I spotted this several weeks ago in Wired magazine, but have only just gotten around to taking it in fully. The scenario:
Businesses in Second Life are in an uproar over a rogue [ed. note: modified from Open Source] software program that duplicates “in world” items. They should be. But the havoc sewn by Copybot promises to transform the virtual word into a bold experiment in protecting creative work without the blunt instrument of copyright law.
Linden Labs, the owners of Second Life, decided against employing DRM (which “won’t work”) or adjudicating copyright disputes themselves, but instead have added creator and creation-date indicators to all items.
The next phase of Linden’s response is more interesting. The company plans to develop an infrastructure to enable Second Life residents and landowners to enforce IP-related covenants within certain areas, or as a prerequisite for joining certain groups. In effect, Second Life’s inhabitants will self-police their world, according to rules and social norms they develop themselves.
There are some interesting comments in the full article about the innovation incentive value of copyright, and the possible success of social norms as against enforcible law as a means of controlling this.