Bragg v. Linden Research, Inc.

487 F.Supp.2d 593 (2007)

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Nature of the Case

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Facts

Ds operate a multiplayer role-playing game set in the virtual world known as 'Second Life.' Participants create avatars to represent themselves, and Second Life is populated by hundreds of thousands of avatars, whose interactions with one another are limited only by the human imagination. Owning property in and having access to this virtual world is important to P in this case. In November 2003, D announced that it would recognize participants' full intellectual property protection for the digital content they created or otherwise owned in Second Life. Avatars may now buy, own, and sell virtual goods ranging 'from cars to homes to slot machines.' Avatars may purchase 'virtual land,' make improvements to that land, exclude other avatars from entering onto the land, rent the land, or sell the land to other avatars for a profit. Before a person is permitted to participate in Second Life, she must accept the Terms of Service of Second Life by clicking a button indicating acceptance of the TOS. P clicked the 'accept' button before accessing Second Life. Included in the TOS are a California choice of law provision, an arbitration provision, and forum selection clause. On the fourteenth line of the thirteenth paragraph under the heading 'GENERAL PROVISIONS,' and following provisions regarding the applicability of export and import laws to Second Life, the following language appears: Any dispute or claim arising out of or in connection with this Agreement or the performance, breach or termination thereof, shall be finally settled by binding arbitration in San Francisco, California under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with said rules. . . . Notwithstanding the foregoing, either party may apply to any court of competent jurisdiction for injunctive relief or enforcement of this arbitration provision without breach of this arbitration provision. In 2005, P signed up and paid D to participate in Second Life. P claims that he was induced into 'investing' in virtual land by representations made by Ds in press releases, interviews, and through the Second Life website. P paid D real money as 'tax' on his land. P purchased numerous parcels of land in his Second Life and also had digitally crafted 'fireworks' that he was able to sell to other avatars for a profit. P also acquired other virtual items from other avatars. P acquired a parcel named 'Taessot' for $300. D claimed that the land was improperly purchased through an 'exploit.' D took Taessot away and froze P's account confiscating all of the virtual property and currency that he maintained on his account with Second Life. P sued Ds in Pennsylvania. Ds removed the case and moved to compel arbitration. Rosedale (D) moves to dismiss all claims asserted against him for lack of personal jurisdiction.