Virtual Goods Retailers Sue for Trademark Infringement in Second Life

SAN FRANCISCO —Eros, a merchant of adult products, and Shannon Grei, who sells clothes for avatars in the virtual world, have filed a class-action compliant against Second Life owner Linden Lab for violation the intellectual property rights.

The complaint, filed yesterday at the U.S. District Court in San Francisco, alleges that Linden Lab violates the rights of proprietors of virtual content within Second Life directly and secondarily by providing the tools for infringing, being negligent about its policies and profiting from piracy.

Eros is a seller of erotic items on Second Life, including its SexGen line of products, with a store within Second Life — which Linden Labs charges rent to maintain.

The company Shannon Grei operates, known in Second Life as Munchflower Zaius, sells online “skins” or clothing for avatars in Second Life.

Second Life also profits from the uploading of content — including pirated material — and online marketplace for Second Life good, XstreetSL, according to the suit.

Linden Lab operates LindeX, which allows the online currency within Second Life known as Linden Dollars to be exchanged for U.S. dollars for a fee of 3.5 percent per transaction.

The exchange of real-world money allows for true commercial activities to flourish within Second Life, the complaint states, including that of Eros, which counts more than 100,000 customers in the virtual world.

While the Second Life Grid is employed as a digital rights management program, the complaint alleges that “Linden Labs conducts little supervision or enforcement to insure that such content copying is eliminated, minimized, or detected,” as it does not ban users for uploading or selling copied content.

The Digital Millennium Copyright Act is described as ineffective and sometimes counter-productive because takedown notices sent to Second Life pirates can cancel their accounts and create a new one to re-upload the content.

In addition, the suit claims some infringers will counter-file, thus leading to the release of personal information. Other infringers will threaten rights-holding merchants with the release of the stolen content if file a DMCA claim.

If a pirated is successfully taken down, the suit alleges Linden Labs will restore access to the content with public outcry.

When Second Life users search for a product, they see trademarked stores and products, as well as products that counterfeited. The suit compares “the manner in which this has occurred is akin to the knockoff handbags and purses sold near Canal Street in New York City.

Eros claims the cheap knockoff of products bearing the SexGen brand causes harm by creating confusion among consumers and is destroying the reputation of the company.

This is the second lawsuit from Eros founder and CEO Kevin Alderman involving Second Life. In March 2008, Alderman filed a complaint against Robert Leatherwood, known online as Volkov Catteneo, that allegedly used Second Life to sell unauthorized copies of a software program developed by Alderman.

The suit was settled with Leatherwood agreeing not to sell or copy any products owned by Eros. He agreed also to not help anyone copy and Eros products, and to turn over the email addresses of anyone that had access to the Catteneo avatar.

Related:  

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

German High Court Puts Pornhub, YouPorn 'Network Ban' on Hold

A German high court on Friday temporarily barred a state media regulator from ordering internet providers to cut off access to Aylo-owned adult sites Pornhub and YouPorn in Germany, pending further action by Cypriot and European Union authorities.

Luxembourg Media Regulator Fines LiveJasmin for AV Noncompliance

The Luxembourg Independent Audiovisual Authority (ALIA) has levied a fine of 25,000 euros (approximately $28,000) against webcam platform LiveJasmin for failing to comply with provisions of the country’s Electronic Media Law.

AdultHTML Introduces Subscription Option for Website Owners

AdultHTML has added a subscription option for its web development service, allowing site owners to pay a monthly fee for access to developers and tools.

French Parliament Rejects Ban on Purchase of 'Remote' Sexual Services

The French National Assembly has backed off from a proposal to criminalize the purchase, and/or facilitation by online platforms, of sexual services performed remotely by streamers and custom content creators.

2027 XBIZ Exec Awards Pre-Nominations Period Opens

XBIZ is pleased to announce that the pre-nomination period for the 2027 XBIZ Exec Awards, the adult industry’s preeminent career honors, begins Wednesday and runs through Oct. 14.

Takedown Piracy Reports Infiltration, Monitoring of Mega.nz

Takedown Piracy has reported that it successfully infiltrated Mega.nz folders and identified and removed nearly two million instances of stolen content.

Pornhub Unblocks Australia Users on iOS Devices, Citing Apple AV Effectiveness

Pornhub parent company Aylo on Tuesday announced that users in Australia will once again be able to access the popular site if they are using Apple devices and have confirmed their age through Apple’s Australian age-verification process.

California Governor Signs Bill Limiting CIPA Claims

Governor Gavin Newsom has signed into law a bill to narrow the scope of the California Invasion of Privacy Act (CIPA), to prevent abusive lawsuits targeting online businesses, including adult websites.

California Enacts Stricter UGC Rules for Adult Sites

Governor Gavin Newsom has signed into law a bill to impose tighter compliance standards for user-generated content (UGC) on adult websites accessible in California.

Minister: UK Aims to Begin Enforcing 'Choking' Ban Before Year's End

The U.K. will soon begin enforcement of a new law criminalizing depictions of “non-fatal strangulation” in adult content, according to a Ministry of Justice official.

Show More