Have you heard of Second Life? It’s a virtual world, where users create virtual characters called avatars that can interact on-screen. You can exchange real dollars into the currency of Second Life (called Linden Dollars, or Lindens)—the first true “information economy” is wholly contained inside this virtual world, where people create art, give language lessons, write stories, and do whatever else they choose. Residents even retain in-world copyright over their digital creations.

The popularity of virtual worlds like Second Life highlight the need for a change in tort law.

On Tuesday, July 3, a real life person named Kevin Alderman filed suit against a Second Life avatar named Volkov Catteneo for copyright infringement. Alderman ran an adult entertainment empire inside this virtual universe. His star product was a virtual bed that could be used to recreate adult films with avatars. Alderman sold it for 12,000 Lindens ($45) but Catteneo has found a hack to let him make free copies, which he’s selling at one third the price. As part of his suit, Alderman is seeking a subpoena to force Linden Labs, the company that owns Second Life, to reveal whatever they know about Catteneo’s actual identity.

Alderman says he first tried to resolve things amicably. But the virtual Catteneo, who allowed himself to be interviewed inside Second Life by a real Reuters reporter, denies the two have been in contact.

The key question: How do we balance the right to sue against computer users’ belief, and reasonable expectation, that what happens in Second Life stays in Second Life?

Interestingly enough, the popularity of virtual worlds like Second Life highlight the need for a change in tort law. When litigation arises, complaints are oftentimes drafted in as general a fashion as possible so as to give plaintiffs the maximum leeway in discovery and to give defendants incentives to settle even when they could or should have fought the case out. In virtual worlds, with people using avatars to preserve real world anonymity, such vagueness in pleading standards could lead, among other things, to extremely loose discovery proceedings that might seriously impinge on the ability of even uninvolved people to remain anonymous, thus undermining the feasibility of the continued existence of these virtual worlds.

For these reasons, when lawsuits involve subpoenas to uncover the identities of virtual avatars—or, for that matter, pseudonymous bloggers and blog commenters—both state and federal rules of civil procedure likely need to be reformed so that plaintiffs will need to satisfy some clear standard before they can force pseudonymous Internet users into the open. My suggestion: Plaintiffs should have to discuss the merits of the case itself in a fashion specific enough to survive a motion to dismiss—and thus to justify discovering the identity behind a particular avatar. Having allegations drawn up in what lawyers call “specific and particular form” at the onset of litigation will help parties draft reasonable discovery rules—and the protective orders that would likely accompany those rules—to treat both sides fairly.

Given Second Life’s value as a hotbed of capitalism, it is especially important to ensure that we have clearly defined rules concerning litigation that arises out of virtual interactions. If virtual worlds are to remain viable and if we are to continue to enjoy the fruits of their innovations, we need to integrate them into the tort system. Cases among real life litigants have done plenty to demonstrate the need for tort reform. Cases between virtual avatars, too, show that there are many areas where the law could be improved.

Pejman Yousefzadeh is an attorney living in Illinois. He blogs at A Chequer-board of Nights and Days, and Red State.

Image credit: Avatar "Kellysue Desoto" from Second Life, by Flickr user Kelly Sue.