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David Lucifer
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'Second Life' faces threat to its virtual economy
« on: 2006-11-15 11:18:07 » |
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CNET News.com http://www.news.com/
'Second Life' faces threat to its virtual economy
By Daniel Terdiman
http://news.com.com/Second+Life+faces+threat+to+its+virtual+economy/2100-1043_3-6135699.html
Groups of Second Life content creators were gathering digitally Tuesday to protest the dissemination of a program they worry could badly damage the virtual world's nascent economy.
The controversy gathered steam Monday when Linden Lab, which publishes Second Life, posted a blog alerting residents of the virtual world to the existence of a program or bot called CopyBot, which allows someone to copy any object in Second Life. That includes goods such as clothing that people purchase for their in-world avatars, and even the virtual PCs that computer giant Dell announced Tuesday it is going to sell in the digital world.
Second Life users can purchase virtual items with a pretend currency called Linden dollars--named for game creator Linden Lab. But they use real-life currency to acquire that virtual coin. In fact, there's an exchange rate between the two: One U.S. dollar will buy 271 Lindens, enough to buy a basic outfit for an avatar, which is the digital representation of a person.
Click for gallery
Problem is, it's not clear yet if there's anything Linden Lab can do to stop people from using the bot. Linden Lab said Second Life content creators who had their wares stolen had few immediate options for stopping the thefts and that the best recourse for them could be to file a Digital Millennium Copyright Act complaint--in the real world--against offenders.
Some virtual entrepreneurs now worry their livelihoods are at stake, and some are threatening to shut down their in-world businesses before they get fleeced.
"The problem with the DMCA is that it takes many weeks," said Jim Mallon, a Second Life content creator who has been in the virtual world since its 2003 beta. "By that time, someone's work could be (copied and stolen) and distributed all over the grid. I am so surprised Linden Lab did not see this coming and stop it."
Second Life is an open-ended, 3D, digital virtual world in which members can create nearly anything they can imagine, and in which anyone owns the intellectual property rights to what they create. As a result, there are hundreds of businesses selling clothing, vehicles, furniture and the like, all for Linden dollars. A complex and stable economy has sprung up around such commerce.
The reaction to CopyBot is not the first virtual revolt. Many Second Life residents recently complained when Linden Lab announced it was raising the price for the in-world "islands" it sells. As a result, the company said it would delay the price hikes for two weeks.
Residents have also complained about other issues, such as problems with the user interface and previous issues related to the security of created content.
On Tuesday afternoon, even as the controversy raged, Linden Lab posted a second blog entry addressing CopyBot and the resulting fallout.
Titled "Use of CopyBot and similar tools a (terms of service) violation," the post by Cory Ondrejka, Linden Lab's chief technology officer, attempted to ease concern that in-world merchants were at risk of having valuable goods stolen.
"Second Life needs features to provide more information about assets and the results of copying them," Ondrejka's post began. "Unfortunately, these are not yet in place. Until they are, the use of CopyBot or any other external application to make unauthorized duplicates within Second Life will be treated as a violation and may result in your account(s) being banned."
To "Baba Yamamoto," the Second Life name of one of the members of the group that created CopyBot, the uproar over the software is understandable but disappointing.
Yamamoto told CNET News.com that CopyBot was created as a tool for testing and demonstrations and was never intended to be used for illegal theft. But because the tool was created using an open-source license, some Second Life users have gotten hold of it and are now freely using and distributing it.
"It's not that the code is some kind of exploit," Yamamoto said. "It deals with legitimate client data that every client receives, but it takes that data and converts it to a packet and sends it back to the servers, duplicating the appearance of objects and avatars. It acts like an import/export tool."
LibSecondLife, the group that created CopyBot, lists as its mission statement being "an open-source effort to create a stable platform for third-party Second Life development." However altruistic its motivations may have been, the group appears to have lost control of its tool.
And many residents are very unhappy about that.
"The essence of the creativity in this world is largely because of creators and their work being protected," Mallon said. "This tool defeats all protection. So if you labor to build a business like we all have, your work can be stolen."
Another resident, Isabella Lazarno, agreed.
"Everything that everyone has worked for in here is now affected," Lazarno said.
As an example, resident Damanios Thetan demonstrated how easy it is to use CopyBot to copy objects.
Thetan showed News.com that copying an in-world car took no more than a few seconds. Similarly, Thetan created a quick copy of the author's avatar.
"My (alternate avatar) is run by CopyBot," said Thetan, explaining the process. "It copies the complete car, or everything I have attached. After it's copied, (I have) full permissions, meaning I can make as many copies as I want."
Other residents think that the fear of CopyBot may be overblown.
Eric Rice, a blogger known in-world as "Spin Martin," said that he has long seen Second Life content as digital artifacts that could be replicated.
"Their (businesses are) in the digital space, which may or may not have been obvious in the sense (that) data (has always been) copyable from day one," Rice said. "We just live with that truth."
But Rice added that he understands why content creators are worried the rug may be pulled out from under their businesses.
"I'm fascinated about the RIAA-ish angle--content people protecting their stuff passionately," he said.
Meanwhile, as content creators continue to meet throughout Second Life, Linden Lab is trying to put the controversy in context.
Ondrejka wrote in his blog post that anyone who feels their content is being stolen using CopyBot should inform Linden Lab in addition to filing a DMCA claim. Presumably, the company will take action on behalf of such content creators.
But Ondrejka also tried to explain why Linden Lab isn't able to immediately halt the use of CopyBot and other such tools.
"Like the World Wide Web, it will never be possible to prevent data that is drawn on your screen from being copied," he wrote. "While Linden Lab could get into an arms race with residents in an attempt to stop this copying, those attempts would surely fail and could harm legitimate projects within Second Life."
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David Lucifer
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Second Life Will Save Copyright
« Reply #1 on: 2006-11-20 19:36:30 » |
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source: Wired
By Jennifer Granick
02:00 AM Nov, 20, 2006
Businesses in Second Life are in an uproar over a rogue software program that duplicates "in world" items. They should be. But the havoc sewn by Copybot promises to transform the virtual word into a bold experiment in protecting creative work without the blunt instrument of copyright law.
Second Life, operated by Linden Labs, has developed differently from other virtual worlds because it allows custom content and encourages in-world enterprise. It's a hospitable place for creators to sell virtual goods like clothing, furniture and hairstyles.
As in any economy, the value of those goods depends on their scarcity: people will pay more for a fantastic hairdo that no one else has. If Copybot can indiscriminately duplicate these items, no one has to pay the creator for them. Copying is a value killer.
As a result, Second Life merchants are understandably up in arms over the software, reportedly closing their stores until the problem is resolved.
So you would think that Linden Labs would be pulling out the big guns, including digital rights management technology, or DRM, and intellectual property lawyers, to fight the Copybot problem. After all, there's a lot of liability to go around.
People using Copybot may be infringing the rights of the creators of those works. Under some circumstances, wielding the program might make you liable for contributory copyright infringement, if you're inciting infringement. (Libsecondlife, the group that released Copybot, claims its original version sought permission before it copied, but that another party modified the open source program to delete that prerequisite.)
But Linden Labs has confronted this threat to its bottom line in a different and novel way. DRM won't work, says CEO Phillip "Linden" Rosedale. Nothing can stop someone from copying textures or shapes off their own computer, any more than technology can stop someone from copying audio streaming through their speakers. Also, the company doesn't want to be in the business of adjudicating copyright disputes.
As Rosedale succinctly put it, given the ambiguity in copyright enforcement, Linden will inevitably make mistakes, and it doesn't want to make mistakes.
Instead, Linden Labs will take another approach. In the short run, it believes that use of Copybot violates its terms of service agreement, allowing the company to ban an offender's account. Long term, Linden says it will create better information identifying creators and dates of creation for in-world content. This will allow copyright owners who've been aggrieved to bring infringement claims against offenders personally, at least in theory.
In practice, the available legal tools may not help the virtual world creators very much. The Digital Millennium Copyright Act may give shopkeepers the power to force Linden Labs to delete copied items, but it will not provide financial compensation to the victims of infringement unless they file a federal lawsuit. Given the cost of these virtual goods, there aren't going to be many infringements worth the expense of suing.
The next phase of Linden's response is more interesting. The company plans to develop an infrastructure to enable Second Life residents and landowners to enforce IP-related covenants within certain areas, or as a prerequisite for joining certain groups. In effect, Second Life's inhabitants will self-police their world, according to rules and social norms they develop themselves.
This is exciting, because it turns Second Life into a laboratory for trying out alternatives to prevailing real world copyright rules.
In real life, copyright protection is an effort to balance incentives for innovation with rights of public access to culture and information. The intuition behind copyright is that when creators know that they will reap the financial rewards of their creation, they will produce and innovate. Without copyright, you have stagnation.
We're already seeing this in Second Life, if merchants are really closing their doors in response to the Copybot.
But U.S. copyright law is generally not tailored to the special needs of a particular industry. The Second Life community might be able to strike a different, yet functional, balance between encouraging creators and allowing public access.
For example, the virtual world's creators will not necessarily benefit from strong IP protection. Much of the creativity in Second Life is derivative. People want to be able to riff on hairstyles, clothing, furniture and vehicles without having to worry about derivative works infringement claims.
The community will probably not opt for too little protection, either. Unlike the community of music fans, where consumers far outnumber creators, in Second Life a higher ratio of people are creators as well as users. These creators have an incentive to protect rights that encourage innovation, because they themselves will be adversely affected if creativity is under-protected.
The idea that innovation can flourish in the absence of copyright enforcement is not as heretical as it might seem.
Take the fashion industry. As law professors Chris Sprigman and Kal Raustiala write in their paper on the subject, neither copyright nor patent law prohibit copying fashion designs. There is some protection for the brand associated with the apparel, but no law prohibits a knock-off Chanel suit, peasant skirt or narrow lapel. And yet fashion is highly innovative, with new styles several times a year, despite low IP protection.
Similarly, professors Emmanuelle Fauchart and Eric von Hippel write that haute French cuisine (.pdf) is another area with low IP protection, yet high levels of innovation and creativity. No law prevents copying recipes. Instead, French chefs have developed social norms, much like those Linden Labs seeks to empower, against exact copying, dissemination of tricks of the trade and adopting significant innovations without crediting the chef responsible.
Failure to follow these norms results in reputation harm, including ostracism.
Such a norms-based (rather than law-based) system might work in Second Life. Norms-based systems are context-sensitive and highly responsive to the concerns of the relevant community. They are also cheaper and quicker than litigation. But norms-based systems can only work if the people in the community value the rewards the community can bestow or withhold.
What's happening now in Second Life is a grand experiment, and one that has implications not just for virtual worlds, but for IP protection more generally. Are digital goods in virtual worlds more like music or fashion, more like movies or food? Will the Second Life community find a happy medium that allows inspired creativity without hindering their growing economy? Could social opprobrium based on shared values replace rigid and cumbersome IP regimes?
The answers will depend in part on the evolving ratio of creators to users, whether different communities share the same values related to copying, the cost of copying, how much branding and authenticity matter to buyers, and whether creators can enjoy an economic benefit from being the first to make something.
The stakes are high. Not only are the financial futures of Second Life merchants up for grabs, but so is Linden Labs' business model. If the company's way of dealing with copyright falls flat, creators will stop creating, and the growth of the online world will be stunted. Needless to say, the movie and music industries will refuse to license their works for in-world sales and distribution.
Watching Second Lifers, and Linden Labs, chart a new copyright course will be fascinating, and may provide lessons about the future of copyright in real-world communities.
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Hermit
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Re:'Second Life' faces threat to its virtual economy
« Reply #2 on: 2006-11-20 21:02:52 » |
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Dear Lucifer,
As discussed relatively recently, it is sad to see such streams of angst and anger based upon fundamental errors of perception, in turn based on unstated and unconsidered assumptions. A few easily identifiable mistakes are the remarkably modern ideas that: values come only from scarcity; people require incentives to engage in interactions; value can be separated from interactions; ideas are, in and of themselves, valuable; and payment is the only viable - or even best possible - reward mechanism. None of these are absolutes, and most of them are likely inversions of the underlying reality.
I find the importation of these ideas, arguably all bad (and, if we are in any way shape or form correct about where AI is going, extremely temporary anyway), from the "real" world with all its failings and misery clear to anyone who would look, into the virtual world where we sculpt with our imaginations and where scarcity speaks loudly only of a paucity of imagination in those screaming most loudly about it, extremely depressing. Whatever happened to the spirit of the Renaissance? How do these Lindenites imagine the "age of magnificence," which drove innovation in Athens - and Alexandria - functioned and thrived before lesser minds destroyed these loci? I guess that not seeing their value in the modern world, that nobody bothered to learn about them.
As you know, I suggest that there are models out there which not only might be, but almost certainly are, much more rewarding than adopting the idea of "intellectual property" along with the need for - and inextricably intertwined costs of - police and scarcity. When Newton said, "I have stood upon the shoulders of giants and so see further", he was not being modest. He was saying that Leibniz didn't and couldn't. While I think Newton was not only wrong, but thoroughly nasty in a Christian kind of way, I suggest that "intellectual property" is what those who have "stolen" the ideas - and sometimes businesses - of their predecessors, upon whose shoulders they stand, have "invented" to replace the "capacity to innovate" which they lack.
When we begin to examine the usually unconsidered costs of this system, it is hopefully quite easy to see why almost any alternative is preferable.
Kind Regards
Hermit
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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David Lucifer
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Re:'Second Life' faces threat to its virtual economy
« Reply #3 on: 2006-11-22 17:07:20 » |
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I agree that IP is DOA. The question then becomes whether content creators deserve an ROI and if so, how? Hermit, I recall that some of our discussions on this topic fall under an NDA so I'll let you lead.
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David Lucifer
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Re:'Second Life' faces threat to its virtual economy
« Reply #4 on: 2006-11-22 17:09:01 » |
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source: BusinessWeek
The Dark Side of Second Life
Software that lets residents copy others' possessions is the latest reminder that this virtual world may need tougher law enforcement
by Catherine Holahan
Concerns ran high among the hundred or so gathered for a community meeting in Second Life, the online virtual world. The group had crowded into town hall to hear Second Life creator Philip Rosedale, known on the inside as "El Presidente," discuss the latest crisis to befall the digital community where members interact, buy and sell goods, and build property worth real money. Potentially many more Second Life residents were listening in though an Internet audio stream.
The fuss? Many wanted to know what Second Life's creators planned to do about a new program, nicknamed CopyBot, that enables users to quickly copy characters, objects, and buildings, potentially eroding the value of people's virtual property. Others wanted to know about viruses with the alleged potential to steal members' identifying information. Still others were worried about the growing menace of mafias and gangs that are forcing members out of public areas. "These groups are very threatening and frustrating to deal with," wrote Eric Erskine in a Nov. 16 post on a Second Life community discussion group. "They took over the SoulMates dance club and ran every AV (avatar) off except mine…permanently ban mobs, gangstas, and mafias!"
It would seem the virtual world is facing a very real-world problem: crime. As more people have joined the global virtual community—it now boasts more than 1 million members—residents are grappling with how to secure property ownership and ensure public well-being. The difficulty of that task was underscored Nov. 19 when a worm attack called "grey goo" forced Second Life to close down for a short time. The worm installed spinning objects in the virtual world that slowed the servers as users tried to interact with them.
Calling for Law and Order
Besides the town hall meeting, concerned Second Lifers staged protests over the CopyBot program (see BusinessWeek.com, 11/15/06, "Real Threat to Virtual Goods in Second Life"). In other cases, some have gone as far as to hold trials. Many are now demanding an official system of law and order. "People are clamoring for a solution, they want a solution now," says Josh Eikenberry, a virtual architect who designs homes and buildings for avatars under the name Lordfly Digeridoo. "But what is the solution?"
Every society struggles with how best to protect property. It's especially tricky in a place such as Second Life, where goods are defined by lines of software code. Many citizens make a real-life living selling goods such as clothes and homes for avatars, as the virtual versions of actual people are known. Their income is in a currency, the Linden, pegged to the dollar and openly traded on the LindeX Exchange (see BusinessWeek.com, 5/1/06, "My Virtual Life").
The currency fluctuated on Nov. 14 as residents worried that the CopyBot program would render their purchased or independently designed property worthless. Since Second Life announced that people who use the CopyBot program would be banned from the virtual world, the currency has returned to roughly normal levels of 270 to 280 Lindens to the U.S. dollar.
Peer Pressure Policing
But residents are still plenty worried. Andrea Miller, a Las Vegas marketing director who co-owns the Panache clothing store in Second Life, says she is concerned about her creations getting ripped off. She closed her store, which handles about 20,000 Linden dollars a day, in protest of what she believes is a lack of sufficient action by Second Life's creators. "You believe your work will be protected," says Miller. "But it's just not. It's disheartening."
Rosedale, who is also chief executive of Second Life owner Linden Lab, has been reluctant to put his company in the position of aggressively policing the virtual world. Second Life has announced that it will remove people who use the CopyBot program to steal others' designs. The firm's roughly 30 developers are also working to better identify the original creators of designs and make this information easily accessible to the public. The hope is that, once people know someone has an illegally copied item, he will be shunned by the community or sued by the original designer, be it in a real-world or Second Life court system, for violating copyright protection laws.
Rosedale says it is not appropriate for Linden Labs to sue copiers itself or get involved in dispute resolution, though many residents would like the company to devote resources to policing the community. Still, Rosedale admits that real-world suits by virtual members might not be enough. "Longer term, Second Life is going to have to develop its own law or its own standards of behavior," Rosedale said during the town meeting. He added that he hopes the community develops "local authorities" to deal with property ownership and copyright issues.
Vigilante Justice
Already, Rosedale says, groups have started up Better Business Bureau-style associations to weed out bad players. Linden Labs may also encourage the publication of blacklists of known copiers.
Yet the notion of grassroots justice in a virtual world raises a host of serious questions: On what authority would they act? What punishments can they mete out? And to whom would they be accountable? For example, if a shopkeeper is erroneously blacklisted, can he or she hold anyone responsible for lost sales? If so, who?
Linden Labs cannot simply block people from using copy programs since it must show the computer the code for images in order for users to see those images in the game and interact with them. Personal information about the players, however, is not shown and is protected by code on Linden's own servers.
Smaller Vendors Fearful
Sibley Verbeck is the CEO of the Electric Sheep Co., a firm that designs experiences in Second Life and other virtual worlds for major companies such as Reuters (RTRSY), Sony (SNE), and Starwood Hotels (HOT) (see BusinessWeek.com, 8/23/06, "Starwood Hotels Explore Second Life First"). Verbeck says issues of property and copyright control are being increasingly discussed as more Second Lifers have begun creating and selling their own content. "It is a rapidly evolving technological platform. There are going to be bumps in the road, and there are segments of the user base that are prone to panic," says Verbeck. "If you watch Second Life for awhile you are going to see a crisis just this big every month."
Corporations are less worried about intellectual property issues in Second Life than some smaller vendors, says Verbeck, because they are fashioning their creations more to promote a brand than to make money off actual sales. Still, they are concerned that the copying software could be used to replicate a logo or item and then alter it in a disparaging way. It could also have an effect if people begin leaving Second Life for fear that their creations will become valueless.
Still, Verbeck says he has faith that the Second Life community will figure out how to handle law enforcement in the virtual land. "A lot of people are becoming aware of the potential for damage, it has gotten a dialogue going, and it's gotten a lot of people interested," he says.
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