September 12 2007, 09:54
As the Internet becomes part of our daily lives, electronic commerce (e-commerce) has been developed into one of major ordinary transaction methods. However, despite of its rapid growth and wide popularity, e-commerce is still risky in nature, due to its anonymity, accessibility, diversity, and popularity.  E-commerce is a double-edged sword: its features may benefit the online transaction environment or, conversely, harm the sound online transaction environment. Its advantages, such as convenience and anonymity, are frequently abused and may cause online fraud, damaging e-commerce. The seventh annual fraud survey reported online fraud would harm e-commerce by causing a loss of $2.8 billion out of e-commerce profits in 2005.  In order to promote the constant growth of e-commerce, one must look to practical solutions. One of the recommended solutions for e-commerce is effective redress. 
II. Redress offered by eBay
Redress is usually referred as “both reactive and proactive methods (e.g., alternative dispute resolution (ADR) and transaction insurance…).” Following to this definition, eBay, one of leading online companies in the world, provides mainly two forms of redress in addition to eBay protection policy: (a) PayPal’s Buyer Protection through secured online payment  and (b) SquareTrade’s Online Mediation in the case of disputes. 
As a secure payment provider, PayPal sends the money to recipients by the payment option chosen by senders and will cover up to $2,000 for eligible transactions, if they were paid through PayPal on eBay.  Another major redress is the Impartial Mediation Service provided by SquareTrade.  Consumers can file a case by clicking the “file a case” icon and the complainant will be notified automatically via email.  Parties are encouraged to have a direct negotiation at first, but they may have Mediation Service through the SquareTrade webpage. 
III. Survey Results from eBay users
Is redress effective to consumers? The effectiveness of redress for consumers can be measured with cost-efficiency, enforceability, and simplicity.  However, a 2005 study conducted in the U.K. should be considered at first before beginning to analyze the effectiveness. The study presented that only 8% of sellers and 3% of buyers answered that they had ever used SquareTrade’s online negotiation or mediation service among 400 U.K. eBay users.  In addition, only 4% of the pool answered that “they regarded eBay as ‘as safe a place to shop as the high street,’ while 93% of them ‘were very of fairly satisfied with the majority of their eBay transactions’ and 96% of them were satisfied with online transaction generally.”  Further information on the study includes the following:
“Of the One-third of users with problems who chose not to use any ADR mechanisms, nearly 52% resolved their disputes by contracting the other party directly, without the help of eBay. Around 20% thought that it was worth more than the value of the item in question to enter a dispute, and a similar percentage said they either couldn’t be bothered to use ADR, or did not know such process existed. Only a very few chose to turn to legal advice, or to bodies outside eBay such as the police, trading standards, credit card companies, or the courts. Even though many may have used PayPal to pay for transactions rather than credit cards or other means such as cheques or money order, it seems to show a lack of awareness among consumers of their rights…” 
IV. Strategies for the Effective Redress
The result may suggest that we can not even examine the effectiveness of the redress because too few people try to access the provided services: the existing redresses do not reach to consumers. It could be because consumers already know that the redress is not effective or they do not know that redress exists or what their rights are. Either way, solving this problem requires some marketing “strategies”.  Firstly, more convenient, enforceable, and simple redress methods should be developed under a uniform policy.  Secondly, consumer should be educated on the possible redress and their rights by governments, consumer groups, or businesses in casual languages.  Thirdly, trust should be built in the redress for its fairness, neutrality, transparency, enforceability and confidentiality. 
There are several sub issues within the strategies, and the strategies require the cooperation of governments and industries.  Governments or public sectors have motives: public policy requires consumer protection and e-commerce promotion. Industries or businesses have also incentives: they should attract consumers in the market. It is not easy, though not impossible, to align the goals of these two groups.
The positive future of effective redress is not clear, though it is needed to construct a sound e-commerce environment. However, there is a promise. Effective redress benefit e-businesses as well as consumers, as demonstrated by the fact that eBay’s earnings were increased up to 50% due to the growth of PayPal, despite of the slowdown in its main industry, the listing of auction.  Also, Amazon.com, another leading online transaction company, is considering the adoption of the secured online payment system such as PayPal “to reduce bad debt expenses.”  This implies there are big economic incentives for e-businesses to invest on developing effective redress. Considering both the government’s interests on consumer protection policy and e-businesses’ interests on economic incentive, effective redress would not be a mere dream.
 Mahamed Wahab, Globalization and ODR: Dynamics of Change in E-Commerce Dispute Settlement, 12 Int’l J. L. & Info. Tech. 123, 128 (2004).
 Susan Kuchinskas, Fraud Chewing E-Commerce Profits, eCommerce, Nov. 11, 2005, http://www.ecommerce-guide.com/solutions/secure_pay/article.php/3563526.
 American Bar Association, Addressing Disputes in Electronic Commerce: Final Recommendations and Report, 58 Bus. Law. 415, 420 (2002).
 Daril Gawith, Non Litigation-Based Redress for International Consumer Transactions Is Not Cost Effective – A Case for Reform, 3 MACQUARIE J. BUS. L. 115, 115, footnote 1 (2006).
 eBay PayPal Buyer Protection, http://pages.ebay.com/help/tp/paypal-protection.html (last visited, Sep. 7, 2007).
 eBay Resolving Disputes, http://pages.ebay.com/help/tp/problems-dispute-resolution.html (last visited, Sep. 7, 2007).
 eBay PayPal Buyer Protection, supra note 5.
 eBay Resolving Disputes, supra note 6.
 SquareTrade, A Simple, 4 Step Process to Resolve eBay Disputes, http://www.squaretrade.com/cnt/jsp/odr/learn_odr.jsp;jsessionid=aynxjgmzh1?vhostid=bliss&stmp=ebay&cntid=aynxjgmzh1 (last visited, Sep. 7, 2007).
 Gawith, supra note 4, at 115; American Bar Association, supra note 3.
 Lilian Edwards & Caroline Wilson, Redress & Alternative Dispute Resolution in Cross-Border E-Commerce Transactions, European Parliament 16 (2007), available at http://www.europarl.europa.eu/comparl/imco/studies/0701_crossborder_ecom_en.pdf.
 Id. at 21
 Wahab, supra note 1, at 131.
 See Gawith, supra note 4, at 150.
 Statement of Principles of the National Consumer Dispute Advisory Committee, CONSUMER DUE PROCESS PROTOCOL 10 (1998), citing Lucille M. Ponte, Boosting Consumer Confidence in E-Business: Recommendations for Establishing Fair and Effective Dispute Resolution Programs For B2C Online Transactions, 12 ALB. L. J. SCI. & TECH. 441, 454 (2002); Wahab, supra note 1, at 141.
 See Wahab, supra note 1, at 147-148.
 See Ponte, supra note 17, at 480; Wahab, supra note 1, at 142.
 Dan Gallagher, EBay Earings Jumpt 50% on PayPal Growth, MARKETWATCH, Jul. 18, 2007, available at http://www.marketwatch.com/news/story/ebay-earnings-jump-despite-slowdown/story.aspx?guid=%7B50FC4DC3-99C0-4C39-ACB4-88B7101CE0E4%7D.
 Peter Kang, PayPal’s Growing Pains, FORBES, Apr. 14, 2005, http://www.forbes.com/2005/04/14/cx_pk_0414paypal.html.
September 6 2007, 14:59
Many of us enjoy those cheeky, and admittedly strange, Vonage commercials. A substantial number of us are also drawn to the very low price of Vonage services as evidenced by the fact that Vonage has approximately 2.2 million users. For only $24.99 per month one can get their local and long distance phone service through the internet, but recent events indicate that this price maybe too good to be true. When deals like this come along, one may wonder how the company in question was able to charge so little and yet still turn a profit. The answer to that question may be that Vonage has infringed on patents held by Verizon, turning a profit on technology they do not legally own, according to the United States District Court for the Eastern District of Virginia. While the trial has concluded and Verizon has won the first round, this case continues on appeal. With Vonage’s demise arguably on the horizon, it is time to reflect on whether Verizon will likely emerge victorious, and also on the consequences of Verizon winning the day. Verizon Services Corporation v. Vonage Holdings Corporation involves a dispute over Voice over Internet Protocol (“VoIP”) technology, which enables consumers to communicate over the telephone using their internet connection. “VoIP involves converting voice sounds into digital format, assembling the resulting digital data into multiple packets, and transmitting those packets over the Internet.” Verizon brought this suit, alleging that Vonage had infringed on several of its patents, and demanded injunction as well as damages totaling $197 million. Verizon did in fact win. Jurors concluded that Vonage had infringed on three out of seven of Verizon’s VoIP patents. Verizon, however, must console itself with $58 million in damages, in addition to 5.5% on each Vonage customer in the form of royalties on a per month basis (if Vonage continues using Verizon’s patented technology). The jury did conclude that Verizon did not prove that Vonage’s infringement was willful. This is possibly why Verizon received only $58 million in damages as opposed to the $197 million it originally sought. While Vonage, as a result of its loss to Verizon, was subject to an injunction that would prevent it from signing up new customers, the federal appeals court has issued a stay order which allows Vonage to continue enrolling new customers as its appeal proceeds. After its loss at the District Court level, Vonage requested that this case be sent back to the district court for retrial due to the fact that the jury instructions given were not in line with the Supreme Court’s recent landmark ruling in KSR International v. Teleflex regarding an “obviousness test” to be applied in patent cases. The U.S. Court of Appeals for the Federal Circuit, which hears all patent appeals, denied this request, though Vonage may still raise this issue on appeal. Verizon is likely to counter Vonage’s argument by saying that Vonage did not properly preserve this issue for appeal, and also, that Vonage proposed the jury instructions they now challenge. Therefore, it seems unlikely Vonage will get to start their case over from scratch, thereby delaying further the final adjudication of this case. When this case proceeds to the Circuit Court for review, predictions are mixed as to which side will prevail. According to Jeff Pulver, a pioneer in the VoIP field, “Verizon’s patent claims describe a process that Pulver helped create in 1995, well before the Verizon patent.” If this is true, it certainly pokes holes in the Verizon patents and opens the door for the Court of Appeals to reverse the District Court. Verizon, however, already has one win in its column, which may have set the stage for an ultimate victory in the Court of Appeals. If Verizon wins their case, smaller VoIP companies should be afraid…very afraid. The precedent would be set at that point, and if those smaller companies are using the same technology that Vonage now uses, and can Verizon can prove it, Verizon may find itself all alone in the VoIP industry until they license their patents or someone finds a way around Verizon’s patented technology. Some claim that if Verizon wins, the way most of us have become accustomed to making calls could change significantly. It is also claimed that by going after Vonage, Verizon is effectively trying to limit the choices of the consumer to the detriment of a free market system. Freetocompete.com goes so far as to encourage people to contact Verizon to tell them they support Vonage – “It’s all about choice, freedom and savings, and it’s time that you have a voice in protecting the number of phone providers, competitive prices and future innovations you deserve.” Sites like this paint Verizon as an evil large corporation that’s trying to “screw over the competition,” but is that an accurate picture to be painting? Does a win for Verizon really equal a loss for the consumer? In the end, only time will tell whether Verizon or Vonage come out on top. One thing can be sure: patents protect us all. When someone invents some new great technology, we all benefit. What encourages those inventors to invent the technology of tomorrow? Dollar signs may be a powerful incentive. To assure that those with a talent for innovation continue to do their best work, they must be rewarded handsomely for their toils. It is capitalism at work, and it is what assures that those technologies we all know and love continue to improve, making life better and more convenient for all. Therefore, if Vonage did infringe on patents legitimately held by Verizon, they should pay and possibly even go out of business. While this may be a temporary inconvenience to some, and an enormous blow to Vonage, it is important to uphold patents to ensure that great ideas continue to flow.References Andario Strange, The Future of Internet Telephony Could Hang on Vonage Case, Apr. 26, 2007,http://www.wired.com/techbiz/it/news/2007/04/vonage_appeal. Vonage.com Homepage, http://www.vonage.com, last visited Sept. 4, 2007. Wayne Rash, Vonage Barred from Using Verizon Patents, Mar. 23, 2008,http://www.eweek.com/article2/0,1759,2107270,00,asp. Id. Verizon v. Vonage, No. 06-0682, 2007 WL 528749, at *1 (E.D. Va. 2007). Id. Eric Bangeman, Vonage Found Guilty of Infringing Three Verizon Patents, Mar. 8, 2007,http://arstechnica.com/news.ars/post/20070308-verizon-asks-for-197-million-in-damages-from-vonage.html. See Strange, supra note 1 Id. Id. See Bangeman, supra note 7. See Strange, supra note 1. Roger Parloff, Appeals Court Denies Vonage Quick Fix, May 3, 2007,http://legalpad.blogs.fortune.com/tag/vonage. See also KSR International Co. v. Teleflex, 127 S.Ct. 1727 (2007). Id. Id.; Roger Parloff, Verizon Returns Serve: Vonage Wrote the Jury Instructions It's Complaining About, May 2, 2007, http://legalpad.blogs.fortune.com/tag/vonage. Strange, supra note 1. See Id. Id. Id. Freetocompete.com Homepage, http://www1.freetocompete.com, last visited Sept. 4, 2007. Id. Id.
February 27 2007, 15:32
SIRIUS Satellite Radio and XM Satellite Radio announced plans for a “tax-free, all-stock merger of equals” in which XM shareholders will receive 4.6 shares of SIRIUS common stock per 1 share of XM stock owned. The planned merger has raised eyebrows as to whether the Federal Communications Commission (FCC) will approve the combination, particularly as under a current FCC rule SIRIUS and XM are prohibited from acquiring each other’s licenses. Based on this FCC rule, one has to wonder whether this is termed a “merger of equals,” despite what looks like an acquisition of XM by SIRIUS, to evade harsher FCC scrutiny.I. Terms of the Merger... of “Equals”?Although termed a “merger of equals,” this transaction appears to fit the model of an acquisition of XM by SIRIUS. For one, XM shareholders will receive a certain amount of SIRIUS stock in exchange for their XM shares. Second, XM shareholders will receive a 22% premium on that share transaction, resembling the price of a control premium in an acquisition. Third, SIRIUS’s Chief Executive Officer, Mel Karmazin, will lead the combined entity as CEO, but XM’s CEO, Hugh Panero, “will not have an executive role” in the new entity.The rationale for the terminology “merger of equals” may have to do with the current FCC satellite radio licensing rule. In 1997, the FCC granted only two licenses and, as a measure to ensure ongoing competition, “stipulated that one of the holders would ‘not be permitted to acquire control of the other.’”. Thus, the FCC stipulation suggests that the rule would only apply if either SIRIUS acquired XM, or vice-versa, but not if the two companies merged “equally.”II. FCC ReactionIn reaction to the SIRIUS-XM merger announcement, FCC Chairman Kevin J. Martin responded that to pass regulatory scrutiny the companies “would need to demonstrate that consumers would clearly be better off with both [i] more choice and [ii] affordable prices.” Whether this is a merger of equals or a disguised acquisition, the FCC will consider these factors in its regulatory review.A. More ChoiceThere are two possible angles from which one can consider whether a SIRIUS-XM combination will provide consumers with more choice. The first is to consider whether the combined entity will offer greater programming choices to consumers than two separate entities. The second is to consider whether the combined entity will offer more choice to consumers in general, taking into account other radio media sources.SIRIUS and XM impliedly advocate for the first angle. SIRIUS and XM claim that their combination will provide consumers with a “broader selection of content, including a wide range of commercial-free music channels, exclusive and non-exclusive sports coverage, news, talk, and entertainment programming.”The second angle would look to consumer choices in general. Being that XM and SIRIUS are the only satellite radio providers, it seems as though consumers would have less choice with only one satellite radio provider instead of two. However, the FCC could also look to a broader market of music providers, including “digital broadcast radio providers, wireless music services on mobile phones[,] and portable players such as iPods.” The problem with this argument, though, is that the broader market of “choice” exists with or without a SIRIUS-XM merger. In other words, consumers already have the choice to listen to satellite radio or another musical source, regardless of whether there are one or two satellite radio providers. Thus, whether the proposed merger will offer consumers more choice will turn upon whether SIRIUS and XM can deliver the broader radio content as promised.B. Affordable PricesSIRIUS and XM describe how the merger will enhance financial performance, and one may think that such performance benefits will flow down to consumers. SIRIUS and XM point to “better manag[ing] its costs through sales and marketing and subscriber acquisition efficiencies, satellite fleet synergies, combined R&D and other benefits from economies of scale.” However, one must also consider the immense costs currently faced by each company, as well as costs associated with the merger, which may affect consumer prices. Both SIRIUS and XM currently need “to overcome their debt and depreciation costs.” In terms of merger costs, currently “XM radio receivers [cannot] receive signals from Sirius, and vice versa.” Although XM and SIRIUS are expending efforts to develop a receiver which would be compatible with both signals, one logically would not expect this development to be cost-free. Another concern is that the presence of only one company in the market, rather than a pair of competitors, could give the merged entity “more pricing power as the only U.S. satellite radio provider.” Thus, while a merger may enhance financial performance, it is not clearly evident that the resulting benefits would overcome the costs currently borne by each company individually and the costs incurred to implement the merger.III. Predicted OutcomeThis is likely to be a difficult challenge for SIRIUS and XM. The FCC’s concerns about choice and affordable prices indicate standards against which the FCC may modify the rule if it does not see this as a merger of equals. However, one should not discount the current FCC rule against one satellite radio provider’s acquisition of the other’s license. In other words, before the FCC even considers choice and affordable prices, it should look to whether the “merger of equals” is really what it purports to be, or whether the combination is a linguistic loophole to the rule against acquiring a competitor’s broadcasting license. All in all, even if the FCC accepts the proposed transaction as a “merger of equals” rather than as an acquisition of XM by SIRIUS, it is not clear that the transaction would result in more choice and affordable prices for consumers, leading one to question the practicable viability of the transaction. Press Release, SIRIUS Satellite Radio, SIRIUS and XM to Combine in $13 Billion Merger of Equals (Feb. 19, 2007), available at http://investor.sirius.com/ReleaseDetail.cfm?ReleaseID=230306. Satellite Radio Deal Puts Focus on Regulators, N.Y. TIMES, Feb. 20, 2007, available athttp://dealbook.blogs.nytimes.com/2007/02/20/satellite-radio-deal-puts-focus-on-regulators/. Phil Mintz, The XM-Sirius Deal May Not Fly, BUSINESS WEEK ONLINE, Feb. 20, 2007 (page unavailable on Westlaw). Id. Id. Id. Joseph Menn and David Colker, Satellite Radio Competitors Agree to Merge, L.A. TIMES, Feb. 20, 2007 at Business 1 (emphasis added). Editorial, Radio Daze: XM and Sirius, the Nation’s Two Satellite Radio Providers, Want to Merge. The FCC Should Let Them, L.A. TIMES, Feb. 20, 2007, at 20 (emphasis added). Press Release, SIRIUS Satellite Radio, supra note 1. Menn and Colker, supra note 7. Id. See Press Release, SIRIUS Satellite Radio, supra note 1. Id. Editorial, supra note 8. Seth Sutel, Satellite Radio Rivals XM and Sirius Agree to Combination, CHICAGO TRIBUNE, Feb. 19, 2007, available at http://www.chicagotribune.com/news/local/michigan/chi-ap-mi-xmradio-sirius,1,2557495.story. Id. Id.
February 12 2007, 23:51
Second Life is a popular “virtual world” in which people across
the real world interact with each other using “avatars.”  Avatars
are three-dimensional alter-egos that can be completely customized;
users can change their avatar’s clothing, height, weight, and even add
features like wings.  Unlike other virtual worlds, which are
basically interactive computerized versions of fantasy role-playing
games, Second Life is not a game in the traditional sense.  It does
not have goal or end; there are no monsters to fight, mysteries to
solve, or princesses to rescue.  Rather, Second Life provides its
users with a toolkit with which they can create items within the
virtual world.  Users can create pretty much anything they want:
buildings, vehicles, clothing, even games. 
Much of the activity in Second Life centers on commerce with users
“buying” and “selling” “land” and each other’s creations.  When a
user signs up he or she receives an initial allotment of “Linden
Dollars,” Second Life’s currency, and may purchase more, using real
dollars, from Linden Lab, the creators of Second Life.  Users are
encouraged to “buy” land from Linden Lab, build a home for their
avatar, and develop businesses.  Given Second Life’s commercial
orientation it is no surprise that in-game banks developed.
The best known bank in Second Life is Ginko Financial.  As
of this writing, Ginko claims to hold 114,398,068 Linden Dollars, the
equivalent of $420,581.  Ginko promises 0.10 percent daily accrued
interest, approximately a 44 percent annual return.  No real banks
pay anything close to 44 percent annual interest and even top
investment mangers do not promise such a high return. 
The Chief Executive of Ginko Financial, who goes by the name
Nicholas Portocarrero in Second Life, will not reveal his (if “he” is
in fact a man) real name or where he is located.  Nor will he
reveal anything about how he is generating such amazing returns for his
depositors.  In an interview with Reuters, Portocarrero was
evasive at best. When asked if Ginko was generating its returns
through lending, Portocarrero responded “No, the bank is essentially
loaning the money to itself right now.”  An assertion that direct
contradicts Ginko’s website which states “Ginko Financial takes part of
the total cash deposited and gives loans to various trustworthy
entities and persons, to make the money necessary to pay the daily
interest rate.” 
The combination of outsized returns and zero transparency has
led some to conclude that Ginko is a Ponzi scheme.  In a Ponzi
scheme, the promoter promises huge returns to investors on short term
investments.  The scheme works by paying older investors with
funds from newer ones.  The first few people who invest in a Ponzi
scheme usually receive the interest promised them, but Ponzi schemes
eventually collapse as they do not actually generate money and require
an ever increasing number of new investors to keep up the interest
payments owed.  When asked by Reuters whether he was running a
scam and if he had a good way to rebut such an accusation, given that
Ginko operates without any oversight or regulation, Portocarreo was
once again evasive.  He first tried avoiding the question, but
when pressed, he finally stated that he did not know of a way to rebut
the accusation and denied that Ginko was a Ponzi Scheme. 
According to Portocarreo, Ginko’s lack of disclosure is the risk
investors take on in exchange for their large returns and that people
are just going to have to trust him. 
When asked if Ginko was profitable, Portocarreo once again
avoided the question, stating “I could say yes, but it wouldn’t be
entirely accurate. It depends on how things are calculated and (what)
you count and don’t count.”  This is a remarkable response for
someone who is paying 44 percent interest to his investors.
Ginko’s promised returns, lack of transparency, and evasive
answers should make investors suspicious or at least cautious.
Nevertheless, as the numbers show, people have deposited a great deal
of money with Ginko. More curious than people’s willingness to give
their money to Ginko, is that Linden Lab does not seem to find anything
worrisome about the venture.  Linden Lab’s CEO and founder, Philip
Rosedale, believes that banks can exist within the virtual world of
Second Life without regulation.  Rosedale likens banks like Ginko
to Grameen Bank of Bangladesh which makes small unsecured loans to the
very poor to help them start businesses and work their way out of
poverty.  Grameen works closely with its borrowers to help them
become successful.  By lending to groups, and requiring that the
first few people in the group begin to pay back their loan before
Grameen lends to the others in the group, Grameen creates social
pressure on people to pay back their debts.  Ultimately, Grameen’s
loan policy comes down to trusting the people they lend to, and so far
Grameen’s trust has been warranted as they have a very low rate of
default and numerous success stories. 
Rosedale believes that Grameen’s trust based model of lending
can be applied in Second Life and that fear of being ostracized by the
Second Life Community will ensure that banks like Ginko behave
ethically.  However, Rosedale has things backwards. Grameen makes
no secret of who they are, what they are, or how the bank works.
Grameen is the one who trusts that borrowers will repay their loans.
The risk is borne entirely by Grameen and the relationship between
Grameen and its borrowers is a close and active one.  Ginko is the
exact opposite. Rather than Ginko trusting borrowers, depositors trust
Ginko. They are the ones bearing all of the risk as their deposits are
not insured, Ginko is completely unregulated, and none of the
depositors know who is behind Ginko or how the bank makes money. 
Unlike the people who Grameen lends to who cannot simply leave with
Grameen’s money, there is nothing stopping someone like Portocarreo
from simply taking people’s money and shutting off his Second Life
account. In his Reuters interview, Portocarreo stated “ [w]e keep a
[Linden Dollar] reserve of about 5%, sometimes less . . .”  This
means that at least 95 percent of the Linden Dollar deposits
Portocarreo has received have been converted to real currency. As
depositors have no idea what Ginko does with their money, it is
possible that Portocarrero has spent the money or transferred it to a
location unreachable by U.S. creditors.
Given Ginko’s complete lack of transparency, if it turned out
to be a swindle, it would be very hard for depositors to track down the
person or persons behind it. Even if they were found, there is no
guarantee that depositors would be able to obtain redress. If this
were to occur, it is likely that the depositors would sue Linden Lab
for not protecting them from fraud. By not taking efforts to ensure
that commercial activity in Second Life is conducted in a transparent
manner, Linden Lab is in essence putting their stamp of approval on
ventures like Ginko. Linden Lab of course absolves itself of any
liability for the actions of Second Life users in its Terms of Service
Agreement, but there is no guarantee that the Terms of Service
Agreement will hold up in court.  If a court determines that
Linden Lab is liable for fraudulent activities that take place within
Second Life, they may be overwhelmed with suits. To avoid liability,
and governmental regulation of the commercial activities within Second
Life, Linden Lab should develop rules and policies that ensure
commercial transactions between users are transparent and legitimate.
 Second Life, What is Second Life?, http://secondlife.com/whatis/ (last visited Feb. 12, 2007); Second Life, Create an Avatar, http://secondlife.com/whatis/avatar.php (last visited Feb. 12, 2007).
 Second Life, Create an Avatar, http://secondlife.com/whatis/avatar.php (last visited Feb. 12, 2007).
 Second Life, What is Second Life?, http://secondlife.com/whatis/ (last visited Feb. 12, 2007).
 See Id.
 Second Life, Create Anything, http://secondlife.com/whatis/create.php (last visited Feb. 12, 2007).
 See Second Life, The Creations, http://secondlife.com/whatis/creations.php (last visited Feb. 12, 2007).
 See Second Life, Economy, http://secondlife.com/whatis/economy.php (last visited Feb. 12, 2007).
 Second Life, Membership Plans, http://secondlife.com/whatis/plans.php (last visited Feb. 12, 2007).
 Second Life, Own Virtual Land, http://secondlife.com/whatis/land.php (last visited Feb. 12, 2007).
 Adam Reuters, Ginko Financial – Pioneer or Pyramid?, Reuters Second Life News Center, Oct. 15, 2006, http://www.secondlife.reuters.com/stories/2006/10/15/ginko-financial-pioneer-or-pyramid.
 Ginko Financial, http://ginkofinancial.com (last visited Feb. 12, 2007); Second Life, LindeX Market Data, http://secondlife.com/whatis/economy-market.php (last visited Feb. 11, 2007).
 Reuters, supra note 10; (Ginko recently lowered its daily interest rate from 0.10 to 0.09).
 Adam Reuters, INTERVIEW: Ginko CEO Nicholas Portocarrero, Reuters Second Life News Center, Oct. 12, 2006, http://www.secondlife.reuters.com/stories/2006/10/12/nicholas-portocarrero/.
 Ginko Financial, About Us, http://ginkofinancial.com/aboutus.php (last visited Feb. 12, 2007).
 Reuters, supra note 10.
 Reuters, supra note 15.
 See Reuters, supra note 10.
 Reuters, supra note 10.
 Reuters, supra note 10; Grameen Bank, Breaking the Vicious Cycle of Poverty Through Microcredit, http://www.grameen-info.org/bank/bcycle.html (last visited Feb. 12, 2007).
 Grameen Bank, Breaking the Vicious Cycle of Poverty Through Microcredit, http://www.grameen-info.org/bank/bcycle.html (last visited Feb. 12, 2007).
 Reuters, supra note 10.
 Grameen, supra note 29.
 Reuters, supra note 10.
 Reuters, supra note 15.
 Second Life, Terms of Service, http://secondlife.com/corporate/tos.php (last visited Feb. 12, 2007).
October 5 2006, 02:42
Should the concept of movie rentals via the internet be protected by a patent? Netflix, Inc. seems to think so. That is what prompted them to sue Blockbuster, Inc. for infringing their patents by starting up Blockbuster Online. But Blockbuster thinks Netflix has invalid patents and that the monopolization of the online movie rental business would not be fair. These are the issues that recently came up in Netflix, Inc. v. Blockbuster, Inc. . [More]
April 11 2006, 15:56
Before the Internet became popular, homebuyers had to spend days touring dozens of homes pre-selected by their real estate agent, and were often forced to settle on a home that was merely satisfactory. Now individuals can shop online for homes, take virtual tours of homes, and even list their homes for sale online without ever stepping foot inside an agent's office. The Internet provides what previously could only be provided by an agent: a direct connection between buyers and sellers, thus eliminating the need for a middleman that charges a pricey commission. In this age of technology though, some argue that the middleman can never be entirely replaced by the Internet. [More]