Eros LLC of Florida, which produces the popular (or so I am told, anyway) SexGen line took Linden Lab to federal court this week, on a claim that the Second Life operator refuses to take action against users who custom-rig their own sex machines (more or less, they’re code that facilitate boinking animations) and then slap the SexGen brand on ‘em.

Sounds funny, but microtransactions are no joke. Some $US600 million in in-world sales are expected this year, with Linden Lab taking a cut of that. It gets a cut of anything that changes hands for virtual buxx, black market goods or no. And on top of this, Eros does maintain an in-world store, so the virtual ripoff is very real to them.

Eros successfully sued some black marketeers two years ago; this suit represents an escalation. They seek class action status for other merchants who are getting bootleged. Their allegations will also challenge the Digital Millennium Copyright Act, which protects Web sites from legal action if they’re responsive to rights holders’ takedown notices. All of this because people are selling counterfeit f–k coffins.

Linden Lab Targeted in Second Life Sex-Code Lawsuit [Wired]

See, instead of spending millions of dollars on recruitment advertising no one will actually see, the IRS instead spent thousands of dollars to create an IRS Careers Island in Second Life which no one will actually see. That’s much cheaper! I actually visited the island as soon as I heard about this, and one can definitely see how they saved millions. It’s a bunch of booths with clickable information signs, and a couple of lounges with some very pretty penguin clip art that must have cost them a small fortune to secure.

Frank Stipe, Virtual Worlds & Social Networking Project Manager for the IRS, explains why the IRS needs a Virtual Worlds & Social Networking Project Manager.

In the physical world, we could spend hundreds of thousands, if not millions, on sponsoring a race car that displays our brand in a field of thirty or more other cars. In the SL virtual world, we have spent a few thousand dollars to build complete entertainment and communications venue that includes a race course. IRS branding throughout the venue not only displays our messaging, but it also instantly dispenses marketing collateral and links to our Careers web site.

Wait, there’s an IRS race course in Second Life? Excuse me a moment.

Wheeeeee! The IRS rocks!

The service is currently working with universities and other academic institutions to raise awareness of its Second Life presence.

IRS Saves Millions by Using Second Life to Market Its Employment Opportunities [College Recruiter]

Second Skin provides a rather balanced look at the relationships formed via online games, from friendships to romances to relationships that go even deeper still. It’s funny, disturbing, and disturbingly funny at the same time. I particularly enjoyed the slice-of-life moments they included, such as when the World of Warcraft players ran out of toilet paper. Don’t laugh. It happens.

I’d highly recommend catching it in the theatre if you can, but if you can’t, ad-supported free video site Hulu has you covered.

Kotaku AU Note: Hulu? Bah!

Even if you weren’t one of the chosen few, you can still get a lot from watching what went on at the panel. I pulled some quotes I thought were interesting, but really, there’s much more wisdom and points for discussion to be had from the total two hour run of the panel.

In particular, I call your attention to the Part 6 and 7 clips where the panelists talk about the importance of having gay characters in games and respond to that effed up game, Watch Out Behind You, Hunter!

VIDEO: GLAAD’s Panel on Homophobia & Virtual Communities [GLAAD Blog]

Taser was looking $US75,000 from Linden Lab because they allowed virtual Tasers to be sold in the game they run. Turns out they very swiftly dismissed their own complaint because Linden never replied to the original filing. Its voluntary dismissal was filed in May but was just now reported – not like we expected them to issue a press release on it.

The case was withdrawn “without prejudice,” which doesn’t mean it’s an equal-opportunity employer – it means the complaint can be brought up again if Taser so chooses. Here’s some free legal advice: don’t. Just focus on making your weapons so our cops can jolt grandma, OK?

Taser Drops Linden Lab Lawsuit [Virtual Worlds via GamePolitics]

Cole used commenters’ responses to his post, The Impact of Homophobia in Virtual Communities, to drive discussion among panelists Caryl Shaw (Senior Producer at EA’s Maxis), Dan Hewitt (Senior Director of Communications & Industry Affairs for the Entertainment Software Association), Stephen Toulouse (Program Manager for Policy and Enforcement, Xbox Live), Cyn Skyberg (Vice President of Customer Relations at Linden Lab) and Flynn DeMarco (founder of GayGamer.net). Read on to see if you made the cut.

First up was McLuvin’s comment about flaunting sexuality. Next was GameBuddy, continuing the discussion. Then came bLaZINcOdE3’s comment about the “gay mafia” forcing companies to hold “token meetings.” OrigamiNinja’s comment about how harassment makes the game less fun made it in, as did Nnooo’s about whether or not gamers can expect Mario to save a prince instead of a princess someday. User saulpimpson’s comment steered talk toward developers refusing to make games based on gay or gay bashing content. Then DanoruX’s tongue-in-cheek “this is so gay,” statement got a discussion going on “innocent” slurs. Phydeaux’s comment on “play to file” introduced the topic of abuse reporting in online communities. Lastly, ach77 made it in as part of a general statement that gay gamers just want to have fun like every other gamer – and to introduce the founder of gay-centric World of Warcraft guild, The Spreading Taint who happened to be in the audience.

Aside from being shamelessly proud of Kotaku commenters, I was interested to see how Kotaku alumnus DeMarco reacted to comments from his ex-audience. He did almost half the talking at the panel and demonstrated the most gaming expertise. Whenever an issue was raised, DeMarco could name at least two games in response whereas everyone else just fell back on their own games (like Shaw’s Spore and Skyberg’s Second Life) or defaulted to Halo.

The other big talker was Microsoft’s Toulouse, but I think he was being targeted. At the beginning of the panel, Cole presented a video that outlined the issues facing gays and lesbians in online gaming. All of their in-game examples seemed to be from Xbox Live – most specifically, Halo multiplayer. To his credit, Toulouse responded to almost every issue raised by Kotaku comments and admitted that Xbox Live hasn’t got it right quite yet – but they’re committed to making their community a safe place to game for everybody.

The quietest panelist was Second Life’s Skyberg. It takes all types to make a virtual world like Second Life and I know they’ve had issues that prompted developer Linden Lab to create an adults-only space. Skyberg did pipe up at one or two times to talk about anonymity making it easy for people to use gay slurs in online communities – and made an excellent point that as people invest in their online identities more, this anonymity goes away.

The only dull part of the panel was the Q&A. I’m not sure if it’s because the two hour time limit was almost up and everybody wanted lunch, or because the audience was the choir being preached to – but nobody asked anything that hadn’t been addressed. One lady asked if the “dehumanising” aspect of violent games like Halo brought about gay bashing and DeMarco responded that the problem wasn’t that the game that engendered homophobia, it was that the audience that the game tended to attract was immature and ignorant of gay issues.

In sum, this is what I took away from the panel: Don’t hate the game, hate the player. Or better yet, don’t hate anybody.

Pure West’s Second Skin looks the lives of gamers and virtual world residents as they live out their lives playing World of Warcraft, Everquest, and of course, Second Life. It touches on the topics of addiction, online romance, and the community feeling and sense of camaraderie that can be fostered by a group of people essentially only connected to each other through the internet.

Since first reading about the project back in 2006, I’ve pretty much lived through most of this documentary, having put my Everquest addiction behind me well before that. Back then I thought it would be interesting to watch in order to see how those people live. Now I’m going to pick it up to see if I spot anyone I know.

Along with the DVD release on August 25th, Second Skin will also see a limited theatrical run, so check your local papers, just in case. Check out a sneak peek at the first five minutes of Second Skin below.

Today kicks off Stanford University’s Play Machinima Law Conference with panels of machinima artists, copyright lawyers and legal representatives from Blizzard, EA and Microsoft.

Machinima is one of those hazy areas of artistic expression not quite covered by copyright law and not quite insignificant given how many people have jumped on the bandwagon. Kotaku first covered the topic back when the New York Times Magazine did a piece called “Xbox Auteurs” that loosely touched on successful ventures like Red vs. Blue and Strangerhood. Since then, we’ve seen everything from filmmakers to Family Guy writers getting in on the machinima scene.

Stanford’s gathering of legal people, law professors, game studies students and machinima artists aims to address some of the grey areas in this emerging art form. It’s also an opportunity to screen some bitchin’ machinima. And, for me, it’s a chance to earn some extra credit in my Game Studies: Issues in Design, Technology, and Player Creativity class since I’m ditching next week to make the Namco Bandai Gamers Day event.

Here’s what I learned:

Machinima is more than just Red vs. Blue
For the longest time, I thought “machinima” was limited to fan made videos people posted to YouTube. I didn’t realise that the word also includes serious documentaries like HBO’s My Second Life: The video diaries of Molotov Alta and licensed advertisements like the World of Warcraft SlimJim commercial. Pretty much any endeavor that uses in-game content to create original narratives or otherwise creative works counts as machinima – even if it’s dumb music videos.

It’s Not Always Fair Use
Parody law in the United States gets kicked around a lot, especially when something offensive but funny hits the Internet. However, because most games require users to sign terms of use agreements, parody law doesn’t protect Red vs. Blue from Microsoft (that, and Red vs. Blue is satire, not parody). There are some exceptions to this, though, depending on the developer. For example, Second Life “owner” Linden Lab didn’t feel the need to sign a release for the HBO documentary because to them, their game should replicate real life conditions for documentary filmmaking. You wouldn’t have the mayor of New York City sign a release before filming the streets of New York, right?

Blizzard and Microsoft Actually Aren’t Opposed To Machinima
You’d think the two biggest playgrounds for machinima artists would be annoyed at all these artists cashing in on their product; but actually, both publishers have reached out to machinima communities. They’ve set up (and revised) guidelines for machinima creators to allow would-be artists some control over their creations and some freedom to distribute them. Here’s Microsoft’s and here’s Blizzard’s. Compare and contrast.

The Big Question: Can You Make Money On It?
One of the main torts of copyright law and the defining issue for machinima to address (at least in this conference) is whether or not these productions are for profit. Both agreements from Microsoft and Sony draw a definite distinction between noncommercial and commercial use of their games to create machinima.

This is kind of a problem for machinima artists because many of them would certainly like to profit from their hard work (and some of them definitely do). There are ways to do it without provoking a lawyer-storm from publishers, such as securing licensing agreements or even just asking permission to submit a machinima film to a contest that’s not affiliated with the game before actually doing it. But many machinima artists are under the impression that if they just stay off the radar, they can get away with selling t-shirts, DVDs and other items that tie into their work and (sort of) trade on the game’s popularity. Or, they think, they can play the Fair Use card if they satisfy at least one aspect of copyright law and escape litigation.

The lawyers here at the conference today say that this is not the way to go. Fair Use is ambiguous even outside video game land – and even if the “actual damages” threat doesn’t sound so scary, it is still a serious legal problem, especially if you’re just a gamer who wanted to make a fan video of Master Chief rocking out to Jesse McCartney’s “Right Where You Want Me.” The legal rights for machinima haven’t been spelled out yet, even with the few case laws on the books for Second Life – so do not assume anything, or at least try not to act surprised when the lawyers call you up.

The Stanford Machinima Law conference is going on now at Stanford University. You can check out the agenda here at this website that really seems to hate Firefox. Audio and video of the event will probably be posted at some point, too – but because it’s Stanford, I wouldn’t bet on it happening for another month or so.

Massively got a hold of the complaint and today posted a pretty lengthy breakdown of the charges and their credibility. Highlights include pointing out that the TASERs in the game don’t actually taze people (because you’d have to hijack other users’ avatars to make them appear as though they’re being electrocuted); pointing out that TASER doesn’t seem to understand who to sue to technically be suing “the game;” and examining whether or not the $US75,000 in damages TASER is seeking is even worth a lawsuit instead of a take-down notice.

The big deal in this case, though, is why TASER is suing Linden Lab instead of the content creators. The answer to that, according to the analysis of the official complaint, is because Linden Lab bought XStreet SL a while ago. That means:

…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.

My answer is that TASER would rather sue the guys with money, rather than the actual (penniless) infringers themselves.

Don’t Tase Me, Bro… Second Life Zapped by TASER Lawsuit [GamePolitics via Massively]

The lord high executioners of Frank Herbert’s estate have demanded that all Second Life areas (inhabited by all of 130 people) remove all references to Dune IP. Drat. There goes my 36-inch sandworm cock.

Trident Media Group, responsible for all things Arrakis, Dune, Desert Planet, sent the C&D to Linden Lab, which runs Second Life. Linden turned around and sent it to its SL fremen, harkkonen, et al. They’re complying with the letter of the letter, not its spirit. Says “Vooper Werribee,” leader of the Dune roleplayers:

We’ve made all the compliance changes we intend to now. Basically we’ve removed the words ‘Dune’, Bene Gesserit, Atreides, etc. from as many object names and descriptions as we can find. But we still intend to keep the place as a ‘generic’ sci-fi desert planet with spice mining. And still intend to roleplay here.

In something of a Streisand effect, the publicity has created more interest in the Dune environs, which had counted 130 members, only 20 percent of which were currently active. Star Trek SLers have expressed interest in using them for “First Contact” scenarios. And, horror of horrors:

“Some Star Wars players are interested in using the place as a ’spice mining’ base. As Star Wars has ’spice’.”

I wouldn’t necessarily take Trident Media’s banhammer to mean that Herbert’s estate has imminent plans for a Dune-licensed MMO. It’s more like brand protection, and of course, protection of the potential value of licensing one down the road.

Enforcers of Dune: Frank Herbert Estate Targets Dune Roleplayers In Second Life [New World Notes via Rock, Paper, Shotgun]