Virtual infringement

The Trademark Blog discusses the role of trademarks in the virtual reality game Second Life. (Other takes; see also Counterfeit Chic on Sims Oscar knockoffs.) People buy and sell “Adidas” and other branded apparel for their virtual avatars using currency that has real cash value, but it’s not authorized by the trademark owner. Now American Apparel is opening up a store in Second Life, and trademark battles may not be far behind.

We can compare the issues here to the Marvel lawsuit against City of Heroes: If individual game players create costumes that resemble trademark-protected Marvel heroes, they haven’t engaged in use in commerce. If individuals in Second Life deck themselves up in virtual Versace, neither have they. But if they sell Versace to other avatars, there is a use in commerce and then other trademark considerations come into play.

Random thoughts:

There are few quality control issues: Your virtual Ford will work as long as the rules of the game allow it. There is no shoddy counterfeiting, only shiny counterfeiting.

The discussion in the links seems to assume the goods are the same, but are the goods really all that similar? A picture of a shirt isn’t a shirt. It may even be art, and protected by the First Amendment, like Warhol’s pictures of Campbell’s Soup cans – even if it’s art sold to make the artist wealthy. In a game, everything you do is expressive -- even killing another character -- and thus may be entitled to full First Amendment protection. The things you say in the game to sell your virtual clothing may be commercial speech, but that doesn't mean that the clothing itself is commercial speech. Even if art isn’t entitled to more toleration of likely confusion than ordinary commerce, a hotly contested proposition in the courts, the status of an image as art may be a relevant factor in assessing likely confusion. If the Second Life avatar wearing an Adidas shirt is shown as a still picture (as it is in one of the links above), we wouldn’t necessarily presume affiliation or sponsorship.

What are reasonable consumers likely to think? The usual confusion-based justification for barring sales of goods the buyer understands to be counterfeit, unauthorized, or otherwise unaffiliated with the trademark owner is the risk of secondary confusion. People on the street will see the goods bearing an imitation mark and, lacking the sophistication and information available to the purchaser, think that the goods are authorized. Especially if the goods are shoddy, this can damage the trademark owner’s goodwill the same way as regular infringement.

This rationale has always been a bit of a stretch, and may be at its snapping point with Second Life, both because of the quality question and because, if unauthorized use of trademarks is the norm in the virtual world, there’s no reason to expect secondary confusion any more than primary confusion. Trademark dilution wasn’t made for this situation. But it might be the best fit (and indeed, might be a better application of dilution than most).

None of this is to say that I expect trademark protection not to show up in Second Life. But that’s a choice, not an inevitable requirement of trademark law.