Galileo Law

Hill, Susan Corts. “Living in a virtual world: ethical considerations for attorneys recruiting new clients in online virtual communities.(Current Developments 2007-2008).” Georgetown Journal of Legal Ethics 21.3 (Summer 2008): 753-764

The Virtual Worlds Law Library has received the following press release related to the Second Life “Sailor’s Cove” dispute (noted in VWLL’s news stream yesterday as “Banner & Witcoff Secures Virtual World Win “). VWLL generally does not post news directly, instead aggregating links to other sources, but at B&B’s request I am pleased to post this to give readers the other side of the story. -Ed.

BRACKMAN AND BRACKMAN ANNOUNCE SETTLEMENT OF SECOND LIFE DISPUTE; CLIENT PREVAILS IN CONTROVERSY OVER CLAIM OF ORAL PARTNERSHIP AGREEMENT AND PROPERTY OWNERSHIP

(Westchester County, NY, July 23, 2008) – Brackman and Brackman, a general practice of law with special emphasis on the developing field of virtual law, as well as corporate ethics and regulatory compliance requirements, white collar criminal defense, property law and alternative dispute resolution, announced today the successful settlement of a claim that the firm’s client, Patrick Leavitt* had entered into a partnership agreement with two other SL avatars. Tasha Kostolany and Izabella Bentham had voluntarily provided services for Leavitt as estate managers in the development and operation of Leavitt’s SL properties. Leavitt is the sole owner of 21 regions in the virtual world, collectively known as Sailor’s Cove. Neither Kostolany nor Bentham ever contested that Leavitt was the sole legal owner of the 21 regions that constitute Sailor’s Cove, but alleged that Leavitt had made them full partners in the endeavor.

Second Life is owned by Linden Research, Inc. of San Francisco, California, and populated by millions of “residents” who through the use of open-ended software have created a virtual world and thriving economy that continues to grow each day. Linden Research, through its Terms of Service and End User Agreement has granted residents the intellectual property rights to items and objects they create and the in world currency, “Linden dollars” (Lindens) can be easily converted to US currency.

The ability to convert Lindens to U.S. Currency has created the opportunity for “real world” corporations and individuals to profit in the real world from their SL businesses. Current estimates suggest that SL commerce generates over ($1,000,000.00) in U.S. currency every day.

The subject of this controversy involved the ownership rights to Sailor’s Cove, a robust and popular New England themed waterfront community, complete with shops, sailboats, rental slips and a luxury yacht club. Bentham and Kostolany asserted that their voluntary efforts to work for Leavitt as estate managers entitled them to equal ownership rights and that Leavitt had made them full and legal partners in the endeavor.

Robert T. Brackman, Esq. was able to negotiate a successful settlement agreement with Bentham and Kostolany’s legal representative, thus avoiding costly and protracted litigation. “While our client had hoped that his relationship with Bentham and Kostolany would continue to be a productive one, and still has nothing but good words for their talented contributions to his vision, there was never a written agreement that outlined the legal relationship of the parties. When disagreements and discord began to outweigh those contributions, it was my client’s right to ask them to no longer associate themselves with Sailor’s Cove,” Brackman said. “Indeed, while Leavitt is confident that he would have prevailed in our real world courts, the question in this case as to whether or not there was any indicia of an oral agreement will remain unanswered. Virtual world residents, attorneys and other interested parties should watch closely for judicial rulings that address the issue as to whether digital communications between computer generated images will be interpreted to constitute “oral communications” in the first instance. This is particularly relevant when, as in this case, the real parties associated with their SL avatars had never met or even spoken on the telephone. The impediments to verify the real identity of an avatar one “talks to” in world suggests the ultimate answer may be in the negative. Such a ruling will have a dramatic impact on all forms of virtual contracting.”

In exchange for a confidential sum in compensation for their acknowledged “sweat equity,” Kostalony and Bentham have dropped all purported claims of partnership or ownership rights, and have agreed to disengage from any further participation in the operation, future development and all other activities associated with Sailor’s Cove.

“As Second Life and other similar user-created platforms continue to grow, attorneys, state legislators, regulatory agencies and the federal government will no doubt be taking a closer look at all of the legal issues and social implications these virtual worlds present,” Brackman said. “The tracks of the mighty transcontinental railways may have populated America’s Wild West, but it took the rule of law to tame it. Today, there really is know sheriff patrolling these virtual worlds, but no doubt that day is not far off. Clearer regulation and enforcement governing civil intercourse amongst avatars, and the aggressive investigation of allegations of financial fraud and other forms of corruption will be critical be if those who own and those who use this new technology are going to continue to grow and prosper.”

Mr. Brackman practices law with his wife, Jody H. Brackman, a New York City No Fault Insurance Arbitrator, and together they bring over a half-century of legal experience to the aid of their clients. Brackman, a former prosecutor, served in some of the highest law enforcement positions in New York City and State, among them Inspector General for the NYC Transportation Department and the city’s Deputy Commissioner for Investigations.

Mr. Brackman also maintains his Second Life presence as the avatar known as “Solvur Quandry,” and owns and operates a Second Life enterprise known as TRENCHCOAT INVESTIGATIONS. For more information please contact Mr. Brackman in world, or at bob@brackmanandbrackman.com.

*Please note: to protect individual privacy and the confidential nature of the agreement entered into by the parties, individuals are only identified by their Second Life names.