VIRTUAL MADNESS?: You Can Lead a Virtual Horse to Water, But You Might Get Sued Along the Way!

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By JUSTIN SCHECK, http://online.wsj.com / JULY 30, 2011.

Disputes Over Online Animals End Up in Real-World Court; Fretting Over 'Star'.

A VIRTUAL HORSE.

A palomino mare named Star grazes on Debbie DeLouise's clover meadow, hanging out at a salt lick there and frolicking with her foal Holly.

But a legal dispute may imperil their pastoral bliss: It threatens to close the only store where Ms. DeLouise can buy food for Star and Holly. Without their special diet, the horses would waste away and turn green.

"If there's no food, I'm not sure what will happen," says Ms. DeLouise, a Long Island, N.Y., librarian. "I certainly hope no one has to find out."

Star and Holly aren't real horses. They exist only within Linden Research Inc.'s "Second Life," an online virtual world where people can fashion a new existence. But while the buying, breeding and riding of horses happens in the virtual world, litigation over them happens in real-life federal court.

The case brushing up against the horses owned by Ms. DeLouise—whose "Second Life" avatar, or alter ego, is a younger, bigger-haired version of herself—began last fall.

Virtual rabbit maker Ozimals Inc., and Amaretto Ranch Breedables LLC, the creator of Ms. DeLouise's horses, share a similar business model. Each sells cheap virtual animals to participants of "Second Life." Both make the bulk of their money by selling the food these pets need. Demand for the chow is heightened by a secondary animal market, in which bunny and horse enthusiasts breed their virtual animals and sell the offspring—sometimes for hundreds of dollars in the case of beasts with rare colors.

Ozimals, based in Pelham, Ala., has alleged that Amaretto copied its software, using horses instead of rabbits. "Amaretto's deliberate copying of Ozimals' intellectual property is undeniable," a lawyer for Ozimals wrote in a November letter to Linden and Amaretto. The letter asked that Linden shut down Amaretto's store—a move that would starve its horses and constrain its revenues. Linden declined.

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