire definition fit the fact pattern, the independent contractor will hold the rights to the copyright.