A virtual land dispute in Second Life will be resolved in federal court after a judge's ruling. A lawsuit filed in May of 2006 by Pennsylvania attorney Marc Bragg accused Linden Lab and its CEO Philip Rosedale of wrongfully seizing his virtual land and unilaterally shutting down his Second Life account—intellectual property that Bragg says is worth thousands of (real-life) dollars. Linden Lab filed two motions to dismiss the suit, arguing that Bragg came into possession of his land wrongfully, but the Pennsylvania judge denied those motions.

Linden Lab has long maintained that virtual "property" owned by its residents in Second Life belongs to the players. Therefore, things like virtual clothing, buildings, and land all legitimately belong to the residents who created or purchased them, and the burgeoning trade of such is legitimate. Linden Lab sells "land" to residents directly—which translates in real life to server space for the land and things that are built on it—and does so through online auctions. Bragg purchased the land in question through an auction offered by the company, which he argues is the company's fault for selling it to him if he wasn't supposed to have it.

"I am reaching out to you that wish to help support this case and assist me in deflecting some of the substantial costs that could arise from these acts," pleaded Bragg on his law office's web site. "The issues being litigated are important to many people participating in Second Life, as well as MMORPGs generally, and they should not be abandoned simply because the Defendants succeed by stretching the financial resources of a single man."

But Bragg didn't win the auction in the same way that most people do. The auction wasn't publicly available yet and was not posted on Linden Lab's main auction page, but he was able to access it by changing out the ID number in a URL for an auction that was public for one that wasn't. He was then able to purchase the land for far below (virtual) market value and complete the sale automatically before the auction ever officially started.

Linden Lab and Rosedale made a motion to dismiss the lawsuit for lack of personal jurisdiction and another motion to compel arbitration. The West Chester judge, however, denied both motions and said that while Linden Lab's terms of service—which Bragg admits to agreeing to—say that disputes must be carried out in California, Second Life is ultimately a business that operates across multiple states by virtue of operating on the Internet, and therefore the complaints can be heard outside of California's law system.

Bragg is demanding roughly $8,000 in restitution from Linden Lab, and it appears as if this will be the first case over virtual land to make it all the way to court. Some believe that the outcome of the case could affect how the ownership of virtual property is treated in relation to games like Second Life and World of Warcraft, where users often buy and sell items with both virtual and real money. However, the case may never address the topic of virtual property, as the dispute centers mostly around Second Life's terms of service and how the company's insecure auction result should be handled. Linden Lab made a mistake, and a player managed to take advantage of it.