First Sale doctrine on digital goods in a virtual world
<p>For our hypothetical we set the stage using Second Life as an example virtual world. Second Life is hosted in the United States by Linden Labs. <a href="https://www.lindenlab.com/legal/second-life-terms-and-conditions" rel="nofollow noreferrer">SL Terms of Service by Linden Labs</a>.</p>
<p>People can upload stuff into the world. Everybody can see items in that digital place if they have access - which is specifically allowed via the ToS in 1.4. People can buy stuff from one another for (indirect) money with up to three of the following permissions via the system: making Copies, Modifying, and Transfering, which is regulated in the ToS 1.5:</p>
<blockquote>
<p>1.5. You may grant certain Content licenses to other users through the Second Life permissions system.</p>
<p>Your interactions with Second Life may include use of the Second Life permissions system and the copy, modify, and transfer settings for indicating how other users may use, reproduce, distribute, prepare derivative works of, display, or perform your Content in Second Life subject to the Agreements.</p>
</blockquote>
<p>Common usage is to buy &amp; sell items CM or MT, or to add a specific usage license to CMT packs that prescribe that you only may give away your modifications with either C or T enabled.</p>
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<p>Alice uploads an item and sells it to others without specifying such a license. Buyers get the item with CM permissions, so can't give them away but have multiple altered copies.</p>
<p>Bob buys the item. For whatever reason, Alice wants Bob to stop using the item.</p>
<p>Obviously, Alice can't buy the item back since Bob doesn't have the Transfer-ability on that item.</p>
<p>But isn't Alice barred from demanding Bob to stop using her product by the first sales doctrine <em>and</em> section 1.5 of the ToS?</p>

<p><a href="https://www.lindenlab.com/tos" rel="nofollow noreferrer">Linden Labs Terms of Service (LL ToS)</a> is separate from and additional to the <a href="https://www.lindenlab.com/legal/second-life-terms-and-conditions" rel="nofollow noreferrer">Second Life Terms of service (SL ToS)</a></p>
<p>Under LL ToS 2.3 users waive moral rights to uploaded contest. Under LL ToS 2.4 users grant other users a license to use uploaded content, with such rights as may be selected at the time. Under Under LL ToS 2.6 users may delete uploaded content, but not such content as has been previously transferred to another user's account. The exact legal wording of the &quot;User Content License&quot; is not included in either ToS document, as far as I can determine.</p>
<p>This seems to mean that Alice has granted a license to Bob to use and modify content that Alice has created. Nothing in that license seems to allow her to terminate the license, nor to demand that Bob delete or cease to use the content.</p>
<p>Alice probably could separately negotiate a contract with Bob, under which Bob agrees to delete his copies of any content created by Alice, in return for whatever consideration they agree to. Alice could not force Bob to agree to such a contract, however.</p>
<p>If Alice is subject to US law, she (or her heirs) can invoke <a href="https://www.copyright.gov/title17/92chap2.html#203" rel="nofollow noreferrer">17 USC 203</a> to terminate any license grants. However, this may only be done during a five-year period starting 35 years after the grant was made, which is not highly practical for the case at hand.</p>
<p>Aside from the termination provisions of 17 USC 203, there does not seem to be any legal way for Alice to force Bob to stop using the content she created and licensed. This is not the same as the &quot;First Sale Doctrine&quot; (FSD) for physical copies, as under the FSD the owner of the copy has an absolute right to resell, lend, or rent the copy to whoever he likes, and Bob does not. But there is a degree of similarity to the FSD, in that Alice cannot force Bob to cease use.</p>
<h2>ToS Provisions</h2>
<p>LL ToS Section 2.3 provides that:</p>
<blockquote>
<p>Except as prohibited by law, you hereby waive, and you agree to waive, any moral rights (including attribution and integrity) that you may have in any User Content, even if it is altered or changed in a manner not agreeable to you. To the extent not waivable, you irrevocably agree not to exercise such rights (if any) in a manner that interferes with any exercise of the granted rights. You understand that you will not receive any fees, sums, consideration or remuneration for any of the rights granted in this Section.</p>
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<p>LL ToS Section 2.4 provides that:</p>
<blockquote>
<p>You agree that by uploading, publishing, or submitting any Content to any publicly accessible areas of the Service, you hereby grant other users of that aspect of the Service a non-exclusive license to access the User Content through the Service, and to use, reproduce, distribute, prepare derivative works of, display, and perform the Content on the Service solely as permitted by you through your interactions with the Service under these Terms. This license is referred to as the &quot;User Content License,&quot; and the Content being licensed is referred to as &quot;User Content.&quot;</p>
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<p>LL ToS Section 2.6 provides that:</p>
<blockquote>
<p>Where permitted, you may delete copies or instances of your Content that you have displayed or that are in your Account inventory through the normal functionality of the Service, such as by emptying the trash folder in your Account inventory as applicable. In such event, the licenses granted by you in this Section 2 shall terminate in the manner provided below, but only for those particular copies or instances of Content that you have deleted from the Service.</p>
</blockquote>
<blockquote>
<p>You acknowledge that this termination will not apply to any other copies or instances of the same Content that you have not specifically deleted from the Service, including without limitation those that may be displayed elsewhere through the Service and those that may be in the Account inventories of other users to whom you transferred copies.</p>
</blockquote>

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