Back in 2005, Tony Walsh wrote about SL vs. RL IP noting that It's no secret that Second Life is rampant with intellectual-property infringements--it's just ignored. In May, 2007, Benjamin Duranske wrote Rampant Trademark Infringment in Second Life Costs Millions, Undermines Future Enforcement, noting

The dirtiest little legal secret in Second Life isn’t virtual escorts, illegal gambling, ponzi schemes, or even money laundering — the secret is this: misappropriation of major corporations’ trademarks in Second Life is so ubiquitous, so safe, and so immensely profitable, that it has become a wholly transparent part of Second Life’s bustling commercial landscape.

Yesterday, I heard that a friend who runs a successful business in Second Life received a cease and desist letter from a trademark lawyer representing a firm with a similar name and similar business taking place outside of Second Life.

Those of you, like myself, who know very little about trademark law might want to check out the Chilling Effects Frequently Asked Questions (and Answers) about Trademark.

My friend was pretty adamant that the name of his company is sufficiently different, the location he does business is sufficiently different, and the clients he serves are sufficiently different so that there is no reasonable likelihood of confusion between the two companies. He seems to be rolling up his sleeves for a nasty battle that could be both expensive in the courts and significantly damaging to the reputations of the companies involved.

My experiences with the Avery Doninger civil rights case shapes my thinking on this in two ways. On the one hand, this could be a very important precedent setting case helping establish the boundaries and relationships between virtual worlds and traditional jurisdictions. To what extent do copyrights in one country or another apply in a virtual world that is accessed from just about every country in the world? Is it reasonable to expect people to confuse companies doing business in Second Life with companies that are not in Second Life? What should companies not in Second Life do to establish themselves in Second Life and defend their trademarks there, if people have been operating in Second Life for several months with similar brands? These are interesting and exciting questions for me and I would love a front row seat to see them fought out.

On the other hand, I regularly chide the Region 10 school administration for being narrow sighted and not using Avery’s case for the mutual benefit of everyone involved. It could have been such a great teaching moment, helping equip students for a world where these ambiguities are bound to flourish.

Likewise, I hope that my friend and the company he is tangling with can be creative and find ways to work together to strengthen both their brands and set examples of how businesses in real life and businesses in Second Life can benefit from each other.

Will wisdom prevail? Right now messages are flying back and forth and we will have to wait and see.