A Pensylvania federal court has held that Second Life's user agreement cannot be enforced insofar as it requires arbitration of claims alleging that Linden Research wrongfully confiscated a user's virtual property.
A Pennsylvania user sued Linden Research and its CEO, asserting that Linden wrongfully conifscated proprty the user bought in an auction that Linden later declared invalid. Linden argued that the user could not pursue those claims in court, and instead had to pursue them before an arbitration panel in San Francisco, as required by Second Life's terms of use. The court held those terms of use were unconscionable and could not be enforced insofar as they required the user to give up his right to pursue his claims in court.
Read the entire order here.
| Attachment | Size |
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| Bragg v. Lindern research.doc | 355 KB |
There are several cases that refuse on unconscionability grounds to enforce arbitration or choice of forum clauses in EULAs or terms of service agreements (Combs v. PayPal), but the courts have generally gone the other way when legal notices purport to limit customer rights to reverse engineer or make other fair uses (ProCD v. Zeidenberg). It will be interesting to see whether this and other cases result in more judicial skepticism generally about binding users to disadvantageous terms, or whether courts will continue to blithely enforce user restrictions that negatively impact individual rights and the public interest.