Trademark Troubles Dog Twitter, Second Life
Entrepreneur Kevin Alderman sued Second Life on Tuesday, alleging that the company allows the sale of fake virtual goods. It might sound absurd, but apparently there's real money at stake. Alderman has made around $1 million -- in U.S. currency -- selling virtual goods in Second Life, according to his lawyer.
The Twitter suit, also filed Tuesday (and then withdrawn Wednesday), was brought by the Oklahoma energy company Oneok. Like St. Louis Cardinals manager Tony LaRussa, who also sued Twitter and then dropped his case, Oneok alleged that it was being impersonated.
Assuming that the allegations in the lawsuits are true, it's not clear what the companies are supposed to do to prevent users from offering knock-offs or creating fake accounts.
At the same time -- unlike the situation with copyright infringement, libel or many other types of claims -- Congress hasn't given Web companies strong protections when users infringe on trademark. The result is that courts have been left trying to figure out whether it's fair to hold Web companies liable when users violate a trademark. So far, in what's probably the highest profile case, a judge sided with eBay in a lawsuit brought by Tiffany. In that case, U.S. District Court Judge Richard Sullivan in New York said that eBay wasn't liable for the sale of knock-off jewelry, rejecting Tiffany's argument that eBay should have more effectively policed its auctions.
Electronic Frontier Foundation lawyer Fred von Lohmann said that the decision in the Tiffany ruling could help Second Life defend itself against Alderman. But the Tiffany decision only reflects one judge's opinion. Other courts could come out differently on the matter, leaving companies like Twitter vulnerable to a never-ending stream of lawsuits.