Wilson Sonsini provides extensive and cutting-edge legal services for innovators, technology pioneers, and disruptors. As part of our focus on emerging technologies, our attorneys are publishing a series on applying and adapting existing law in the Metaverse throughout 2022. This is the third item in our Metaverse series. Past alerts and advisories include Antitrust: Into the Metaverse and Headed to the Metaverse? Be "The One" to Minimize Money Laundering Risk.
In recent months, many technology companies have indicated that the "Metaverse" is the Next Big Thing. Proponents claim that the Metaverse will be far more immersive and all-encompassing than traditional web interfaces.1 Like with traditional web-based services, it is likely that user-generated content will be hosted on or organized by service providers. If the Metaverse becomes the dominant communications method, those Metaverse service providers might become even more prominent intermediaries of content than existing web platforms. The question, then, is how?
Two of the most notable laws regulating the internet—Section 230 of the Communications Decency Act (Section 230) and the Digital Millennium Copyright Act (DMCA)—were designed for and have been frequently applied to web-based intermediaries like search engines, social media networks, and online periodicals. Because the Metaverse is still more of a concept than a product, caselaw on the application of Section 230 and the DMCA is scarce. Nevertheless, when a dispute arises, it seems likely that both doctrines will apply with as much force in the Metaverse as they do on the internet.
Section 230
The most frequently invoked part of Section 230 is Section 230(c)(1): "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." So influential is this immunity that it has been called the "twenty-six words that created the Internet."2
Under this provision, providers of services generally are not held liable from any claim that seeks to treat the providers as though they were the publishers of third-party content. Courts have uniformly held that Section 230(c)(1) affords a broad immunity regardless of how a plaintiff styles its claims, whether the service provider is on notice of alleged problems with the content, and the service provider's motivation in hosting or providing access to the content. Where the immunity applies, service providers can invoke it to secure dismissal at the earliest stage of a case, allowing them to avoid costly litigation battles.3
There are three elements for a Section 230 immunity defense: 1) the defendant must be a "provider … of an interactive computer service"; 2) the content at issue should be "provided by another information content provider" (i.e., a third-party); and 3) the claim under consideration should seek to treat the interactive computer service provider as a "publisher or speaker" of that third-party content.4
It is likely that all three of these elements would apply with equal force to user-created content in the metaverse. For instance, a user might create a defamatory shirt that their avatar might wear when being displayed to other users on the provider's Metaverse. Section 230 would immunize the provider (though not the user that designed the shirt) from a defamation claim because the provider provides an interactive computer service, the third-party user generates the content, and the hypothetical claim would treat the provider as the publisher of the shirt.
DMCA
The DMCA provides online service providers several safe harbors from copyright infringement for i) content stored at the direction of a user (i.e., user-generated content); ii) system caching; or iii) information location tools.5
To qualify for such safe harbors, a defendant must be a service provider, "must establish a ‘repeat infringer' policy to facilitate termination of infringing accounts," and "must not obstruct 'standard technical measures' that may be 'used by copyright owners to identify or protect copyrighted works.'"6 Furthermore, the online service provider must also, among other measures, register an online account with the Copyright Office and expeditiously take down infringing matter on obtaining knowledge or awareness of the matter.7
Cases involving the game Second Life, which many consider to be the precursor to the Metaverse currently being envisioned,8 show that DMCA rules that apply to websites and existing service providers should apply with equal force to the Metaverse. The most notable such case was a tangled dispute over the copyrightability of a script used to create virtual animals in Second Life. Ozimals Inc. filed a DMCA takedown notice with Second Life's provider, Linden Research, alleging that Amaretto Ranch's virtual horses violated Ozimals' copyright in the script. In response to the takedown notice, Amaretto sued, alleging that Ozimals' takedown was a misuse of the DMCA. The court concluded that Ozimals did not hold exclusive rights in the script. Notably, the court never questioned the applicability of the DMCA to the virtual horses.
In another lawsuit, FireSabre Consulting LLC v. Sheehy, the court noted that Linden had taken down allegedly infringing content after plaintiff filed DMCA takedown notices.9
Wilson Sonsini has deep experience litigating Section 230 and DMCA cases and advising clients on Section 230 DMCA issues. For any questions about Section 230 or the DMCA more generally, please contact members of the firm's internet strategy and litigation practice. Additionally, for more information on Metaverse-related issues, please do not hesitate to contact one of the attorneys in the firm's electronic gaming group.
Ariel Friedman contributed to the preparation of this advisory.
[1] See, e.g., Andrew Hayward, What is the Metaverse? The Immersive, NFT-Powered Future Internet, Decrypt.io (Feb. 17, 2022), https://decrypt.co/resources/what-is-the-metaverse-immersive-nft-virtual-world.
[2] See, e.g., Jeff Koseff, The Twenty-Six Words That Created the Internet (2019).
[3] See Lauren Gallo White and Amit Q. Gressel, Executive Order Directed to Section 230 to Increase Regulatory Scrutiny of Online Services, Wilson Sonsini Goodrich & Rosati (June 3, 2020), https://www.wsgr.com/en/insights/executive-order-directed-to-section-230-to-increase-regulatory-scrutiny-of-online-services.html.
[4] 47 U.S.C. § 230(c)(1); accord, e.g., Universal Commc’ns Sys. v. Lycos, Inc., 478 F.3d 413 (1st Cir. 2007).
[5] Brian M. Willen and Lauren Gallo White, Court Allows First Amendment Challenge to Copyright Law to Proceed, Wilson Sonsini Goodrich & Rosati (July 8, 2019), https://www.wsgr.com/en/insights/after-three-year-wait-court-allows-first-amendment-challenge-to-copyright-law-to-proceed.html.
[6] Obodai v. Demand Media, Inc., No. 11 Civ. 2503 (PKC), 2012 U.S. Dist. LEXIS 83109, at *7–8 (S.D.N.Y. June 13, 2012).
[7] 17 U.S.C. § 512.
[8] See, e.g., Tyler Wilde, The creator of Second Life has a lot to say about all these new ‘metaverses,’ PCGamer (Apr. 1, 2022), https://www.pcgamer.com/second-life-metaverse-interview/ (“Second Life[ is] arguably the closest thing we have to the metaverses first described by sci-fi novels: a user-built 3D world in which inhabitants assume custom avatars, socialize, and run genuine businesses.”).
[9] FireSabre Consulting LLC v. Sheehy, No. 11-CV-4719 (CS), 2013 U.S. Dist. LEXIS 139550, at *18 (S.D.N.Y. Sept. 26, 2013) (“[I]t is undisputed that after August 1, 2008, Plaintiff entered Second Life and removed content, and that content was removed by Linden in response to Plaintiff’s DMCA takedown request . . . .”).
