UPDATED: Intellectual Property and Copyright Issues in Social VR Spaces/Virtual Worlds

justice-2071539_1920.jpg
Image by AJEL from Pixabay

My recent interview with Ghoster got me thinking about the issue of intellectual property (IP) and copyright regarding avatars in social VR spaces/virtual worlds. VRChat is already infamous for having a multitude of avatars ripped from innumerable video games, TV shows, and movies. High Fidelity has decided to take a page from VRChat’s playbook (and, I assume, try and attract some of that VRChat crowd) by allowing people to set up a few domains where you can select from a wide variety of popular characters, owned by Disney and other companies, as your avatar:

Avatardz in High Fidelity 28 Apr 2018.png

Now, the creator of this particular domain skates around the legality of this by offering these avatars for free; no money is being made from this. A prominent disclaimer sign posted in the Avatardz domain states:

Avatardz in High Fidelity 2 28 Apr 2018.png

So, this user doesn’t advocate “piracy from independent and small artists.” What bothers me about this statement is the unstated implication that piracy from Disney or another large corporation is somehow O.K. (maybe because they can afford to swallow the losses more easily?). Also, they seem to justify this blatant IP appropriation as a sort of fan art, a “fan-operated source for pop culture avatars as a tribute to our pop culture legends”.

(Note: High Fidelity is a distributed open-source platform, allowing users to host named domains on their own servers or on the cloud. This means we should not automatically assume that the Avatardz domain is officially sanctioned or supported by High Fidelity.)

I came away from my interview with Ghoster of VRC Traders a little troubled by the copyright and IP issues involved in selling custom avatars to VRChat users that are wholly or partially based on characters owned by somebody else. I did a little research and came across this recent article on IP issues in virtual worlds, from the website Intellectual Property Watch (a non-profit independent news service), which states:

In the virtual world, people appear through their avatars. If they design the avatars themselves, they could be subject to copyright and trademark lawsuits, Lemley and Volokh said. Fictional characters’ images together with their unusual character traits are protected by copyright, so users who copy enough of the visuals, character traits or both to be copyrighted expression and not simply an idea might be infringing. If the use is non-commercial and the copyright owner isn’t distributing licensed avatars, the use might be fair use, but selling such avatars without rights owner approval would likely not be fair use, they said. It could also amount to a trademark infringement.

Rights holders might choose not to go after individual users or small avatar sellers, but to sue the AR or VR operator for contributory infringement, the paper said. The operator might be immune under the US Digital Millennium Copyright Act, but only until someone sends it a notice-and-takedown request that isn’t quickly acted upon, it said. Established case law sets out the limits of intermediary liability under the DMCA; there’s less clarity about intermediary liability for trademark infringement on the internet but the law is developing, it said.

The Digital Millennium Copyright Act (DMCA) is a process often used (and, in a few cases, abused) by vendors in Second Life and other virtual worlds who claim that someone has stolen their intellectual property. The process is laborious, tedious, and probably could be improved. Many large corporations don’t seem to think that it’s worth their time and money to go after people who are stealing their IP in social VR spaces/virtual worlds. For example, Warner Brothers probably doesn’t care much that dozens of people are selling Superman-themed items on the SL Marketplace, even though they fought (and won) a protracted legal battle to cement their copyright to Superman. They probably are reserving their lawyer firepower for the bigger and more egregious cases of copyright infringement.

I have said before that VRChat may get into serious trouble if people continue to flout the copyright laws so shamelessly, particularly if they are starting to making healthy profits at it, as seems to be the case with the community that has sprung up around VRC Traders. We could be in for some interesting legal cases in the years ahead.

UPDATE 3:34 p.m.: Obligatory link back to the VRChat Events website (because I promised them I would do it if I cross-posted over on their Discord server, and I forgot!): www.vrchatevents.com

Also, Second Life and Sansar blogger Inara Pey made such a great comment on this blogpost that I wanted to add it in full here. She said:

IP infringement and the “it’s OK to flout IP of big companies ‘cos they can afford it” is a source of heated debate in SL. In 2012, I reported on the CBS / Star Trek situation. There’s also been the Universal / Battlestar Galactica situation.

Both of these focused more on props, models, and costumes from said series than avatars, but the attitude towards their IP was the same. It was further coupled with the view that “well, we’re fans and so they should be grateful to us for our support”. However, both attitudes not only falsely justify infringement, they also overlook the importantly equal matter of licensing.

In short, major studios – Marvel, Disney, CBS, Universal, et al, generate millions in revenue by issuing merchandise licenses to manufacturers and commercial concerns. As such – and no matter how large or small the unlicensed market or how small the turn-over / profit made by those actively engaged in selling unlicensed goods – the license owner has a legal obligation to project the licenses they have sold, as well the right to protect their IP.

This was as much behind the Universal / CBS situations vis BSG and Trek as anything else – a point many of those railing at both companies at the time, and citing (in Trek’s case) non-binding “arrangements” which may have been offered by prior rights holders, seemingly failed to grasp.

The idea that offering something “for free” is equally a slippery path. As you point out, it’s only a short step from offering “for free” to then offering items for sale. This has been demonstrated (again) in SL with both the Star Trek and BSG situations.

In both cases, Universal and CBS backed away from legal action on the understanding that virtual goods relating to their IP investment in both shows would not be made with the intent to sell for profit. As a perusal of the SL Marketplace will demonstrate, neither agreement has been adhered to by virtual content creators. Ergo, there is still a potential ticking bomb on this subject in SL, should the legal departments of either studio swivel back towards virtual environments and virtual “goods” … which the slow rise of VR might actually encourage.

Also, there seems to be a broader view that because specific understandings were reached by some (again, I’ll use the CBS / Universal agreements, as those are the two I have direct knowledge of) are somehow a “blanket OK” from all IP holders to allow copies of their IP to be offered for free – which may not actually be the case. Again, that’s actually down to the individual studios to decide; just because X has gone that route, doesn’t mean Y will – or is obliged to even consider it.

Just as a point of reference, my own (slightly long-in-the-tooth) articles on this subject can be found at:

https://modemworld.me/2012/11/02/of-copyright-ip-and-product-licensing/ (Star Trek)

https://modemworld.me/2010/11/29/bsg-universal-dmca/ (Universal / BSG)

https://modemworld.me/2011/02/08/bsg-limited-roleplay/ Universal / BSG)

FreeWee Ling also had a great comment when I cross-posted this blogpost to Drax’s 114 Harvest community on Facebook:

People have been screaming about IP issues in SL since the beginning. Several years ago there was a series of open talks in SL featuring attorneys with expertise in IP who examined the LL TOS. Not much was resolved other than a statement from LL that their “intention” was not to steel user content, but that they needed certain rights in order to allow people to use the Marketplace and just to generally present the content on the platform. A lot of artists were not satisfied and you’ll find many of them still working in OpenSim grids where they have more control.

Disney and others are vehement about controlling how and where and by whom their IP is presented. There was a Disney themed fan sim in SL some years ago that, if memory serves, got notice to remove their content of face legal consequences. The Frank Lloyd Wright Foundation closed down a sim full of great Wright model homes in SL, even after the owners contacted them and at least got tacit permission to do it. (I.e., I think they had been told the foundation wouldn’t endorse it, but also wouldn’t stop it.)

Ultimately, I’m pretty sure any copy of virtual content without permission is theft. Whether there is money involved or not.

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10 thoughts on “UPDATED: Intellectual Property and Copyright Issues in Social VR Spaces/Virtual Worlds”

  1. IP infringement and the “it’s OK to flout IP of big companies ‘cos they can afford it” is a source of heated debate in SL. In 2012, I reported on the CBS / Star Trek situation. There’s also been the Universal / Battlestar Galactica situation.

    Both of these focused more on props, models, and costumes from said series than avatars, but the attitude towards their IP was the same. It was further coupled with the view that “well, we’re fans and so they should be grateful to us for our support”. However, both attitudes not only falsely justify infringement, they also overlook the importantly equal matter of licensing.

    In short, major studios – Marvel, Disney, CBS, Universal, et al, generate millions in revenue by issuing merchandise licenses to manufacturers and commercial concerns. As such – and no matter how large or small the unlicensed market or how small the turn-over / profit made by those actively engaged in selling unlicensed goods – the license owner has a legal obligation to project the licenses they have sold, as well the right to protect their IP.

    This was as much behind the Universal / CBS situations vis BSG and Trek as anything else – a point many of those railing at both companies at the time, and citing (in Trek’s case) non-binding “arrangements” which may have been offered by prior rights holders, seemingly failed to grasp.

    The idea that offering something “for free” is equally a slippery path. As you point out, it’s only a short step from offering “for free” to then offering items for sale. This has been demonstrated (again) in SL with both the Star Trek and BSG situations.

    In both cases, Universal and CBS backed away from legal action on the understanding that virtual goods relating to their IP investment in both shows would not be made with the intent to sell for profit. As a perusal of the SL Marketplace will demonstrate, neither agreement has been adhered to by virtual content creators. Ergo, there is still a potential ticking bomb on this subject in SL, should the legal departments of either studio swivel back towards virtual environments and virtual “goods” … which the slow rise of VR might actually encourage.

    Also, there seems to be a broader view that because specific understandings were reached by some (again, I’ll use the CBS / Universal agreements, as those are the two I have direct knowledge of) are somehow a “blanket OK” from all IP holders to allow copies of their IP to be offered for free – which may not actually be the case. Again, that’s actually down to the individual studios to decide; just because X has gone that route, doesn’t mean Y will – or is obliged to even consider it.

    Just as a point of reference, my own (slightly long-in-the-tooth) articles on this subject can be found at:

    https://modemworld.me/2012/11/02/of-copyright-ip-and-product-licensing/ (Star Trek)

    https://modemworld.me/2010/11/29/bsg-universal-dmca/ (Universal / BSG)

    https://modemworld.me/2011/02/08/bsg-limited-roleplay/ Universal / BSG)

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  2. One distinguishment we have to remember with High Fidelity is that the model files them selves are not hosted by High Fidelity inc. It is an independent user who is hosting them on github with the domain server on what ever platform aws/digital ocean.

    So Unlike VRChat or Sansar or Second Life, there would be interesting legal cases because High Fidelity inc can say they are not hosting the models, but instead point to where ever the models are being hosted. Only placenames, and items in the Marketplace are subject to High Fidelity control, and that they do vet that nothing belonging to someone else ip can be placed there, as they can be sold there.

    This means that companies going after High Fidelity would only get the domain placename turned off but the content would still be available until they actually go for where ever the models are being hosted (in avatardz case github). The server would still be up and connectable via IP address just a DNS domain: so instead, the company defending would need to go against the server hosts them selves, not High Fidelity.

    Granted, some models are probably ripped, and the identity of the user is in question but that’s hard to say: What makes this interesting is, if VR platforms can be chased down for models created (not ripped) by someone, based on an existing licenses, what about platforms where users create fan art of these subjects, such as on Deviant Art or other user generated contents, some even for commission and for profit. It feels like a slope

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  3. Hi Ryan! Another fantastic contribution from you, thank you for everything you are doing. I also suggest you check out Anyland and explore how they are dealing with such issues in their community. Let me know if you want an intro to anyone over there. We have a lot of folks at our institute (Institute for the Future, http://www.iftf.org) who are spending time there. The community and founders/developers are very welcoming and extremely thoughtful.

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