Taser's suit against owner of Second Life dismissed

United States of America
Taser International Inc's suit against Linden Research for use of the TASER mark on Second Life was voluntarily dismissed on May 5 2009.
Virtual worlds are interactive, graphics-rich internet environments, which are often mistakenly viewed as mere video games despite their growing development and use by well-reputed entities as educational, collaborative and commercial tools. End users, represented by adopted characters called 'avatars', can purchase complex, digitally coded versions of real objects. These non-fungible virtual goods may be donned, viewed from all angles, and can in some cases function similarly to the original, tangible version of the goods. Although there is some commercial production, most virtual goods are created by individuals, often from photographs of the original items, and sold very inexpensively. Many well-known branded goods are being reproduced as virtual goods without the permission of their rightful owners. However, the limited profits from sales of these reproductions and the fact that the developers are usually individuals may explain why few have pursued efforts to enforce their IP rights in the space.
With its recent acquisition of the website 'xstreetsl.com', which serves as a marketplace for these virtual goods, Linden, the owner of Second Life, became the target of a suit in the US District Court for the District of Arizona based allegedly on its sale of virtual versions of the Taser stun gun. Taser’s complaint alleged, among other things, trademark infringement, dilution by blurring, dilution by tarnishment and design patent infringement, directly by Linden and its associates.
Taser did not include a count of copyright infringement, perhaps in order to avoid raising the issue of whether the Digital Millennium Copyright Act (DMCA) applied. The terms of service of 'xstreetsl.com' and Second Life both incorporate provisions to enable copyright owners to notify Linden in order to have any unauthorized uses by third parties taken down. Such provisions generally provide a safe harbour from copyright infringement claims under the DMCA by characterizing the website owner as an internet service provider, rather than a publisher. Extension of the DMCA defences to trademark claims may be available only by analogy. Nevertheless, the allegations of direct infringement by Linden - rather than the third parties responsible for posting the virtual stun gun listings - suggested that Taser considered Linden to be a publisher, and not a mere service provider.
Among its principal claims, Taser alleged that Linden infringed its registered federal trademarks TASER and ADVANCED TASER. These registrations do not cover "software" in Class 9 of the Nice Classification. In order to show trademark infringement, Taser would likely have had to show that the virtual stun guns related to the original, tangible goods. The complaint merely alleged that the virtual goods were related, without addressing how that might be so. Moreover, Taser did not appear to have preceded its complaint with a demand letter, and relied entirely on constructive notice arising from its use of the ® symbol on its goods.
To the extent that virtual goods are considered to be mere software, they might not have appeared related to Taser's weaponry. However, in practice, virtual goods are identified by consumers based on their appearance and function. Reference to goods generically as “virtual stun guns” suggests that they must be related to real stun guns in the minds of consumers. Their analogous function to deliver a simulated electric shock to an avatar victim also suggests that consumers would associate them with the real world weapons. If the goods are indeed related, the sufficiency of Taser’s purported constructive notice may have been questionable since there may not have been any notice of exclusive rights to use the TASER mark for software goods, despite numerous seemingly authorized uses of the mark in third-party videogames.
In addition to trademark infringement, Taser alleged that its marks are well known and that Linden had diluted them. Taser's dilution by tarnishment claim rested primarily on an alleged connection between use of its marks and the sales of virtual pornographic content. However, with some exception, the complaint and its accompanying exhibits appeared to show only that both categories of goods were available on the same site. Although terms such as 'sex' and 'crack' were used as keywords to identify the virtual stun guns on 'xstreetsl.com', and some other virtual goods to which the TASER mark was affixed may have been suggestive of sexual behaviours, it was unclear that a purchaser of a virtual stun gun was directly exposed to adult content against its will. On the other hand, the use of the TASER mark on virtual versions of goods other than those offered by Taser might have supported the claim to dilution by blurring if the mark is well known. 
A hearing on Taser’s motion for a temporary restraining order was scheduled for May 6 2009, but the case was voluntarily dismissed on May 5 2009 as Linden had already taken down the allegedly infringing uses. As a result, many of the IP issues surrounding infringement in virtual worlds remain open.
Matthew D Asbell, Ladas & Parry LLP, New York, with the assistance of Prashant Jha

Unlock unlimited access to all WTR content