Mar 25, 2011

Kill Them All, Let God Sort Them Out

An article about Linden Lab IP Policy


Author's Note: This article addresses events that spanned beginning in 2010 and culminating a year later, and I'd like to make the point that I did not write it in anger or indignation. If anything, the process was a long standing exercise applicable to a college book chapter I was writing concerning the problem with intellectual properties, virtual environments and how the prosumer culture has given rise to a void that has yet to be filled accordingly. 

It was never my intention to "make a fortune" off of the intellectual properties of others, since I clearly kept a price point that was orders of magnitude lower than what such items could command. The purpose of creating and providing the arcade machines was to illustrate points made in the college book as a real-world case study. If anything, I was expecting them to be flagged within a week, and taking them down personally resulted in people asking me in person to buy them. You'll find below the trials and tribulations of that time, as well as a hybrid solution that can be forward looking and highly beneficial to Linden Lab and IP holders going forward, based on the conclusions I had written nearly a year before. Please understand the historical context of this article, and consider the (still) forward looking solutions presented.  While IP infringement is a huge concern in our digital society today, one of the reasons is the rise of "prosumer" culture and an inability to properly work within this new found realm. There exists today countless real-world "knock offs" within the digital world, and my arcade machines were meant as expendable bait to prove a public point.
Thank you.

When I began to write my book chapter in 2009 for “Virtual Worlds and E-Commerce: Technologies and Applications for Building Customer Relationships” (published in 2010) I included a section concerning the proper method by which to include IP work in a virtual environment, as well as the major downfalls of attempting to do so in today’s industry. Simply put, despite doing the legwork and tracking down somebody who cares at a company that will provide the required forms to fill out and submit in order to declare and describe your project and how you will use their IP, none of this has any relation to actually keeping your project in a virtual environment.

Even in the event that you, as an independent content creator, file proper paperwork and have approval for such items, that approval can be revoked at will and without any indication from the IP holder to the creator. IP License paperwork between independent creators and IP Holders has this uncanny ability to exist at the whim of the IP Holder, which can consist of days or maybe a year, and vanish in a moment without warning. Even if an independent creator has filed the proper paperwork and has the approval, that approval is as worthwhile as not having the approval at all.

If you need an example of this in action, you need only look at the Frank Lloyd Wright museum in Second Life.

There are many reasons for this, and I outlined most of them in the chapter, but I’ll go into a little bit of that here for this article.

1. Linden Lab policy concerning IP on marketplace and in-world is draconian at best.

Instead of actually verifying whether or not an item with IP suspected of being infringing is actually infringing, ie: the person has filed the paperwork for it to exist, Linden Lab takes a “Kill Them All, Let God Sort Them Out” approach. They automatically, and without any form of verification, assume that all IP in their marketplace and in-world is infringing and removes them as-per their own policy. It’s a shoot first, ask questions later approach.

This is likely because it can be readily assumed that most of the time, such content actually is infringing and it is easier to simply remove it than to verify. However, there is also another cause for this which worries me.

2. IP Holders make the same assumptions.

When Linden Lab makes the assumption, you get a little peeved, but when IP holders make the same assumption and file a complaint, and Linden Lab blindly makes the same assumption, we have a problem. This wholesale, shotgun approach to dealing with IP in a virtual environment is flawed at best, even if Linden Lab can claim that 99.9% of the time it works. While on the surface, the method does work, the gains from revoking IP infringing materials in a virtual environment, created by the in-world users, is negligible compared to the widespread torrent of illicit versions that will be sought and created off the radar.

Which brings me to another point made in the book chapter.

There exists no reliable or standardized method for independent content creators to submit and obtain permission for IP works which they create. If Dell Computer wanted an island, obviously Linden Lab would have on file that Dell Computer company has bought the island (or a marketing company in their name) and that island, and all IP included are safe from scrutiny. However, if an independent content creator filed the paperwork on their own behalf to get permission to create a Dell Laptop for marketplace, regardless if Dell Computer approved the request, their legal department is usually in a position where they have absolutely no idea that it was alright to do so, and thus file a complaint to Linden Lab for IP Infringement, who in turn takes that request as gospel and removes the items in the complaint without any verification whatsoever.

In the case of the Frank Lloyd Wright Museum in Second Life, there was a non-profit agreement with the Frank Lloyd Wright estate, which was upheld by the content creators in entirety, but the legal team later revoked for dubious reasons; They claimed that any third party infringements on Frank Lloyd Wright existing in the virtual environment were the result and responsibility of the non-profit agreement holder who actually had filed the agreement, when clearly it is not.

So again, we’re looking at the process by which IP in a virtual environment exists and is erroneously handled by both Linden Lab as well as the IP holders, without due process or recourse to the content creators whom have filed proper paperwork and agreements. Let alone the erroneous (and quite silly) notion that a single content creator is responsible for any and all subsequent IP usage by any and all independent content creators in an open ended virtual environment.

The left hand has absolutely no idea what the right hand is doing.

While IP holders, and even Linden Lab, is entirely in their right to remove IP from their own system or send a cease and desist notice for such content, this brings up another disturbing problem which neither Linden Lab nor the IP holders have thought about.

3. You cannot kill a Hydra by cutting off the heads.

While IP holders are perfectly within their legal right to send a cease and desist notice for content in a virtual environment which they feel infringes on their intellectual property, and Linden Lab is perfectly within their right to remove any materials which they feel infringe on intellectual property (even if it is perfectly legal and non-infringing – case in point Ozimals vs Amaretto), the fact remains that by doing so you are creating more of a problem than you started with to begin.

There are 64,000 + users of the Second Life virtual environment system, all of which have the power to create items at will with the built-in toolbox. There exists a real market for branded items which are real world brands and likeness. Removing a single, or handful of items from in-world or marketplace that are considered infringing is cutting off the 5 heads of a Hydra and expecting not to see 64,000 + heads grow back.

When I wrote the book chapter, I wanted to illustrate these issues in more than the body of text that I was writing, and so decided to create the Arcade Legends arcade machine series in Second Life. It includes:

Pacman

Galaga

Joust

Millipede

Q*Bert

Polybius

When I created these machines, I tracked down and filed the paperwork for the respective IP holders, such as Namco/Bandai. This is due process, and I took the legal route prior to creating the machines for availability in Second Life and on marketplace. The purpose, however, was to see how long it would take before one of the IP holders would file a claim against me, despite that I’ve filed the paperwork with them to exist, and to see how quickly Linden Lab would take that claim as gospel and immediately remove one of the machines without so much as a manner by which I could dispute or show beforehand that they are in-fact legal.

In the case of Pacman, it took Linden Lab exactly one year before they removed the machine in a shotgun manner, and without recourse. The shotgun approach is clearly in effect, as it seems every single instance of any Pacman machine was removed from marketplace by any and all content creators. But in my case, I was purposefully baiting Linden Lab and the IP holder (Namco/Bandai) to see if they would lump me into the infringing category without question or if they would actually find out if my machines were legit.

Clearly Linden Lab (as well as the IP holder) have failed the test miserably, and proven the points made in the book chapter. The paperwork filed for those items is absolutely meaningless (and I knew it would be when I filed them), in that even having approval doesn’t mean I actually have approval.

Thank-you, Linden Lab and IP holders for acting miserably and blatantly predictable.

In light of all of this, the point was not whether I would make money on those machines, nor was there any expectation that they would continue to exist for the public. I actually created them all as expendable and am actually surprised they’ve lasted for over a year on Marketplace.

But here’s the problem:

When an IP holder files a cease and desist, or Linden Lab takes their own initiative to declare something an intellectual property infringement, and subsequently removes the item, whether or not it really was an infringement of intellectual property is not the problem. The problem is that when you remove those items (which are a finite number and easily trackable), you create a void in the supply and demand chain which will be filled despite your minor victory.

Let us assume that there were maybe five such Pacman machines on Marketplace, and that they constituted the most popular and sought after items of that type in Second Life. In the case of my Pacman Arcade machine, I can actually make that claim – it was one of the closest replicas of the real thing available, and pretty much was the de-facto item to get if you wanted a Pacman machine in SecondLife. Now, of course putting aside the IP issue and whether or not it was legal, you take those readily available items, which are in plain view, and the first place most people will go to obtain such an item, and you remove them all.

What do you think 64,000+ individuals with the ability to create whatever they want are going to do when you take away something they clearly want? If you guessed “64,000 people will find a way to make or obtain a Pacman machine with or without the Marketplace” you have guessed correctly.

Congratulations, Linden Lab and IP Holders. You’ve just won the battle and lost the war. You’ve removed a handful of infringing content, and created a chasm of demand that will be filled regardless, by tens of thousands of users in the virtual environment.

How do I know this? Well aside from writing about it in the chapter, and predicting the chain of events as they are now unfolding, I also predicted the following:

Because of the virtual hydra effect, when you remove infringing content from availability, the supply side of the equation becomes unbalanced and there is nothing to quell the demand side of the scale. Users in this instance (consumers and creators) will find other ways to obtain such items with or without the consent of Linden Lab or the IP Holder. This means, in short, that both Linden Lab and the IP Holder have managed to cut the heads off of a Hydra and create the circumstances by which tens of thousands of people will find ways to obtain the illicit item in countless (and unseen) ways.

In my case, removing the Pacman machine from Marketplace resulted in not less demand, but more. Shortly after the removal of the item, the people who were looking for that item found that it was no longer available and began contacting me directly in-world to obtain one.

I explained why the item was no longer available, in that Linden Lab claims IP Infringement, and that I will abide by that decision (whether or not Linden Lab is wrong) and not make the item available on Marketplace. The users insisted, and asked how much I would want for the item in my inventory as a direct purchase.

I then explained that I have no idea if the item will remain available in-world either, or if Linden Lab will destroy the item key and thus all instances of the item in-world and from inventories, and that I cannot promise that Linden Lab will not do this, and take the item away from them. Nor would I offer any sort of warranty or refund if Linden Lab chose to do so.

The people simply do not care. They told me they would take that chance, not hold me liable if Linden Lab removes it from them, and in the event Linden Lab did remove it entirely, they wanted to know how much I would charge to build another one from scratch.

As one of the best arcade replica creators in Second Life, I find this mildly disturbing. Not because I can create near perfect arcade replicas for people, but that I understand a fundamental aspect of this scenario that clearly Linden Lab nor the IP Holders do not. As one of the best arcade replica creators in Second Life, I understand that even if I refuse to make these items for people, the demand for them is so high that they will either make the item themselves (which is bound to be a highly inferior representation, and thus do more to harm the IP representation in question), or they will find a builder in-world who will create it for them as a custom item.

It is actually better for the IP Holder and Linden Lab that I (or a skilled independent builder) create these items in a controlled manner, and negate inferior quality versions, than if I were to simply abstain and let the users create the items themselves. At least if I were making the items, the quality control is there, and Linden Lab isn’t in a position to chase down thousands of items with varying names and keys, of which will perpetually continue to multiply in-world out of their control.

In the end, it is actually in the best interest of Linden Lab and IP Holders to have a high quality creator in their pocket making these items available officially, than to cut off all IP usage and leave the demand high with no supply. The latter scenario means that Linden Lab and the IP holders are actually doing far more damage than they are preventing.

Which brings us full circle as to what the actual X-Factor of Second Life is. I had written an article here a number of months ago about the Second Life X-Factor, and blatantly showed off the IP infringing works – such as the Pegasus Sneakers from [hoorenbeek] which are clearly a fantastic representation of Nike sneakers, a Capri Sun juice pouch that I own (and created myself), a Coca Cola vending machine, and a Papa Johns pizza box with ordering capability.

The point to all of this is in the details.

Yes, IP holders are perfectly within their right to demand the removal of such items from a virtual environment, and Linden Lab is perfectly within their right to remove those items at will, but in the grand scheme of things, it is doing far more damage than good in doing so.

Let us put the legal stuff aside for a moment and think outside of the box, shall we? Call off the lawyers for a moment and let’s take a look at what is actually happening.

On one hand we have very talented in-world independent content creators capable of replicating intellectual property at will, and of very high quality. On the other side of the coin we have an insatiable demand for those items by the public, so much so that they are willing to go to great lengths to obtain them. We also have to consider the IP holders in all of this, and the perceived liability that Linden Lab sees as something to reduce for these items.

Clearly, if Linden Lab removes those items, they will be made again indefinitely, except that it will no longer be easy to keep track of them all. So, I would would like to propose a solution that will benefit everyone involved, and achieve what the IP holders are after.

How to Kill a Hydra

Linden Lab has an underutilized Solutions Provider directory. These companies and content creators are twiddling their thumbs with untold amounts of talent at Linden Lab’s disposal.

IP Holders like the idea of reducing or eliminating infringing materials, but they also like the idea of spending little or no money for marketing. There is such a thing as cutting your nose off to spite your face, and IP holders and Linden Lab do that very well concerning virtual environments.

Linden Lab has the central outlet for such items to exist, it is called Marketplace.

It is common knowledge that in order to kill a Hydra, you have to cut off the head and immediately cover it with tar so that two more heads will not grow back. In this scenario, what the IP holders and Linden Lab are failing to do is cover the stump with tar before moving on.

So here is the solution that addresses the root of the problem and not just the symptoms:

Utilizing the Marketplace as well as the Solutions Provider directory, Linden Lab creates an IP program in which companies will be given the choice of outright removal of items or a beneficial IP agreement. It will be explained to these IP holders that while they are perfectly within their rights to request the removal of such items, it will cause far more damage in the long run than if they entered into negotiations with Linden Lab to curb the problem through allowing a solution provider to create high quality versions of IP with the approval of the IP holder in question, and giving that solution provider the undisputed approval of making those items available to the public via Linden Lab’s own Marketplace.

Linden Lab would not charge a fee for this to the IP Holders, and the service to them would be entirely free. It would also be explained that this method would curtail infringement by creating an official item, or group of items, which are approved, while immediately knowing that any other content creator which uses that IP will be immediately removed without question because we can verify that only one content creator has been given the explicit approval. This will eliminate the underlying need for illicit content, supply the demand for branded items in-world, and severely limit or eliminate infringing materials in the long run.

Linden Lab will offer the content creator, in the event of the approval of this program, the advantage of having full promotional options without charge for those items on marketplace, and Linden Lab will still take a percentage of sales for those items sold.

Items that are approved for this program will receive a designation of “Official Item” on marketplace by Linden Lab, letting users know that the item is officially sanctioned by the IP holder and not subject to IP Infringement, and that the creator is playing fairly.

Why this is the solution

Linden Lab is looking for ways to improve corporate involvement, while appeasing the existing content creators, all while adding revenue. This approach tackles all of the issues at hand, while making the content creators happy, the IP holders happy, and of course Linden Lab happy.

With this solution, the following will happen:

Content creators will still initially make IP infringing items, but instead of treat those items as something to banish, they are left to remain available in order to not cut off the hydra head without a way to stop it from multiplying. This is very important.

When an IP holder contacts Linden Lab concerning that infringement, Linden Lab offers them a better solution than simply removing the items in question. A solution that is far more effective and beneficial.

If the IP Holder agrees to the IP Program, then Linden Lab and the IP Holder look through the marketplace to find the best representation of the item, and assuming such exists satisfactorily to the IP Holder, that content creator is contacted with the offer of being the official outlet for the IP Holder in Second Life.

If such does not exist, then the offer is made to the Solutions Provider directory, with a call to submit items to win the bid.

The end result is that when an official item is made, in conjunction with the existing talent of the content creators in-world, all other IP infringements can be removed safely while leaving a high quality replacement for the public to continue purchasing. The IP holder then has a safe and effective marketing outlet in a virtual environment that will not cost them money, and will act as an ongoing viral placement as it multiplies across the grid in a positive manner.

Linden Lab makes money on the sales of those items, and more so as they are officially branded items which are likely sought after more than independent knock-offs.

Content creators have an official outlet for their abilities, and are rewarded (not punished) for having the ability to create high quality professional items in Second Life. Their talents are celebrated and not scorned.

The point to all of this is to acknowledge that independent content creators are most likely not creating items with malicious intent, but to serve a known and widely devoid need wherein there are no official channels. When IP Holders and Linden Lab also acknowledge this, and act accordingly (and intelligently), it becomes a winning situation for everyone involved instead of a never-ending game of cat and mouse.

The solution is simple. IP Holders and Linden Lab can continue to squander money and employee hours playing an endless and exponential game of cat and mouse with tens of thousands of content creators, or they can actually turn it into another successful revenue source that offers companies a way to promote their brand without cost.

As for the Pacman arcade machine, and other related arcade machines that I have available, they will exist until they are removed from Marketplace, and I still make no warranty or refunds if Linden Lab decides to obliterate their existence from the asset servers. I have no intention of replacing them if they are removed, nor will I make any attempt to counter their claim of IP Infringement, since it is likely that the agreements I had filed are null and void at the whim of the IP holders.

Technically, they are all IP Infringing with or without the approval, because the approval is as useful as not having the approval at all, and both end with the same outcome. Which probably explains why most creators don’t bother to get approval. It’s equally futile no matter which way you look at it.

I offer Linden Lab a way to change this futility, and make money in the process (as well as some really amazing PR in the real world). Or… hey… whatever… keep doing what you’re doing, Linden Lab… it’s your payroll and time, and clearly it’s working for you after all these years.

Now if you’ll excuse me, there is a great pair of “Pegasus” sneakers I want to look at over at [hoorenbeek].

6 comments:

  1. How can Linden Lab's top lawyer pay any attention to minor things like SL's legal problems when she is busy defending herself from two different SEC fraud prosecutions. Yes, Linden Lab's chief counsel, Lisa Berry, is the target of not one, but two different cases at different companies, where she is accused of fraudulent backdating of executive's stock options. It could result in her being forbidden from ever workign for a public company and loosing her law license in California. See http://ca7.com/ZZo

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  2. That's a sticky situation all by itself. However, I offer a solution to turn that ongoing legal cat & mouse game into something that is profitable and reduces the strain on Linden Lab, IP holders and the content creators. A positive outcome versus a negative one.

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  3. This comment has been removed by a blog administrator.

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  4. This comment has been removed by the author.

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  5. After reading posting pretty carefully, I'm still not clear on a core point:

    Did you, or did you not, have explicit written permission, from an authorized agent of the games' IP holders, to use their intellectual properties in any or all of the "test games" in question? Or had you only filed a request for such permission, and either received no answer or a negative answer, in each case?

    That seems material as to whether the IP holders and LL were acting improperly, or simply, in your view, unwisely -- in the larger picture.

    As an aside, the flavor of your proposed solution (and its justification) are much like that of the program lately promoted by YouTube and adopted by many music IP holders. It was recently covered in this NPR MarketPlace report: http://marketplace.publicradio.org/display/web/2011/03/28/pm-copyrighted-material-staying-up-on-youtube/

    As Google (YouTube's owner) is of course a well-known bastion of "technocommunism," I don't suppose that buys you any brownie points in some quarters!

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  6. The general consensus that was returned from submitting the paperwork for authorization was that they expressed neither approval nor disapproval, by technicality that there was no clear cut manner to address the exact circumstances of the IP usage. So the items in question existed at the whim of the IP holder until such time as they could essentially evaluate the usage case and circumstances to form a better understanding. As far as I can tell it took about one year for the legal department to simply deny it and thus take it out of the previous grey area of neither approval nor disapproval. This is normally the case in open ended "prosumer" virtual environments where the consumers are also the producers of content, even if such written permission does exist (and not limbo), since that written permission is more often than not overridden on a whim, with a DMCA filed hours afterward. While I am not against DMCA notifications and due process that is afforded to IP holders (and indeed applaud the right to make use of them) I still believe a blanket approach is not appropriate. figuring out more options to put on the table is not only worthwhile, but mandatory going forward in the multimedia landscape of the future, and that is going to require a lot of unorthodox thinking.

    It is correct to assume that the proposed solution mimics that of Youtube in how they handle the music and other IP, in that they've come to the same conclusion as stated in this blog entry - While DMCA is a perfectly legal recourse, it falls short and becomes costly to continue implementing versus a hydra scenario that is social media and remix culture. I may or may not win brownie points for my views or even my approaches to illustrate things, but I believe I make a compelling point from a first hand experience instead of talking about things from the vantage point of not having gone through the process first hand.

    In the meantime, such "indefinite pending" circumstances are the issue, because there currently is no clear cut manner for prosumers to follow in this media realm (virtual environments) when it is open ended (consumer created). I believe while that makes a large majority of people in these virtual environments criminals by technicality, there can be a better option on the table to alleviate or even foster the elimination of faulty practices not just on the prosumer side but on the IP holder side as well. Not to mention it can be a solution that benefits all involved.

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