New Copyright Threat Warning

As long as it doesn't circumvent DRM, and it doesn't involve making any new copies that exist outside the system, it wouldn't be illegal. But unless more layers are added to the avatar, there's no way to satisfy both those requirements, unfortunately.

Just because the viewer is open source doesn't mean you get a free ride to make it do anything you want. Any variations are required to operate within certain parameters, not the least of which is compliance with the law. You can't alter it to break the law, and then argue that it's OK because breaking the law was its normal function. That would be lunacy, as I'm sure you already know.



There's nothing "open minded" or "closed minded" about it. It's a matter of established facts, nothing more, nothing less. As I've said so many times already, READ THE LAW. Once you've done that, then we'll have something to talk about. Until you do, there's no way we can possibly be on the same level for intelligent discussion. Right now you're speaking from a point of really embarrassing ignorance, whether you realize it or not.

If you truly want to get into a debate about closed-mindedness, then let me ask you, who's more closed-minded, one who has educated him/herself thoroughly on a topic by reading the applicable laws, or one who stubbornly refuses to read such things just so he/she can enter into an argument based on his/her gut feelings about how things should be instead of how things actually are? I'd say refusal of education is the very definition of closed-mindedness, wouldn't you?



What?! I can scarcely think what to make of that statement, it's so utterly ridiculous. Was that your attempt at a joke, are you somehow completely lacking in reading comprehension skills, or have you decided just to ignore everything I've written so you can make up your own version of the discussion thus far? Or is it that you think you can rattle me by inventing such inane things?

First none of this is or has been about stifling creativity in any way, from anyone, on either side of the debate, least of all from me. We ALL want to encourage creativity as much as we possibly can. But as I've said time and time again, that doesn't give anyone the right to break the law, or to steal anyone else's IP.

It's not about whether skins and tattoos SHOULD be combinable. We all agree that they should. It's about the method by which it's done. Were LL to implement a legal means to do it, we'd all rejoice, as I've said at least a dozen times in this thread, and hundreds of times elsewhere. But as of yet, they haven't. So the ONLY way to do it is to break the law. It's unfortunate, but it is the way it is.

Faced with the choice of living without a particular luxury or breaking the law in order to have it, the right thing to do is to live without it. Should I quote Moses? (Or at least the movie version of Moses) "None of us can break the law. We can only break ourselves upon it."

Second, not that it's in any way relevant, but of course I thought of it. We've all thought of it. But most of us have the good sense not to act on every last thought we have.

Some of us have been lobbying LL for years to revamp the avatar in order to make stuff like this legally possible, since long before the first mention of these kinds of DRM circumvention techniques were ever discussed publicly in the community. How could we have been doing that if we'd never thought of it?

You want me to come up with a date for when it first occurred to me that this kind of thing could be done? I can give you one. It was January 16, 2004, about five minutes after I entered SL for the first time. You see, to those of us who already have experience with graphics, these things are no great mystery, and it comes as no surprise when people exploit them. But again, just because it's obvious or expected doesn't make it right.

Third, if I might endulge your fantasy for a minute, let's say I really did want to do this, but I had thought of it second instead of first, as you're trying to claim? How would that make any difference? How could the mere fact that someone else already happened to have been doing the same thing possibly stop me from doing it myself? And why in the world would I then see fit to argue against it as I have? I can promise you, if I wanted to do such a thing, I'd just do it, and I would have begun doing it five years ago.

I would have thought my reason for not doing it is rather obvious by now. It's exactly the same reason I've been stating all this time for why NO ONE should do it. It's illegal, plain and simple.




This appears to be more evidence that you didn't bother to read at least 90% of this thread. We've been through this thoroughly already. One more time, here's why it's illegal (abridged version):

1. It circumvents digital rights management (DRM). That is an absolutely clear violation of the Digital Millenium Copyright Act (DMCA). I provided a link to the full text of this law in an earlier post. Please read it. (Note, it's also a violation of the WIPO treaty. More on this below.)

2. It involves making unauthorized copies, without the author's permission, which is a violation of the Copyright Act. It doesn't matter whether he keeps the copies or not. The act of making them in the first place is illegal in and of itself. (Note, it's also a violation of the Berne Convention. Again, more on this below.)

3. He's distributing the copies to a third party. This is a further violation of the Copyright Act. (Berne Convention, as well, again)




No, he's not "just doing what the viewer does". The viewer doesn't spit out copies of source textures from skins other people are wearing, to your hard drive. The viewer doesn't upload new copies of other people's textures to SL, with unrestricted permissions.




One more time, did you read the thread? There are two reasons you are required to abide by the DMCA:

1. Nearly all countries in the world are bound to respect each other's copyright laws, and have been for a very long time. Read the Berne Convention, the Universal Copyright Convention, the Agreement on Trade-Related Aspects of Intellectual Property Rights, and the WIPO treaties, if you don't believe me. It's all right there in black and white.

All members of the Berne Union (which includes all nations on Earth, except for about a dozen small countries in Africa, the Middle East, and Southeast Asia) are required to honor the copyright laws of whatever country a work was published in. So if a work was published in the US, all citizens of all member nations are required to abide by US copyright law with respect to that work. If a work was first published in France, then all citizens of all member nations are required to abide by French copyright law with respect to that work. If a work was published in England... well, I think you get the idea.

Further, WIPO includes 184 of the 190-some countries on this planet. You can read the full list at http://www.wipo.int/members/en/ . Among other things, that means there's a 97% chance that you are prohibited from circumventing DRM, because the WIPO treaty itself includes that stipulation, regardless of DMCA.

The reason we tend to talk about DMCA instead of WIPO here is simply because DMCA is specifically mentioned in the SL TOS. DMCA would not strictly be necessary, since WIPO makes it redundant, but since we all agreed to the TOS, DMCA is the relevant document for such concerns in SL. Also DMCA happens to be what entered the US into WIPO.

For those who live in Europe, the European Council entered you into WIPO via Directives 91/250/EC, 96/9/EC, and 2001/29/EC, among others. (Note, I'm not well versed in European law, so if I got any of those directive numbers wrong hopefully someone will correct me. The important thing is that all members of the European Union are also members of WIPO). As for Africa, Asia, and Australia, South America, Canada, and Mexico, I don't know the actual names of the relevant laws for each country, of course, but I do know that almost all countries in the world are WIPO members.

2. When you signed up for SL, you agreed to abide by the laws of the state of California. That includes any and all US federal laws which rule over that state. DMCA applies to all residents of Second Life, whether they are US citizens or not.



Bottom line, next time before you decide you're "not breaking the law because ______", how about you go ahead and actually read the law? Ignorance is not a defense.

If you're too lazy to read the law yourself, consult a competent intellectual property lawyer, and ask what you're about to do is legal or not.

I was wondering if anyone has ever successfully used the DMCA to accomplish anything in the SL marketplace. I can't find anything via Google, only DMCA threats but mostly based on misunderstandings and the recipient not knowing the process and how to respond so they just comply instead of filling out a free form to put punt the ball of responsibility back to the accuser.

Since, in this case, the accuser would have to spend RL money on a scale that would likely cost every spacebuck they would ever make on SL over a single item just to get to the point of going to court.

Being the butt end of a blanket lawsuit in the past, I was able to spend about a thousand dollars to cause the accusing party to spend over $10k, only for them to finally have to drop the suit due to what it was costing with no guaranteed outcome.

Crafty, are you wondering just out of pure intellectual curiosity, or are you trying to imply that it's OK to break the law because it's unlikely you'd be successfully sued/prosecuted over it?

In any case, here's at least one example of exactly what you asked about:

http://slnn.com/index.php?SCREEN=article&about=serpentine-wins-moral-victory

Stroker Serpentine sued another SL user for copyright infringement, and won. There were no monetary damages awarded, but money obviously is not the only thing these cases are about.

Relax. It's curiosity. If you've been through the legal system before, you wonder when you see people playing Internet forum lawyer what they are basing it on, aside from other Internet forum lawyers. As with any discussion, it's more about wishing to hear citations rather than abstract assumptions, especially when it comes to DMCA-related discussion.

I appreciate the link, though, "fifty year old man with legal representation versus a teenager who does not understand the importance of hiring a lawyer" isn't really what I was looking for. The only precedent set there has already been established, and that is "get a lawyer".

Actually the precedent that was set was far more important than just "get a lawyer". I'd say it sends a pretty clear message that copyright with respect to virtual items is just as real, and must be taken just as seriously, as copyright on real-world items. Second, it demonstrated quite effectively that offenders cannot hide behind the anonymity of the Internet, and that their actions do have real consequences.

The fact that the offender turned out to be significantly younger than the victim doesn't change that in any way. Both parties are adults. While it's true that one happens to be a responsible business man and provider for his family, and the other happens to be young and irresponsible criminal who, among his various crimes, also (allegedly) had committed several previous acts of online fraud, that has no bearing on the facts of the case itself. All that is relevant is that one party infringed on the other's copyrights, and was subsequently ordered to stop by a court. That's it.

I'm wondering how this is not what you were looking for. You asked for a case in which "DMCA was used to accomplish anything in the SL market place". This case fits that description perfectly. Someone who makes his RL living by selling virtual goods in SL was successfully able to utilize legal means to have illegitimate copies of said goods removed from the market. Seems to me, that's exactly what you asked for.

No, I am asking for a citation where both the accuser and the defendant got representation. Yes, very much so, it does matter. Again, this doesn't set any precedent since the kid went in without a lawyer. That simple fact changes everything. It's damn near a guaranteed loss in this legal system. Age plays a role since the kid's wiring obviously wasn't mature enough to see this fact, thus why I mentioned it.

Most interesting would be someone who has sued from inside the US and forced compliance in someplace like Brazil.

Now, if someone wants to cite something instead of giving me long winded, defensive, argumentative replies, please do. Otherwise, move on. Get some fresh air. Drink decaf. Hug a friend.

Three paragraphs was "long winded"? Perhaps you should lay off that decaf, and move up to the real thing, so you'll be able to stay awake the whole 50-60 seconds it should have taken you to read that.*

And it certainly wasn't meant to be "defensive" in any way. First, I wasn't under attack, so "defense" wouldn't even have been possible. Second, what possible reason would I have had to "defend" anything at all with regard to the case we've been discussing? I have no stake in whether or not you think think the answer I provided was the one you were looking for when you asked the question. All I was going on was the letter of what you actually wrote. You'd do well to do me the same courtesy. Take it for what it is.

As for "argumentative", you're free to interpret it that way if you so choose, but I'm really not sure where you're getting that vibe. All I was doing was attempting to answer the question you asked, as you had worded it. When you said the answer wasn't the kind of response you had wanted, I made a small attempt to show why it fit the description of what you had in fact said you were looking for, and then I asked you to explain why you felt it didn't. That's it.

If you think that amounts to arguing, I shudder to think what would happen were we to engage in a real quarrel. By the sound of it, you might not survive it, so let's make it a point not to go there.



*Time estimate based on the established average English language reading speed for adults of 250-300 words per minute, over the 244 words that were in the post.

Survive? As in "gets bored and reads something else" then yes, I would certainly die a horrible E-death. *flop flop*

Suggesting hopes that this is for intellectual pursuit as opposed to advocacy of illegal acts and saying legal precedent is being set by a case where there is no defense is not really the best way to get things started. It's just a way to keep typing what you think. I'm just after examples, ones a future judge might review for help in making a decision in future cases.

Please don't put words in my mouth. I never said any legal precedent was set. I used the word "precedent" in exactly the same context that you did. Clearly when you said "The only precedent set there has already been established, and that is 'get a lawyer'", you weren't talking about the legal definition of the word. You quite obviously were using the term loosely, speaking anecdotally. I would have thought it was equally obvious that I was doing exactly the same thing, simply responding in kind.

My reason for questioning your motives in your first post was simply because several people in this thread have already played the "if you can get away with it, it's not wrong" card. I wanted to see if you were yet another one of those unfortunates or not.

I think you know all that, though. At this point, the evidence would suggest that for some reason you're bent on creating an argument where none exists. That's kind of a silly pursuit, don't you think?

Just to recap: this particular unfortunate takes the view that if no harm is done to another individual through theft and redistribution of his or her work, then no wrong has been done at all.

In the case you refer to, Stroker Serpentine took action against someone who was copying and redistributing his work, thereby threatening his livelihood from SL, and the case wasn't very well contested by the defendant since he didn't get a lawyer. My opinion is that Serpentine would have won regardless of whether or not the defendant had legal representation since ripping off another resident's work to make a profit is plainly wrong.

Nevertheless, a creator would need strong evidence that his or her work is being stolen and redistributed or sold by another resident to be justified in filing a DMCA suit - by 'justified' I mean having a case as opposed to feeling indignant that someone has had the temerity to alter his or her work to suit themselves. However rebaking/altering a texture to suit one's personal use may be defined according to the letter of the law, it exercises and even insults common sense to suggest that it is criminal behaviour.

Crafty appears to be considering the argument from a similar point of view: until such an instance is tested by two lawyers in court, any argument based on DMCA is specious in this respect.

The much quoted TOS make it clear that Linden Labs will not get involved in disputes between residents and that a DMCA suit is required to effect action against another resident suspected of infringing copyright. The DMCA FAQ says:

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Basically, anyone seeking to curtail copying of his or her work will need a very good reason before they begin to plough another resident through the DMCA process. Getting on a high horse about it just will not be enough.

Circumventing DRM is not illegal in my country, and SL's terms of service are not a law.

Given that SL stores textures un-enciphered in your cache folder, I challenge you to explain what DRM I'd be circumventing by accessing these files in ways not currently possible with the default viewer.

If I move my cache to a different hard drive, or if I copy paste my entire cache from my ram drive to my hard drive, thereby making a copy of all those textures, would you say I'm violating the DMCA?




Again I reiterate, me making the viewer save textures to my hard drive is not in any way illegal, nor does it break the terms of the license I agreed to when I downloaded the viewer source code.

While the DMCA might play a part in SL's terms of service, breaking the terms of service is not illegal.

Any modification I make to the viewer (Within reason) is perfectly "legal" in terms of law. Furthermore, as LL has stated time and time again that users may access the service with any client they wish -See Libsecondlife, Sleek, SLiM, Onrez- all at one time endorsed by LL.

If I were to write a client that used .avm as it's animation format, .tga as the texture format and .wav as the sound format, I wouldn't be breaking the Terms of Service in any way, that would be perfectly acceptable.




I have read section 1201 of the DMCA, I'm also aware of what the definition of DRM is, and what constitutes DRM protected media.

A texture that is sent to my computer in a commonly readable format is copyright protected yes, but it is not DRM protected.

Now, if I were to invoke the hack allowing me to transfer no transfer objects to people in a modified client, I agree fully with your point, I'd be circumventing the established DRM protocols.




You're throwing out terms like "Illegal" and "against the law" again, forgetting that we don't all live in a country where this law applies.

As for the SecondLife terms of service, again I state that I am not in any way circumventing any established DRM protocols, I'm taking information made openly available to me, with no cipher or encryption, textures which are streamed in j2c format to my computer, a format I can open in photoshop. (Possibly requiring a plugin depending on program version.)





Actually the viewer does store that data in cache, several viewers have been made that allow you to view people's pre-baked clothing and skin textures through dialog boxes much like you'd view your own.

If that data wasn't streamed to the client, it wouldn't be possible to view it. I won't get into viewer names on a public forum because the last thing we need are unscrupulous people having these capabilities, but I'd be more than happy to point out how it works if you contact me in SL.




The WIPO treaty has stipulations against circumventing established DRM protocols FOR THE PURPOSE of piracy, it in no way prevents legitimate circumvention for creative or other non-copyright infringing purposes. If you're going to accuse me of not reading the applicable laws, at least understand them yourself.

You're right, my mistake, I didn't read the thread entirely, when I hit your post I hit reply and quickly skimmed the rest of your responses. I apologize for the allegations I made earlier.

I don't know about the technical legal position and don't care since I'm not involved in any way but as a person free to make purchasing and other social decisions based on whatever criteria appeal to my conscience or whimsy, provided I stay within the law myself, I must say that anyone getting this anal about their IP will never get ANY business from me. Shunning is legal and I'd shun them to the max. Mute them and ban them from any land I manage. It is this sort of over the top abuse of the concept that threatens the continued legal status of IP and drives the anti-IP movement. As a matter of political philosophy I haven't quite been that radicalized YET. But between all the patents granted in the last decade or two for items clearly falling in the "obvious to a practicioner of the art" category, the record industry's insane prosecutions, and the author's union's successful pressuring of Amazon re Kindal's TTS feature - I have reached the point that if the choice had to be between the present legal system and no IP protection AT ALL (and there is a significant political movement in that direction) I'd favor none. So think twice before you take the scorched earth approach to IP defense. At the very least you risk significant loss of good will from potential customers and in the long run you contribute to the political reaction that puts the whole IP system at risk.

As a member of the real word judicial community, the process described by th OP is 100% legal. It is a service and is NOT a product. Also if there is at least 3 points of the new product that is different that the original product it is considered an entirely new product. Further, if you (the OP) is that concerned over your products or creations, you should go file a patent on them. That way if you want to press any charge, you can certainly argue it before a district court.

Well if skin makers provided this service themselves there wouldn't be a need for this, otherwise perhaps you should put a big sign in your store stating that you don't allow your skins to be tatooed and don't provide such service, so customers can look for a seller who does?
Maybe you should find a tatoo artist like this guy you can trust, provide contact details to your customers and embrace the shared added sales you can both make from such a service instead of trying to make tatooing skins impossible for your customers.
It's no different in my view than buying a painting or poster from someone then paying a friend to draw on it with a texta pen.

Every time it looks as if this thread has finally died a merciful death, it pops back to ..... well, not exactly life. Nobody has said anything new since day Two. It's a zombie thread. Let it die .... please?

Oh brother. Not this thing again.

Okay, I've held my peace until now. But tonight I'm sick and cranky, and there are some points that keep being made which are, quite simply, mistaken. This isn't my opinion, guys. This is from the US Copyright Law site, http://www.copyright.gov/help/faq/faq-fairuse.html Please go and read it.

It doesn't matter in the least whether or not you, or I, or anyone else reading this thread agrees or disagrees with this. It's the law in the US, which is where all the various things that are associated with SL originate, since that's where the servers are. Therefore, that's the law that applies in this case.

All of this discussion has been about Fair Use.

I'm quoting directly from the website, here.



There it is. Nothing about "for your own personal use." Sorry, but it's simply not there. Yes, that's what most people think it means; but most people happen to be wrong.

You can read more at http://www.copyright.gov/fls/fl102.html



Once again, pretty clear cut. Nothing about 3 things, or 30%, or anything else. No matter how much you change a copyrighted piece of work, it still belongs to the copyright owner.



Again, you might notice that there is nothing in there about the person who infringes the copyright making a single cent, or harming the copyright holder in any way. Those are statutory damages, folks. If you take things you have no right to, you are also taking a huge risk. Agree or not, that's the law. Period.

Fortunately, all of us have given you permission to download our works in order to view them. That's part of the TOS. However, we haven't given you permission to do anything else with them, unless you have contacted us for that permission.

Once again, you might be tempted to argue that this is not the way it *should* be, and you might get a lot of people to agree with you (or not) but I'm afraid none of that matters in the least. However you think it should be, this is how it *is*.

One last note about DMCA. When you file a DMCA Takedown with Linden Lab, you don't have to have any proof that the thing in question is yours. DMCA provides a "safe harbor," and Linden Lab takes advantage of it. If you file one, with all the necessary portions in place, Linden Lab will remove the content. They will also notify the owner of the object in question, so they can file a counter-claim.

So, you ask, what's to prevent you from just filing false DMCAs to put your competitors out of business? This; the penalty for doing so can be quite severe, with damages and legal fees in the tens of thousands of dollars. (Linden Lab might also ban you, if you do this kind of thing too often. )

Read more about the DMCA as it applies to SL at http://secondlife.com/corporate/dmca.php

So, that's that. None of this is subject to any kind of debate. It's simply the law.

Okay? Enough already?

As evidenced by the case about decrypting region codes on DVDs and the case of the Norwegian Consumer Council vs Apple iTunes Store, you are not allowed to take these common consumer rights away from, say, Scandinavian customers in the first place, even if you're selling from a US-based company and/or server, so no, I do *not* have to contact you for instructions on how I can use what I've bought.

If I buy a picture, it is perfectly legal for me to draw pixels on top of it and show it to others. That has *nothing* to do with copyright or even fair-use.
The only possible copyright issue is that you could consider the uploading to others' viewer cache for showing it an illegal distribution of the (modified) work, but if so, you're also implicitly saying that uploading the *unmodified* skin is an illegal distribution. Copyright-wise, there is *no* difference between a picture with or without me drawing on top of it.

The DRM-related parts of the DMCA may deny me access to the picture in a format I can actually use for drawing, but that is a US law, which is in *explicit contradiction* to European consumer rights laws, and again, has nothing to do with actual copyright of the work.
We Europeans have, however, agreed to taking on this additional restriction by agreeing to the ToS.
Also, it doesn't matter how *easy* it is to circumvent the DRM (by reading the client cache); it is obviously meant as a DRM system, and as such granted status as such under DMCA.

So it may "simply be the law" for US residents. The rest of us have merely chosen to forfeit rights we have *under the law*, for the privilege of using LL's system, under their ToS.

I think that the majority of all people slinging the word copyright like a sword, should first know what a copyright actually means and what is copyrightable material and what is not.

Then go look in the mirror and tell yourself that you are truly a great artist over and over again until you believe it, because you now know how to push a button on a camera.

The compulsory license in the Second Life Terms of Service allows Linden Labs to distribute the work within the Second Life service. It does not grant a third party the right to upload a modified version for further distribution, whether in SL or in another service.

Obviously, LL needs to include this "we can distribute the bits for you", just like, say, any web hosting service. That license grant is obvious.
But part of this whole discussion is whether you see deals between *residents* as "buying" and "owning" products (which then, in turn, is distributed by LL under the aforementioned necessary license as infrastructure provider), or merely as a license to reference an instance still owned and controlled by the supposed "seller".

I'd argue that all terminology (and precedence in, say, selling digital music) points to actual sale of a product. -Which would be governed under both copyright laws, in that you cannot redistribute, and consumer rights, in that you can mangle what you own as badly as you want. It is, for example, perfectly ok for me to chop up the mp3 I've bought and play it backwards, under exactly the same terms as I can play it forwards. (Though again, the DMCA may deny US residents the technical ability to do so).

Robin Sojourner's "We have not given you permission to do anything else" points to an interpretation as a limited license grant. Those can in principle be under any terms the parts can agree to, though even that is a little fuzzy, in that there are certain rights you cannot claim/sign away no matter what is written. (As per challenging one-sided ToS'es, even if you agreed to them).

SL TOS disallows patenting inworld content.

The service violates SL TOS because it violates the DMCA provision that disallows circumventing protection schemes, and that's exactly what the service is doing. This is pretty simple:

1) SL TOS specifically states that DMCA must be adhered to. Is there any question about that? No.

2) DMCA quite clearly states that attempts to circumvent copyright protection mechanims are illegal. Personally, I hope that this overly broad claim will be found to be unconstitutional. But currently, it stands as part of the law.

3) The service clearly and specifically circumvents the letter, if not the spirit, of the SL permissions scheme, which is a copyright protection scheme.

I'm not making a moral claim here. I feel that this kind of service is perfectly reasonable, except for the fact that users of the service could use it to obtain illegal copies, and there's no way the service provider could reasonably protect against that. Note that when this was pointed out, the service provider volunteered to quit providing the service, which argues that he was behaving ethically.

I think we should have the right to modify copies of copyrighted works. Content creators who try to argue against this are simply whining and trying to protect what isn't really theirs. However, content creators that object to the TOS violation are entirely within their rights to do so.

I understand the reason for the controversy here. Both sides have valid arguments. However, those who argue against it have the SL TOS on their side, and like it or not, that's a trump card. It doesn't matter where you live, only whether you intend to follow the SL TOS or to risk violating it.

I believe that Argent's argument above would also carry a lot of weight in a lawsuit.

The following arguments are more or less beside the point, since the above is what counts. Nevertheless:

US copyright law includes more than the statutes; it also includes precedent from case law. The ability to make personal copies is a well-established precedent. It's not clear that this precedent applies here, since the personal copy isn't for backup purposes, and it's being made by a 3rd party. But, it might apply, since the *intent* is for for personal use and modification, and NOT for redistribution. I'm confident we could get top flight legal opinions on both sides here, and different competent, ethical judges would be likely to rule in different ways for a variety of reasons.

Copyright law allows use of a copyrighted work if it's substantially altered (i.e., beyond recognition). That doesn't apply here.

Yes you have. You've implicitly given us permission to overlay other images on top of them, such as wearing clothing. Furthermore, a copyright owner doesn't have the right to limit unconditionally what can be done with a copyrighted work. We can burn them if we like. (Some Euro countries have laws that argue against this, but they generally apply to recognized masterpieces, not mere commercial art. I can burn my Campbell's Soup can label, or write on it with a marker, and Campbell's can't come after me with a copyright violation claim.

In any case, it's not US copyright law per-se that matters, but SL's TOS, which is more restrictive, and applies regardless of what country you live in, at least until a lawsuit proves otherwise and LL is required to amend or reinterpret it.

Yes, but there are restrictions on what you can do with it afterwards. You can't redistribute it, and redistributing it is what you're doing when you upload it to SL.

I'm not saying the law is *right* ... I find Lessig's arguments in "Free Culture" quite compelling. I'm just pointing out that's what it *is*.

Even without that it's still redistributing derived works without a license to do so.

Good point, though I think it's arguable whether uploading the derived work is effectively "redistributing". That is, good attorneys could make good arguments for both sides of this case, and good judges could rule either way.

Your position is rather easily argued form a technical fact point of view: the bits get distributed. A counterargument would involve taking into account the social reality of SL, pointing out the the kind of redistribution caused by, say, wearing a shirt, is NOT "distribution", and this argument is corroborated by the way that LL permissions work. The circumvention involved in ripping the texture, uploading it, and transferring it to the original owner are technical and necessary only for the purpose of providing a reasonable service that (arguably) is not enjoined by the copyright holder's rights. I admit it's a more difficult argument, but case law is full of such, where intent and consequences are more important than the letter of the law.

My counterargument fails because of the ability of the service user to use the service for clearly illegal purposes, as pointed out by Nyoko. However, this caveat doesn't apply to someone using the same technique by and for themselves.

I doubt there's any argument about whether it's a TOS violation, whether done as a service or for oneself.

I believe this is factually incorrect on two points, but I'll need to consult my patent attorney (my father ) to make sure.

You can't claim copyright in someone else's work. No argument.

You don't need permission from a copyright owner to create a new version of that work, but you do need permission to distribute it. I believe this factual error is merely a case of bad communications.

The "no matter how much you change it" part is not true either, according to my understanding of a fairly deep discussion of just this matter with my father. I was actually surprised to learn from him that if a work is sufficiently distorted, copyright doesn't apply. He also pointed out that it mattered how central the copyrighted material was to the result. I don't remember the specific legal terms he used or the examples he mentioned, so I'll have to ask again and then do a little research to back it up.

Clearly, though, I'm challenging the US government website, which should be considered the authority here, so the burden is on me to prove my claim.

I think that might be arguable for personal use, yes. But we're not talking about that.
The highlighted words make it explicitly redistribution. That's what killed the original MP3.com's scheme to let people "rip" CDs on computers that weren't up to the job of doing the ripping themselves... even though they only let you download music they could verify you owned by putting the original CD ib the slot, the owner wasn't copying it from that CD... they were downloading a copy from MP3.com.
Actually, that's not much of an issue since the Betamax decision... IF the service had a substantial non-infringing use. Alas, as a service it doesn't. If they sold a program you could run on your computer to perform the same operations without them actually making the copy and transferring it to you, that would be a different matter.