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Intellectual Property Law

: The TechKnowledgy Blog

Pennsylvania Case Could Give Second Life to Click-Wrap Licensees

By Steve Cosentino

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The recent Eastern District of Pennsylvania case of Bragg vs. Linden Research, Inc. recently garnered significant attention for its potential impact on the ownership of virtual property in the popular website Second Life.  However, the courts analysis of principals of  unconsciounability  to an arbitration clause in a click-wrap agreement could impact click-wrap agreements in all areas of electronic commerce. 
 
Mark Bragg, a lawyer who also participates in Second Life, sued Linden Research over issues relating to ownership of virtual property that Bragg claimed to have rights to in the Second Life virtual world.  A key issue in this dispute, however, related to an arbitration clause in the click-wrap terms and conditions for Second Life participants. 
 
The Court, applying California law, found that the arbitration clause was unconscionable from a procedural standpoint because it was an adhesion contract and that users did not have an alternative to Second Life available.  Second Life was the only forum for trading virtual property in an online virtual world.  From a substantive standpoint, the Court found the arbitration clause to be unconscionable because the agreement

Full post as published by The TechKnowledgy Blog on April 15, 2008 (boomark / email).

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