At a conference focused on video games and the law presented jointly by the law schools of NYU and Yale, the legal grey area of intellectual property and ownership of in-game items by participants has been examined by numerous presenters. The sale of credits and items between players in virtual worlds is fairly common, though standard property law doesn’t quite cover virtual property and companies running these games may also have rights to the contents inside their games.

Given those thorny issues, we were happy to hear the founder and CEO of Linden Lab, Philip Rosedale, announce that their multi-player online game Second Life has changed its Terms of Service (TOS) to transfer all copyright and intellectual property rights to users for any content they create within the game. Linden Lab also specifically allows for game content to be licensed by users under Creative Commons, so those items can be freely shared among players.

Here’s a good summary of the legal changes to Second Life’s TOS and our press release announcing this milestone event for gaming.