(8:31:26 PM) Jayne: back~
(8:31:33 PM) Silas Mousehold: Yay
(8:31:52 PM) Jayne: ok, what question do you have?
(8:32:22 PM) Silas Mousehold: Okay, real world situation, so I won't use fake names.
(8:32:26 PM) Jayne: ok
(8:32:46 PM) Silas Mousehold: Linden Labs, creator of Second Life, sells virtual real estate to users.
(8:33:25 PM) Silas Mousehold: You can buy your own sim (like a "zone" in FFXI), but they are quite expensive. There is also a monthly maintenance fee.
(8:33:26 PM) Jayne: ok
(8:34:54 PM) Silas Mousehold: Recently Linden Labs announced a 66% increase in maintenance fees for a certain kind of sim, which as you can imagine, has many people up in arms. They paid hundreds of dollars for something, but now that maintenance fees (subscription, basically) is being jacked up so dramatically and without warning, many of these people will not be able to afford it.
(8:35:19 PM) Jayne: *nods*
(8:35:53 PM) Silas Mousehold: One of my friends owns 3/4 of one of these sims, which he expected to be paying X amount per month for. Now that he has no way out, however, the annual cost will go from about $600 up to over $1000.
(8:36:20 PM) Silas Mousehold: Do people like him (Wendy is his name online) have any recourse? Or are they all just going to get screwed?
(8:36:41 PM) Jayne: I would like to see the terms of service for sale of these sims, first
(8:37:01 PM) Jayne: I have a hunch that it's more contractual than proprietary
(8:37:25 PM) Silas Mousehold: Unfortunately I don't know what they are.
(8:37:34 PM) Jayne: let me do a bit of quick research
(8:37:45 PM) Jayne: ok
(8:37:57 PM) Jayne: I can try looking at this from a property way
(8:38:34 PM) Jayne: when the sims are sold to users, is it sold for a fixed fee for a fixed amount of time, along with maintennance fees?
(8:39:08 PM) Silas Mousehold: There is a fee to purchase/configure the sim. After that there are only monthly maintenance fees.
(8:39:37 PM) Jayne: is the fee to purchase/configure the sim effective for a fixed amount of time
(8:39:43 PM) Silas Mousehold: It is effective forever.
(8:39:48 PM) Silas Mousehold: You never have to pay that again.
(8:40:14 PM) Jayne: seems to be a fee simple with maintennance then, hold on
(8:40:27 PM) Jayne: what are the consequence of not paying maintennance?
(8:40:47 PM) Silas Mousehold: Loss of the sim.
(8:41:01 PM) Silas Mousehold: I am not precisely sure on the proceedings there.
(8:41:36 PM) Silas Mousehold:
http://secondlife.com/corporate/tos.php(8:41:43 PM) Silas Mousehold:
http://foo.secondlifeherald.com/slh/200 ... it-by.html(8:42:03 PM) Silas Mousehold: There are the terms of service and a news article on the event.
(8:42:59 PM) Silas Mousehold: There is a case that could offer precedence. It is Bragg v. Linden Research.
(8:43:41 PM) Silas Mousehold: Over land ownership. (Sims are land, basically.)
(8:43:59 PM) Jayne: I'll have to see if it classifies as 'land' first
(8:44:04 PM) Jayne: if it does, then it gets easier
(8:45:19 PM) Jayne: on a contractual basis, it is in linden labs' favour
(8:46:01 PM) Jayne: I'm now going to check on the ruling on bragg and linden
(8:46:42 PM) Silas Mousehold: The ToS explains their delinquency policy, as well as everything else, it looks.
(8:47:00 PM) Silas Mousehold: Everything I find on the land/sim FAQs points to it.
(8:47:25 PM) Silas Mousehold: I think Bragg vs Linden may have been settled in Bragg's favor.
(8:47:34 PM) Silas Mousehold: (Settled out of court, I mean.)
(8:48:03 PM) Silas Mousehold: I think Linden did so to avoid setting a precendent on the ownership of the virtual property that they effectively control in Second Life.
(8:48:33 PM) Silas Mousehold: And then they promptly altered their ads and ToS to remove all references indicating that you can actually "own" the virtual property.
(8:48:57 PM) Jayne: was wendy's land purchase before or after the alteration of the ToS?
(8:49:12 PM) Silas Mousehold: I don't know.
(8:49:54 PM) Jayne: did wendy rely on any representation at all, that the sims purchased were to be transsacted in his own personal capacity?
(8:51:44 PM) Silas Mousehold: In order to own an OpenSpace sim (the type of sim in question), you must already own a normal sim. He only owns 3/4 of an OS sim, meaning his account could not be the one on file as owner, so to speak.
(8:52:21 PM) Silas Mousehold: In other words, he had to go in on it with someone. But I know he paid part of the setup costs.
(8:52:45 PM) Silas Mousehold: Acutally, I could be wrong.
(8:53:00 PM) Jayne: on face level, it's gonna be very difficult
(8:53:08 PM) Silas Mousehold: They could have transfered ownership to him afterwards. (Which is no longer allowed, as of the announcement of a pricing increase.)
(8:53:41 PM) Jayne: ok, I'll assume a scenario, and you can tell me if it's accurate later
(8:53:51 PM) Silas Mousehold: So I would say his account is probably on file as the owner of the entire sim. (It's all or nothing). He rents out part of it.
(8:54:50 PM) Silas Mousehold: Oh, this might complicate things: Wendy lives in London. He's not a US citizen, but Linden Labs is based in the US (California).
(8:55:04 PM) Jayne: Wendy knew about purchasing and owning sims from an advertisement, or general policy, of Second life, and that he may make lindens off them, which can be exchanged for real life cash through LindenX
(8:55:15 PM) Jayne: I'm approaching it from international law
(8:55:19 PM) Silas Mousehold: Okay.
(8:56:18 PM) Jayne: He relied on the notion that he may hold the sims, as long as he paid a specific maintennance fee, for a specific amount of time
(8:56:26 PM) Jayne: and now, this is the important part
(8:56:58 PM) Jayne: there was a representation along the way, encouraged by linden labs, that the maintennance fee payable is to be that specific amount
(8:57:14 PM) Jayne: I'm looking through the ToS to see if there's a variation clause
(9:01:24 PM) Silas Mousehold: *nod*
(9:02:19 PM) Jayne: there is a clear cause of action
(9:03:41 PM) Silas Mousehold: Not to distract, but this is how I look at it: you sign up for internet with a company. They charge you $200 for setup and the cable modem. They advertise $30 a month for their service. Then 6 months in, they alter their pricing to be $50 a month. If you do not pay the new price, they will take the cable modem back and you'll be out the $200.
(9:05:15 PM) Silas Mousehold: (Not to be confused with companies that advertise $30/mo for 6 months then $50/mo after that, mind.)
(9:05:18 PM) Jayne: Proposed Cause of Action: injunctions and declarations
(9:05:55 PM) Jayne: ok
(9:06:01 PM) Jayne: a further clarification of facts
(9:06:20 PM) Jayne: from what gather, you pay beforehand for every 30 day billing cycle
(9:06:32 PM) Jayne: which means he should have paid for the next 30 days
(9:06:41 PM) Jayne: does he still get that if he doesn't pay the next payment?
(9:07:55 PM) Silas Mousehold: You pay at the beginning, yes. If you don't within 7 days, your account is delinquent until paid.
(9:08:07 PM) Silas Mousehold: The new pricing will take effect for January's bill.
(9:08:14 PM) Silas Mousehold: Jan '09, of course.
(9:08:49 PM) Jayne: when did Wendy begin using SL?
(9:08:53 PM) Silas Mousehold: It's just like paying for FFXI.
(9:09:02 PM) Silas Mousehold: A few years ago.
(9:09:24 PM) Silas Mousehold: Not sure the exact year, but several years. 2005 if I were to guess.
(9:09:38 PM) Silas Mousehold: Maybe 2006 at the latest.
(9:09:45 PM) Silas Mousehold: I can't remember, really.
(9:10:22 PM) Jayne: I'll have to check if this is in the old ToS
(9:10:24 PM) Jayne: Linden Lab may add new services for additional fees and charges, or proactively amend fees and charges for existing services, at any time in its sole discretion.
(9:10:50 PM) Silas Mousehold: *nod*
(9:11:00 PM) Silas Mousehold: If it is, then case closed?
(9:11:29 PM) Jayne: nope, makes it very hard
(9:11:47 PM) Silas Mousehold: For Wendy, I assume.
(9:11:51 PM) Jayne: yeah
(9:12:42 PM) Silas Mousehold: I don't even think the old ToS would be available except to Linden's lawyers.
(9:13:09 PM) Jayne: most likely there will be
(9:13:26 PM) Jayne: There are a few ways to do this
(9:13:41 PM) Silas Mousehold:
http://www.gamasutra.com/php-bin/news_i ... tory=14176(9:13:57 PM) Silas Mousehold: Judge ruled that the TOS was a contract of adhesion in the Bragg suit, it appears.
(9:13:58 PM) Silas Mousehold:
http://secondlife.reuters.com/stories/2 ... g-lawsuit/(9:17:16 PM) Jayne: ok
(9:17:26 PM) Jayne: this means Wendy is able to get a London court
(9:17:40 PM) Silas Mousehold: Analyis of ToS changes in Nov. 2006:
http://www.knowprose.com/node/16730(9:17:45 PM) Jayne: instead of having to stick to california rules
(9:18:05 PM) Jayne: the arbitration clause limiting Wendy to california state laws will not be applicable
(9:18:16 PM) Silas Mousehold: *nod*
(9:19:01 PM) Jayne: and this is rather favourable, cause I know London law better
(9:19:01 PM) Jayne: and there's this thing called the unfair contract terms act
(9:21:27 PM) Jayne: alright...
(9:21:31 PM) Jayne: a few ways to do this
(9:21:50 PM) Jayne: I'd list out the causes of action here, and he can put it in his email and negotiate
(9:22:56 PM) Jayne: firstly
(9:23:22 PM) Jayne: An unfair contractual term under the Unfair Contract Terms Act
(9:23:25 PM) Jayne: UK
(9:24:14 PM) Jayne: to sastify using the UCTA, he has to put things in the jurisdiction of UK
(9:24:25 PM) Jayne: which is possible, given Bragg v. Linden Research
(9:24:44 PM) Jayne: Pa court ruling
(9:25:12 PM) Jayne: Pennsylvania court, Pennsylvania judge
(9:25:23 PM) Jayne: so their limiting jurisdiction and arbritation clause does not apply
(9:26:03 PM) Jayne: so, Wendy would be likely to strike down the unilateral increase in maintennance fee based on it being an unfair term to those dealing as consumers
(9:26:26 PM) Jayne: this would be made much easier if california has an unfair contract terms clause itself
(9:26:32 PM) Silas Mousehold: *nod*
(9:26:42 PM) Silas Mousehold: It might? *shrug*
(9:26:57 PM) Jayne: it might, but even if it doesn't we force it to London's jurisdiction
(9:27:47 PM) Jayne: London is home ground, only when it can't apply that we look to California
(9:28:05 PM) Jayne: Second cause of action, a breach of contract
(9:28:36 PM) Jayne: consideration was given in the form of the lump sum fee at the beginning that he is paying X sum of maintennance fees for Y amount of time, basically, every 30 days
(9:29:40 PM) Jayne: Linden Labs cannot retroactively, and unilaterally, alter that for existing users who were paying the lower fees. They may only do so for new users, or people buying new sims
(9:30:04 PM) Jayne: the increase maintennance fees can only be tagged ro new sims
(9:30:10 PM) Silas Mousehold: Oh, I might mention this...
(9:31:15 PM) Silas Mousehold: Linden Labs has altered its pricing before, but they -only- altered the pricing for new users and new sims. The old ones are "grandfathered" and left as-is. They do not get upgraded, but they remain at the same, lower price.
(9:31:33 PM) Jayne: and we can use this against them
(9:31:56 PM) Silas Mousehold: So anyone purchasing a sim would have believed that to be the case for the future.
(9:32:54 PM) Silas Mousehold: Forgot to mention that earlier.
(9:33:07 PM) Jayne: That raises a third cause of action which is 'Estoppel'
(9:33:27 PM) Jayne: this is a general law principle applicable in california, london, or any common law jurisdiction
(9:33:39 PM) Silas Mousehold: *nod*
(9:34:26 PM) Jayne: it's like this
(9:34:49 PM) Silas Mousehold: I already read it on Wikipedia.
(9:35:35 PM) Jayne: Linden Labs has made known, and encouraged users to buy these sims on the basis that the maintennance fees would be static, this is implied in their actions
(9:36:09 PM) Jayne: from that time when they grandfathered and allowed old prices to remain as-is
(9:36:27 PM) Jayne: there is a clear representation by conduct
(9:37:02 PM) Jayne: and reliance can be made out where wendy bought (assuming he bought it after that incident), and continued paying maintennance fees, expecting that they would remain
(9:37:28 PM) Silas Mousehold: Yes, he bought it after servers have been grandfathered at least once.
(9:37:46 PM) Jayne: an element important to this is that this must be the first time after that 'grandfathered prices' incident
(9:38:06 PM) Silas Mousehold: It is, as far as I know.
(9:38:28 PM) Silas Mousehold: I don't think they have ever raised prices for a sim retroactively. They've always been grandfathered.
(9:38:39 PM) Jayne: it is important that it is what wendy knows too
(9:38:50 PM) Silas Mousehold: Yes, he knows just as much as I do.
(9:39:03 PM) Jayne: alright
(9:39:15 PM) Jayne: then I'll have to put estoppel as the strongest head
(9:39:29 PM) Jayne: estoppel -> breach of contract -> unfair contract terms
(9:39:34 PM) Silas Mousehold: *nod*
(9:39:39 PM) Silas Mousehold: Anything more?
(9:39:43 PM) Jayne: I'll also suggest a fourth head of action, and imply and contract
(9:39:48 PM) Jayne: imply a contract
(9:39:56 PM) Jayne: that's related to estoppel
(9:40:17 PM) Jayne: and say that by Linden's actions, there's an understanding that sim maintennance prices will always be grandfathered
(9:40:27 PM) Jayne: this amounts to a contractual condition
(9:40:34 PM) Jayne: which has been breached
(9:41:09 PM) Jayne: the remedies Wendy wants are: Injunctions against raising the maintennance fees for existing sims, and a declaration that the raising for such sims are unlawful
(9:43:31 PM) Jayne: implied contract supported by estoppel, an estoppel alone cannot found a cause of action
(9:43:44 PM) Jayne: use estoppel and imply the contract
(9:43:59 PM) Silas Mousehold: Would it be "safer" to simply request his sim setup fee be refunded, by the way? Wendy and others might not want to go through a huge legal argument, but having some leverage against Linden, they might just want to use that in a discussion with the concierge to get their initial payment refunded.
(9:44:34 PM) Jayne: they might want to email linden, with those 4 causes of action, and try to make them grandfather the sim prices
(9:44:44 PM) Silas Mousehold: Linden might be more willing to refund the money than set legal precedence over grandfathering.
(9:45:06 PM) Jayne: since I doubt Linden would want to refund the initial setup fees, as allowing them to continue paying, even at the old rate, makes more economic sense
(9:45:33 PM) Silas Mousehold: Well, they can reuse those servers at higher prices. And charge the setup fee all over again.
(9:46:14 PM) Jayne: aye, it depends then
(9:46:16 PM) Silas Mousehold: Otherwise they're making less on the hardware, which takes up space in the server building. It is also, according to Linden, overloaded. That is why they are raising prices.
(9:46:33 PM) Jayne: that's where negotiation comes in, and it depends on what wendy and the rest of sim owners want
(9:46:37 PM) Silas Mousehold: *nod*
(9:46:42 PM) Silas Mousehold: Okay. Well, is that everything then?
(9:46:52 PM) Jayne: I'll list the actions out neatly
(9:47:05 PM) Silas Mousehold: How'd you know I was going to copy/paste this chat? XD
(9:48:39 PM) Jayne: 1) Misrepresentation; Breach of contract. A lump sum fee was paid for the sim as consideration for its use over a period of time, renewable at every billing cycle, subject to the contracted amount of maintennance fee. Linden Labs cannot administer the new maintennance fees proactively over existing sims where contracts have already been concluded. the contracts for said sims are not renewable.
(9:52:53 PM) Jayne: 2) Implied Contracts. in addition, there is an implied contract arising due to Linden's Labs acts of 'grandfathering' the price of old sims (gotta make reference to specific events). This allows a clear agreement and expectation between Linden Labs
(9:53:04 PM) Jayne: and the consumer base to arise.
(9:54:05 PM) Jayne: did you get the full first one?
(9:54:12 PM) Silas Mousehold: Yeah.
(9:54:28 PM) Silas Mousehold: Up to "not renewable."
(9:54:35 PM) Jayne: got it
(9:54:40 PM) Jayne: that's the whole thing
(9:54:50 PM) Jayne: ok, number 3)
(9:54:52 PM) Silas Mousehold: (By the way, if you need to do a paper on some recent legal happening, well, this might be something neat to do now that you've already reasoned all this out and done some rudimentary research.)
(9:58:20 PM) Jayne: 3) Past consideration due to estoppel. This is based on the representations and expectations created by Linden Lab's 'grandfathering' conduct. Due to repeated undertaking and actions, unilaterally, on the part of Linden Labs to grandfather old sims, this estops them from now claiming a retroactive increase of maintennance prices. Furthermore, in their Terms of Service agreement, the word use is
(9:59:24 PM) Jayne: 'proactively' which implies the revision of prices over new sims, as the provision for sims for ownership and sale is an 'existing service'. the contracts for each individual sims, consideration based on the limp sum fee paid at the beginning, have already concluded.
(9:59:25 PM) Silas Mousehold: (I'm not sure if multiple generations of sims have been grandfathered, mind. It might only be a single generation.)
(9:59:40 PM) Jayne: (*nods* just have to find that incident)
(10:03:03 PM) Jayne: 4) The variation of maintennance fees for existing fees, is supported by the variation clauses in the ToS, is an unfair term and will be struck down. This is in reference and application of the UK Unfair Contractual Terms Act. There is no difficulty is applying UK jurisdiction, as the consumer is in London, and the recent case of Bragg v Linden Research struck down the same limiting of
(10:04:42 PM) Jayne: jurisdiction and arbritation clauses. London jurisdiction can thus be applied as the contract of service is concluded in London, on the part of the consumer, and subject to UK laws. Therefore, the variation of maintennance fees, heavily unilateral on the part of Linden Labs, and the discrepancy of commercial abilities between the two parties, make for ann obvious prima facie case under the UK UCTA
(10:04:46 PM) Jayne: to be struck down.
(10:06:36 PM) Jayne: Conclusion: For the foregoing reasons, the undersigned consumer herebys requests that Linden Labs remove the increase of maintennance fees for existing sims, or to refund the undersigned for initial setup fees, as the undersigned is clearly not a party to the agreement or contract to increase maintennance fees for their sims.
(10:06:51 PM) Jayne: (bad neglish needs proof reading and improving, just don't touch the legal terms
)
(10:06:59 PM) Silas Mousehold: (hehe, okay)
(10:07:16 PM) Silas Mousehold: Mmm, thanks. Is that it then?
(10:07:33 PM) Jayne: yeah
(10:07:38 PM) Jayne: there is a case
Posted: Tue Oct 28, 2008 5:28 am
Anyway, if you wanted your OpenSim to be grandfathered, it sounds like you've got some leverage.