The Second Life blogosphere is igniting with the news that the listing guidelines for Second Life’s marketplace, xStreetSL, have been tightened up.

Essentially, it’s now prohibited to sell any virtual goods that resemble a real-world brand. That’s no shock and probably reasonable. The contention is over the ban on avatars that resemble actual celebrities. It’s a pretty silly ruling that’ll be essentially unenforceable outside of the xStreetSL website. Admittedly, protecting brands is a balancing act for any company, but this appears to be an over-protective move.

Let me throw out another conundrum likely to occur in the future as a result of this decision. Let’s say an avatar becomes a celebrity in its own right. Its shape, clothing and skin may have been created from scratch or different aspects purchased from vendors. Could said avatar argue they are now a brand and prevent people creating avatars that resemble them? Avatars-as-brands well and truly exist now – it’s the policy developments like these that continue to push well beyond the traditional boundaries of intellectual property law. It’s going to take some serious legislative work in the medium term to create some solid ground under virtual world content creators.