Virtual Land dispute could open massive can of worms

Quite a few places have mentioned the lawsuit filed against Linden Lab over the virtual land dispute, Tateru mentions it here for Massively, Hamlet mentions it here on New World Notes and Ren Reynolds has a very good piece here, on Terra Nova.

The actual website detailing the claim is here. This has can of worms written all over it. I'm not a lawyer, Tateru, Hamlet and Ren aren't lawyers either so all of our views are our own opinions, but to me, should this case be successful, we're in for a whole load of trouble.

Let's look at some of the issues, do we own land in Second Life? I've never felt that I owned the land, I've never had the impression that I've owned the land, I've long maintained that it's more like a leasehold agreement. However Linden Lab have thrown around the ownership term, will that come back to bite them?

There also appears to be a complaint regarding the Linden dollar being a real currency, again I've never subscribed to this belief, but this is where we hit serious can of worms territory because if the Linden dollar is deemed a real currency, we have tax issues, we have customer service issues, we have a massive can of worms.

In Europe, when you purchase something over the internet you are protected by distance selling laws, these laws allow you to return an item within seven days for a full refund, imagine that being the case in Second Life, who would want to live in Europe and sell copiable items if consumers could return an item for a full refund within seven days? Items within Second Life would be considered electonic services I would assume, therefore the right to cancel is different from purchasing physical goods, but there would need to be all sorts of user agreements published prior to a consumer using an item, it's a messy scenario to say the least.

Whereas currently in the UK, HMRC do not deem transactions to be made within a virtual world as services for the purposes of VAT, this could all change if the Linden Dollar is deemed as being akin to a real world currency, that would be an almighty headache for Europeans. As I said above, I'd imagine virtual goods would be treated the same as electronic service, Second Life itself fits that category, that's why we in Europe pay VAT for using it. Books are another example, I don't have to pay VAT on a physical book but I do for an ebook, as ebooks are considered an electronic service, not a book.

However it's land and property that this case mostly deals with, complaining that numerous times Linden Lab seemed to indicate that you owned the land, you owned the items, whereas I've long been under the impression we have a licence to use, the new TOS does make this abundantly clear. There would be all sorts of different issues if we owned Second Life items, it's a completely different kettle of fish to having a licence to use.

Whereas Linden Lab currently try and avoid resident to resident disputes, this would be made more difficult were this case to be succesful and we'd also have  more legal issues to face as a whole, this would be an issue for all residents.

Whereas one day there may well be a virtual world with real ownership, real money, and real consumer protection laws, it's not here yet and we're not ready for it. This case has dangerous implications, I hope it crashes and burns.

However, that's not to say I believe Linden Lab should be above the law or allowed to act unethically, if the defendants have been genuinely wronged then they have the right to complain, it's the implications of this case, implications that go way beyond the complaints, that concern me.