With the ever increasing popularity of virtual worlds such as Second Life, trademark owners need to be aware of both the opportunities and challenges that their brands may face in these newly emerging markets. As a trademark owner, if you choose to conduct business in the virtual world, be aware that all of the attendant concerns of brand reputation and disparagement you face in the real world, such as counterfeiting, copyright infringement and misappropriation of property, translate into the virtual space.

Those companies which operate and police these virtual worlds are just beginning to acknowledge the challenges of protecting IP rights within this paradigm. While case law does not yet exist regarding whether property held in a virtual world has the same value as property held in the real world, the fact that some virtual worlds have a unique currency system in place that can be exchanged for U.S. dollars seems to present a strong argument in favor of the existence of property rights.

Second Life has acknowledged the challenges of IP rights in the virtual world by adopting the policy that the creator retains copyright and other intellectual property rights with respect to the content created in Second Life to the extent that the creator would have such rights under applicable law. Be advised, however, that this policy has not yet been tested in a court of law, nor have all virtual world providers adopted the same or similar policies.

While the virtual world has the potential to be a powerful marketing tool, businesses should carefully consider the pros, cons and subsequent legal issues that may arise before choosing to conduct business in this emerging market.

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