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Taser International vs Linden Lab: Crack Den crackdown

Tateru Nino
Tateru Nino|April 21, 2009 11:00 AM

Taser International Inc have filed a lawsuit against Linden Lab (and others, including some present and some departed) staff. We got a hold of the April 17 complaint yesterday, and have been going through it since then. We've got a summary of the complaint and issues for you, but we won't be linking to the complaint due to the presence of what may be considered to be pornographic images in Exhibit 2. The "crack den" reference in the headline is a recurring phrase in the legal complaint. You'll see why.

If you want the one-sentence summary, Taser seem to have failed to do their homework and basic research, but their case doesn't seem to be entirely without merit either.

The claims

The complaint claims: Trademark infringement, unfair competition, violation of the Lanham act (that's trademarks again), false designation and trade dress infringement (trademarks and copying of styles and designs), Arizona common law trademark/trade name infringement (trademarks again), design patent infringement, RICO violations (that's the Racketeer Influenced and Corrupt Organizations Act, originally set out to prosecute the Mafia and organized crime), and "the inducement of all claims above".

The defendants

The defendants are listed as: Linden Research Inc (otherwise known to us as Linden Lab), Linden Lab (eh?), Philip Rosedale (founder and chairman of Linden Lab), Mark Kingdon (Lab CEO), Frank Ambrose (SVP Global Technology), Sandy Gould (Vice-President of Human Resources), Tom Hale (Chief Product Officer), Brian Michon (Vice-President Core Technologies), Joe Miller (Vice-President Platform and Technology), Marty Roberts (General Counsel), Cyn Skyberg (Vice-President Customer Relations), Ginsu Yoon (That's Gene Yoon, departing Vice-President Corporate Development), John Zdanowski (former Linden Lab Chief Financial Officer), and all related individuals.

But wait, there's more.

Also named as defendants are Virtuatrade LLC, Xstreet SL and Jay Geeseman. Virtuatrade LLC is the former owner of Xstreet SL whose status is a bit uncertain since the Lab's acquisition of it. Geeseman, the owner of Virtuatrade LLC is presently employed as "Technical Lead, eCommerce" at Linden Lab.

That's quite a list of claims and defendants.

So, what's this actually all about?

Basically a few people in Second Life make some digital replicas of Taser's products that do not have the same function as Taser's products, or props that have the Taser name, but do not have any functions or resemblance similar to Taser products. [EDIT: There are two kinds of taser-themed items. The first kind look like Taser International's product line, and may have the Taser trademark name, but do not and cannot have similar functions. The second kind just carry the Taser trademark name, but do not have any similar functions and do not visibly resemble Taser International's products]

Some of these content creators also manufacture/sell material that Taser describes as pornographic, or offensive, and they feel that their brand is being linked with these prurient materials, and that they're losing business and sales to Linden Lab.

Wait... what? What's Linden Lab got to do with this case anyway? Shouldn't this be aimed at the content creators themselves?

Well, normally nothing. Normally you'd just have the content creators named as defendants. Taser's complaint doesn't show much (if any) understanding of what's going on, but it does seem as if they have inadvertently hit a nail on the head.

Since Linden Lab's acquisition of Xstreet SL, the Lab is no longer mediating transactions between buyers and sellers. Xstreet SL arguably retails on behalf of sellers, and takes a commission. It's going to be difficult to argue that the Lab/Xstreet SL is not selling these items.

That potentially places the Lab in the liability loop.

Isn't that kind of splitting hairs?

Yes, but that's the kind of hair-splitting that defines a modern, complex legal system.

So what's this "crack den" thing about?

One of the businesses that makes Taser replicas in Second Life (The Newman Group) does a heavy trade in an urban role-play setting called The Crack Den. More than 50 instances of various variations of its name are littered throughout the complaint. The complaint does not appear to draw any distinction between the users and Linden Lab insofar as liability goes, due to the sales on Xstreet SL.

In order to demonstrate the negative associations to Taser's brand, a number of prurient images are provided in Exhibit 2 showing locations in which Taser alleges that costume replicas of its products are being sold. So, we won't be showing you the actual source.

At the time of writing, you can see many of the allegedly infringing products on the Xstreet SL marketplace. Some of them have been recently updated to indicate that they are not official Taser products.

The complaint

The complaint has been filed with the Arizona District Federal Court, and the Judge is Roslyn O Silver (nominated by US President Clinton in 1994).

The complaint is seeking significant damages (in excess of US$75,000), asserting that everyone named has willfully, knowingly and with foreknowledge deliberately violated Taser's rights. So, treble damages for patent infringement, cost of damages, all profits earned from sales, fines for unfair competition, fines for misappropriation, legal fees, plus anything else "the court deems proper and necessary" (a bit of legal boilerplate).

If successful, then under Arizona Revised Statutes Taser can be granted US$500 per infringing copy (or manufacturer's retail price, whichever is greater). Considering that the most expensive replica being sold in Second Life is of the order of US$2, it seems as if the US$500 figure will be the one used.

Unfortunately the complaint appears to have had chunks of it copied and pasted from other complaints -- either that or the people who prepared the document have little idea about what and who they're filing suit against (or perhaps both).

There are a number of interesting gaps. Linden Research Inc trades as Linden Lab, but the complaint names them separately. It describes Linden Research Inc as "an entity of unknown origin", whereas six seconds with Google would tell you that they're a corporation registered in Delaware (as is Taser International Inc, coincidentally).

Trademarks and designs

Certainly some of the incorporeal objects being sold in-world bear Taser's trademarks, product names or product descriptions. None of the devices are firearms, or deliver an electric current, or immobilize a victim, so far as we can determine (without a victim's cooperation, no harm can come to their avatars in Second Life), so most of these incorporeal devices are sparkly novelty costume props.

Taser International Inc, however, has trademarks for the Taser name for everything from belt-buckles to underwear and novelty products. It is unlikely that the Taser name can be applied to anything without infringing on at least one registered trademark. The props being sold in Second Life would certainly fit into the novelty products category.

We're kind of wondering why a DMCA notice wasn't sufficient in this case. We can't find any mention in the 102 page complaint and exhibits that Taser International Inc sought to file one.

Trivia note: TASER is an acronym named for a device in fiction: Thomas A. Swift's Electric Rifle (TASER), from the popular series of novels written by house pseudonym Victor Appleton.

Case merits

As absurd as it might seem, Taser's case appears to have some merit to it, despite what seems to be a sloppy complaint.

Linden Lab's acquisition of Xstreet SL seems to have opened it up to direct liability, as it seems difficult to argue that it is now merely a mediator of transactions.

Trademarks and design patents, almost certainly have been violated, though the damages to Taser International Inc seem to verge on the insignificant, and the matter could have been cleared up quickly with a DMCA notice.

Ultimately, we expect the parties to settle out-of-court, rather than fight this through to the end.

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