InsideCounsel » March 2008
Virtual Knockoffs
Companies cope with counterfeit goods for sale in Second Life.
Herman Miller Inc. has been facing a real problem in a virtual world. The Zeeland, Mich.-based company is known throughout the globe as a high-end maker of distinctively stylish and ergonomic furniture. For the past few years, however, unauthorized copies of its furniture began to appear—in Second Life.
Second Life is a 3-D virtual online world whose content is created by its users. Through their personalized avatars, more than 11 million members of Second Life interact with each other. They buy and sell items and build real-estate developments; they do just about everything that people do in real life—and more.
There are even online currency exchanges that allow “in-world” money to be converted into U.S. dollars. Thus, individuals who make money in Second Life can see the results in their real-world income. Some entrepreneurs in Second Life were making money by creating and selling unauthorized copies of Herman Miller’s furniture. These copies were often shoddy; they didn’t look like the creations of a top-flight business. They definitely weren’t something with which Herman Miller wanted to be associated. Other well-known brands have been facing similar problems in Second Life. It’s easy to go in-world and buy counterfeit Rolex watches, Gucci handbags, Ferrari cars and Apple iPods, which are often pre-loaded with unauthorized copies of songs. Unauthorized use of companies’ names, logos and designs is rampant in this virtual world. Stopping these virtual counterfeits is no simple task. “Enforcing your rights is a tricky thing in virtual worlds,” says Alan Sutin, an IP attorney in Greenberg Traurig’s New York office. However, many businesses see virtual worlds as great marketing opportunities. The “population” of Second Life and other virtual worlds has been exploding, and the residents’ demographics make them prime targets for many marketing pitches. “Those people tend to be ... a captive audience, so this is a good marketing opportunity,” says Alan Behr, an IP attorney in Alston & Bird’s New York office. More than 100 major brands are legitimately marketed in Second Life, including Nike, Toyota and eBay. And the numbers are expected to grow.
Brand Impact
Why should companies care what happens in virtual worlds? After all, counterfeit virtual goods don’t compete with real-world goods. And the revenue from virtual sales is too tiny to interest good-size corporations. “If you earn $50 a week [from selling virtual items], you’re doing very well,” says Douglas Wolf, a trademark attorney in Boston’s Wolf, Greenfield & Sacks.
