ToS changes legal panel transcript (7): Q and A session (4)

Questions (3) Main Page

This is the final part of a transcript of the Q and A session of the Terms of Service legal panel discussion which took place on Saturday October 19th, to discuss changes made to the Linden Lab Terms of Service governing their products and services in August 2013.

If you have come to this page first, please read the introductory notes for details on the panel and its purpose. Links at the foot of this page provide access to the other sections of this transcript.

audience-1

I own a Breedable company. Doesn’t this ToS give LL rights to my business concept? And could they take a portion if I went?

00:13 Agenda Faromet (AF): Yeah. It does not give Linden Lab rights to your business concept, not the idea, but yeah they could probably try to asset some rights if you tried to sell your game to a third-party, depending on what it was that you were trying to sell. I don’t think that their claim would be valid, but the question is what they could try to do under this ridiculously broad Terms of Service, not what I think is correct.

00:48 Juris Amat (JA): If their assertions under this ToS were determined valid, then the content associated with your business would be vulnerable as you would not be able to agree to certain sales terms which may be presented to you. Regarding the exclusive rights to your content, for example, Oftentimes business partners will require that your IP does not implicate or infringe third-party rights, and you may not be able to make such warranties regarding content that has been “made available ” in SL. The same requirement is often made under licence agreement, etc.

01:39: How does ToS 2.3 affect a writer’s ability to collaborate on and peer-review works in second life without risking their  ability to market their work exclusively or as first-refusal to publishers (or perform for that matter)?

01:55 AF: It’s basically the same thing that we’ve just talked about. If you’re going to do something that requires exclusive licensing, doing it is Second Life first does implicate that; but it always has. This doesn’t change anything … It’s the same thing as anything on the Internet; when you’re sharing it on the Internet, you’re giving licence away. The big question then is can you pull that licence back and then give an exclusive licence to someone. On Second life right now, you can’t pull that licence back; it is perpetual and irrevocable. So yes, you would have a hard time signing an exclusive licence contract with someone because you’ve already given part of that licence away. So right now, yeah, you have a problem.

02:56: You’re not giving your licence away, you’re sharing it; it’s very much like if you posted it on WordPress. So you posted it on your blog on WordPress, and it becomes publicly shared. You still own it, it’s still yours, but it is no longer something that you can then turn around and give an exclusive licence to. Because an exclusive licence means that only one person has the right to publish it; you’ve already published it, you’ve already exposed it, you’ve already shared it.

03:38 JA: All exclusive rights to copyright protected content is implicated under the new terms. I would suggest that you get situation specific legal advice.

audience-3

03:39 AF: I completely agree. If you have a specific situation that you need to talk to someone about, there’s three of us sitting right here and there’s more of us in the audience.

04:00 JA: Again, I would not assume that works “made available” in-world have been published for the purposes of establishing copyright. It would require a look into the details surrounding the creation and use of that particular piece of content both in word and outside.

04:19 AF: I agree with Juris on that.

04:28: (Two questions) Could you address the issues of what happens if the Lab goes bankrupt or sells M&A, with a perpetual license? What happens to  assets in the asset server on a pragmatic basis? / If this is a way for Linden Lab to put assets on their books to sell or to do an IPO, should not the co-owner of the right share the profits and or if they go with an IPO they get founders stock?

04:56 AF: For Nicole [second question] I will just counter that with are you getting any founder’s stock or stock in Twitter? Because Twitter’s value is in its tweets, and I assume that you have made some tweets, and the tweets are pretty much their sole asset. And I’m not getting any money from those. No, you’re right. Twitter does not give you the right to sell you tweets, but Twitter sell your tweets. I promise you Twitter sells your tweets, and Twitter asks you to licence your tweets to it, and tells you outright in the Terms of Service that you will not receive any money for this licence, just like Linden Lab tells you that you will not receive any money for this licence, and Linden Lab, in all of its versions of its Terms of Service has told you that you will not receive any money for this licence. So – no.

06:00 AF: As far as what happens if the Lab goes bankrupt, it will probably shut its servers but that’s just the way it always has been.

06:12 JA: There is no reasonable expectation of ownership in tweets as opposed to content submitted to a world that stood out as the only provider of this kind that allowed users to retain IPRS.

06:29 AF: I agree with what Juris is saying that there’s no reasonable expectation of ownership in the tweets. I’m talking about under the licence agreement. and under the licence agreement you are not given any remuneration  for the licence, and you never have been. There’s nothing that’s changed under this version of the ToS from prior versions of the ToS. If Linden Lab goes public, you’re not going to get a piece of that pie.

Tim Faith
Tim Faith

07:03 Tim Faith (TF):  If Linden Lab were to go under, that would be the end of this virtual world. I guess in theory they could sell their intellectual property. You know, Blackberry is facing this today, that they just can’t compete in the market, but they have assets and patents and things that have some value. And someone could buy those assets and create a new virtual world that maybe isn’t called Second Life, but it’s called Third Life, or maybe they just create Second Life again. But if no-one wanted to buy whatever Linden’s assets were, then it would just simply go away. There are plenty of business that fail and their assets are worthless and they disappear. It’s something like the 21st century problem with cloud computing that you deal with a cloud service provider to store your stuff, but I think most of us IT people would probably say, “I probably ought to back it up somewhere else just in case because they may not be around forever.”

08:03 TF: I guess to Nicole’s point, we don’t own Linden Lab, we don’t own any part of it by participating, so they have no obligation to treat us as a shareholder  or owner of Linden Lab. There’s lots of things you might argue about your relationship with them, but ownership of Linden [Lab] is not one that I think is arguable in terms of their corporation. But I guess in reverse, they want to have assets that are available for sale. The licensing they have in your works is an asset. I don’t know how much value it has; it is just a licence, it’s not that they own it. It’s a different kind of property right that they have. But does that mean you get something back for it?

08:55 TF: Artists have struggled with this for years; you put a painting on the market and you sold it for a thousand bucks, twenty years later it’s worth ten million, you get nothing from that ten million dollar transaction. You got your thousand bucks and that’s what you got. Here, I think it’s kind of worse, because Linden [Lab] doesn’t pay you anything for a licence; if anything, you pay them to participate in this system. But that said, I guess that’s all I would say.

09:27 JA (responding to earlier comments): Yes there is now, it says they can for commercial purposes use your content that’s new. Cost-free right and license to use, copy, record, distribute, reproduce, disclose, sell, re-sell, sublicense …. and otherwise exploit in any manner whatsoever. Commercialising your works should be compensated.

09:52 AF: Okay, perhaps it should be, and we can certainly argue with Linden Lab about that, but it …  Sure, yes I agree; I’m totally with you in theory it should be.

10:13: Even if this is all done for reasons like making providing their services easier and under the umbrella of one ToS and maybe even being able to operate coming services like SLShare, still why would they claim these rights for everything and not just for the purpose of operating these services, even the rights to sell and resell?

10:33 TF: It’s hard to know what Linden’s up to. I said to Agenda before all this that it might just be easier to drastically change your terms of service once, rather than having to change them in littler or smaller parts. I think that probably, from our point of view, they ought to just take a licence that they need; obviously they didn’t think of it that way, which I think is unfortunate. But also, if they’ve got stuff under wraps that they don’t want the public to know about, then they wouldn’t publish a limited licence ahead of time that would give away things that they might be working on in secret.  And often, business transactions are under a veil of confidentiality or secrecy. so it may just be that that wasn’t a practical way to approach it.

11:24 TF: From my point-of-view, I’d rather they had a limited licence that’s more limited than this, but that was the business reason.

11:32: Does the permissions system built into Second Life set precedents in any ways that might affect interpretation of the ToS?

11:42 TF: I think you start with the basic concept of what your copyright exclusive rights are. When you yourself are licensing your work to other users in Second Life through the transfer process, it speaks to how you typically do business. Does that limit Linden Lab’s when you accept their Terms of Service? That’s a hard question. I really don’t know. I’m sure  that it’s relevant, but I just don’t know how much that impacts the interpretation of their contract with you. I know that in the regular world contracts … what’s the commercial reasonableness of a situation is often defined by what the industry typically does, but unlike you guy, who are creative people, Linden Lab’s commercially reasonable efforts, what their world is, is really other technology businesses, which unfortunately for you, is Facebook and Instagram and folks that are really kind-of hostile to creative rights. So I don’t know how you do business is necessarily going to determine how we would interpret how they’re doing business with you. But that’s not to say no, because I really don’t know; I think it’s a valid point, but that’s all part of this.

Agenda Faromet (Inara Pey)
Agenda Faromet (Inara Pey)

13:40 AF: I think they do not. I think the best thing that you would be able to argue is, “Look, I uploaded this, I set these permissions on it, and this should have been a message to everyone including Linden Lab that I wanted to limit rights in it,” but you’ve already agreed to permit modification, to permit transfer, to permit copy, so I think that overrides the individual limitations that you can set after upload. I think it would come down to whether or not you can argue successfully in front of a court, if you get to court or in front of an arbitrator if you get to an arbitrator. And how much do you want to fight it.

14:02 TF: Well I guess I’ll back-up and say there are two different contracts to. How you deal with Linden [Lab] is governed by the Terms of Service, as opposed to how you deal with other users in Second Life, which has a separate contract. So the starting-point is no, they’re unrelated. It’s also unclear, I think, what the answer would be.

14:27 JA: Interesting question. Under the old ToS I would say that it did, but now  would say that it doesn’t matter. Like in Facebook, the restriction of content to be viewed only by certain users like your friends could be a restriction that signals your intention that the content is not to be made publicly available. The permission system was similar, but now the grant under the new terms is so broad that your restrictions mean less.

14:53 AF: Exactly. And of course with the licence agreement being what it is, agreements made after or subsequent to the Terms of Service don’t matter. So yeah, I agree.

15:12 TF: Facebook, when they did change their terms of service, I think it was before it was problematic for them to just take any content and use it for their advertising purposes, so they changed their terms of service to make it OK. I don’t know we have an answer on whether, ultimately, how that works out. It’s a big world, there’s plenty of FTC actions and other things, and not everything’s resolved. I think the business side, they’re trying to have less restrictions on what they can do with your stuff. I think that’s just basically where the world’s moving. How that will work out ultimately, I don’t know.

15:52: Does any of this affect content or copy written material that is not produced in Second Life, but that is advertised in Second Life?

16:00 AF: I don’t know. I don’t know how broad it is. It’s pretty damned broad. I would say that it affects  the advertisement itself,  and my instinct is no it does not, and I would certainly argue that no it does not. But I’m having a hard time figuring out a specific situation where what you’re referring to. If you’ve got a specific question, please talk to us outside the panel.

16:39 TF: I guess if I could pose a hypothetical. Let’s say I have a website where I sell my creative works of authorship, and I happen to have a store in-world, but I don’t upload any of my content to Second Life. All I have is an advertisement that says if you want to buy my stuff, go to my website, and here’s a link. So when you click on it, you go to it from outside Second Life. I think that for you to issue a licence to Second Life, you have to fit within the definitions of the Terms of Service, and your website’s not in Linden Lab’s. I don’t know that they could claim – well I guess that they can claim anything, but I don’t know that they have a basis to claim ownership in your website’s content. But if you upload samples, that might be different. I guess it would really depend on what you put in Second Life versus what you have outside, and what’s the overlap.

17:44 JA: I’d say that depends on whether that advertised content was submitted to the service.

17:51 TF: Because the use of “content” in the Terms of Service says that it must be uploaded in Second Life and “published, or submitted to or through the Servers, Websites or other areas of the Service”. So if it really is just strictly an advertisement that says, “Hey, go to my website to buy something, I think that’s different from if in your store I can get a copy of the thing that you’re talking about.

18:17 JA: Basically I agree with Tim’s comment.

18:20 AF: Yeah, completely.

18:24: Is there a resource for consumers which offers guidance and somewhat distilled information about the majority of social media that most of us use, for the purpose of assisting us to know what these TOS agreements are saying and how potentially unfair they are? Many of us use various social media to promote our art. Even some you mentioned, we may not have known about and presumably there are others which are problematic that we should know about.

18:55 TF: I don’t know of any off-hand. It might be the FTC publishes some stuff about this, because they’ve litigated with Google and with Facebook, and there are agreements where those entities are supposed to do stuff, but more about privacy than about IP. So I don’t know. I couldn’t say off-hand that I’ve seen one.

19:19 AF:  Every year I do a social media terms of use panel for the ABA, and we go through some of the major social media sites’ terms of use and take a look at them. But that’s for the ABA. I think just being aware, I’m trying to think of anywhere that just sort-of blogs; even the EFF doesn’t really go through and do that. I think that’s probably something that maybe I should start doing.

Juris Amat (profile picture)
Juris Amat (profile picture)

19:59 JA: VIPO! Consulting a lawyer; is your right and responsibility. That’s why VIPO was created and I expect that each and every creator artist who has uploaded content in this world will now take advantage of our offer for free consultation.

The ToS refers to “you” which has stirred a lot of debate. If one of my avatars agrees to the ToS and my others do not,  who is “you”? The real life person or the scope of the Avatar? Can a creator work as IP owner through the agreed rights of another user’s avatar that did agree?

20:33 TF: The account is defined as the “contractual rights and obligations under this Agreement associated with a particular Account Name”. I would say, I don’t know how account name is defined off-hand; it says it is defined somewhere in here. It’s an interesting question, tho. If you have alts, who’s banned and who’s not? What do you think, Juris or Agenda?

21:01 JA (in a further response to the question about advertising): I understand your frustration. It is difficult however to address specific legal question in this type of setting. please contact me or one of the others directly.

21:22 AF: You can IM us or probably send us a note card.

21:26 AF: As for this question, that’s a really tough question. I think it’s the individual. I think that if you have agreed as one of your avatars, you’ve probably agreed as all of your avatars. I really don’t have a concrete answer, but I think it is you the individual.

21:53 TF: Section 4.2 says, “You must choose an account name to identify yourself to Linden Lab staff in connection with your Account (your “Account Name”) which may also serve as the name for your graphical representation within the Service under this Account (your “Avatar”).”

22:08 TF: The other practical thing is, if you had five alts, one of them accepted the Terms of Service and logged-in and the other four never logged-in again, avoided it, I don’t know how they would ever get in to do anything. so the only one that would have ever agreed would be the one able to get in and upload and download stuff. So I don’t know if you got around it that way. But I guess I would read that as saying that they’re really talking about your real life identity as opposed to alts and some might be banned and some might not.

22:41 JA: Oh, I’ve been waiting for that one. I think it would also apply based on individual agreement made by the real life account holder.

22:50 TF: It’s tough to say it’s any other way because you would go to a real life court to sue them, that would be you, it wouldn’t be your alts. I mean your avatar can’t appear in a California court to sue anybody. You’re on the other end of that contract with them in real life, not in Second Life. so I don’t know how having alternative avatars is a way around compliance.

23:14 AF: Yeah, I agree.

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