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

Brazil Invites Public Input on AV Guidelines

Brazil’s National Data Protection Authority (ANPD) on Friday launched a public consultation on developing guidelines for age verification mechanisms under the country’s Digital Statute for Children and Adolescents (Digital ECA), which requires adult websites to age-verify users located in Brazil.

Paysite Confidential: Inside the Creator Economy's Shift Toward Ownership

For years, the adult industry’s creator economy has been defined by platforms — powerful engines of discovery, monetization and scale that reshaped how performers connect with their audiences.

Senator Urges DOJ to Crack Down on 'Obscenity,' Attacks OnlyFans

U.S. Senator Jim Banks of Indiana this week urged Acting Attorney General Todd Blanche to reestablish the Department of Justice’s defunct Obscenity Prosecution Task Force in a letter that targets OnlyFans while repeatedly conflating “obscenity” with legal adult content.

UN Experts Urge US, Canada to Prosecute Aylo, Others for 'Exploitation'

GENEVA – The United Nations Office of the High Commissioner for Human Rights (OHCHR) has issued a press release in which two U.N. special rapporteurs, cited as experts, accuse Aylo and other companies of complicity in sexual exploitation.

Tennessee Governor Signs Bill Requiring Warnings on Adult Stores

Governor Bill Lee on Tuesday signed into law a bill requiring adult stores, theaters and other establishments in Tennessee to post warning signs cautioning patrons that they “may be contributing” to sexual assault and human trafficking.

Kickstarter Revokes New Rules Banning Fundraising for Adult Content, Products

Crowdfunding platform Kickstarter announced Tuesday that it has reversed its recent decision to impose new “Mature Content” rules banning projects that involve adult content and sextech.

Report: Irish Justice Minister Seeks UK-Style Ban on 'Extreme' Content

Ireland’s justice minister plans to introduce legislation criminalizing possession and distribution of “extreme” pornography, according to a report by the Irish Independent.

New Kickstarter Rules Ban Fundraising for Adult Content, Products

Crowdfunding platform Kickstarter has posted new “Mature Content” rules banning projects that involve adult content and sextech.

WebGroup Czech Republic Settles Florida AV Suit, Will Pay $1.2 Million

WebGroup Czech Republic (WGCZ), the parent company of XVideos, XNXX, BangBros and GirlsGoneWild, has settled a lawsuit filed by the state of Florida over those sites’ alleged failure to age-verify Florida users before allowing access to adult content.

AEBN Publishes Popular Searches for March, April

AEBN has published the top search terms for March and April from its straight and gay theaters in all 50 states and the District of Columbia.

Show More