Back in August, Linden Lab updated the Second Life Terms of Service. Supposedly, this was done to make the TOS congruent across all of LL's products (they make some apps besides Second Life, such as Creatorverse and Block World.)
In particular, the changes to the intellectual property section has caused quite a stir among the creative community of SL. For your convenience, here is the controversial wording:
2.3 You grant Linden Lab certain licenses to your User Content.
(4 paragraphs omitted)
otherwise described in any Additional Terms (such as a contest’s
official rules) which will govern the submission of your User Content,
you hereby grant to Linden Lab, and you agree to grant to Linden Lab,
the non-exclusive, unrestricted, unconditional, unlimited, worldwide,
irrevocable, perpetual, and cost-free right and license to use, copy,
record, distribute, reproduce, disclose, sell, re-sell, sublicense
(through multiple levels), modify, display, publicly perform, transmit,
publish, broadcast, translate, make derivative works of, and otherwise
exploit in any manner whatsoever, all or any portion of your User
Content (and derivative works thereof), for any purpose whatsoever in
all formats, on or through any media, software, formula, or medium now
known or hereafter developed, and with any technology or devices now
known or hereafter developed, and to advertise, market, and promote the
same. You agree that the license includes the right to copy, analyze and
use any of your Content as Linden Lab may deem necessary or desirable
for purposes of debugging, testing, or providing support or development
services in connection with the Service and future improvements to the
Service. The license granted in this Section 2.3 is referred to as the
"Service Content License."
(One paragraph omitted)
The entire TOS can be read here: http://lindenlab.com/tos
Wow, pretty sweeping, isn't it? Any normally intelligent person reading that would conclude that LL is claiming all rights to your creations, to do anything they wish. And that's what has the creative community up in arms.
Linden Lab has countered these concerns, in unofficial forums like Office Hours, saying that 1) these are standard terms for a service provider, and 2) they are necessary to allow your content to exist on the service and for LL to be able to provide it to others. (By "provide", I don't mean "give it away." I mean, the process of, say, you putting an item for sale in your store, having someone come in, buy it, and then wear it.)
But a lot of people are not buying that story. A number of creators have stopped offering their wares in SL. Others have left Second Life entirely. One of the most notable and recent departures is Qarl Fizz. You can catch his short rant against LL here: http://www.qarl.com/qLab/?p=89 What's important about this is that Qarl is a former Linden employee. Surely he would know how the Lab operates, what their legal department is like, and whether they can be trusted.
Other blog posts about this controversy can be found by googling "Second Life Terms of Service Change August 2013."
There is a panel discussion among creators and lawyers on this topic this coming Saturday, October 19, at 1000 am Second Life time. Get the particulars here: http://insertfunnyname.wordpress.com/2013/10/15/second-life-terms-of-service-a-legal-panel/
For a service that depends so heavily for its success on its residents, I must say the change looks like LL shooting themselves in the foot again. The original marketing slogans for SL were "Your World, Your Imagination" and "SL -- a world created by its residents." If the creative people that made Second Life what it is (and that's NOT Linden Lab!) leave, Second Life will die.
If you create or sell anything in Second Life, you should keep up to date on this issue. And, if you have a lot of content, you may want to consider pulling out and setting up on another grid. I won't be doing that, I have too much emotional capital invested here, and not many original works at risk. But Your Mileage May Vary.