Yes, it happened! A lawsuit launched, now dropped, about copyrights in Second Life. Apparently a company specialised in writing scripts for virtual sex toys and M. Leatherwood a year ago did copy the items to sell them on Second Life. The company sued him for breach of copyrights. The case (federal) was dropped after settlement with no admission of liability.
Reading the article, I was interested in the plaintiff's argument that the legal rules of the real world apply to online universe like Second Life. And the contrast to M. Leatherwood's approach to the breach: "I did it in private," he said. "I wasn't out to do a huge market thing. I was doing it for a little bit of money." In other words, breach was implicitly acknowledged; motive (=money) was at the heart of the action, like most copyrights infringment by the way; defendant did not really challenge the fact that real world rules could be transplanted to virtual worlds. Is it because money is at stake? Second Life currency being exhangeable against real dollars?
See TEchDirt 27 March 2008 http://www.techdirt.com/articles/20080326/164522658.shtml refering to
26 March 2008 on SignOnSanDiego http://hosted.ap.org/dynamic/stories/T/TECHBIT_VIRTUAL_SEX_MACHINE?SITE=CADIU&SECTION=HOME&TEMPLATE=DEFAULT
and even the Forbes newspaper mentioned it : "Lawsuit over online sex toys settled" (26 March 2006) http://www.forbes.com/markets/feeds/afx/2008/03/26/afx4817411.html
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