Linden Labs, the creators of Second Life, get sued for booting someone out of their virtual property:
Setting itself apart from other creators and operators of virtual worlds, Linden announced in late 2003 that it would recognize full intellectual property protection for the digital content created and owned by participants in Second Life. Consequently, Second Life avatars may buy, own and sell virtual goods of all types. Of significance to this particular case, avatars may purchase virtual land, make improvements to that land, and rent and sell land to other avatars for profit....
A dispute occurred when the plaintiff then acquired a parcel of virtual land called Taessot for $300. He claimed that Linden sent him an e-mail advising him that Taessot had been purchased improperly as a result of an exploit and that, as a result, Linden took Taessot from him. The plaintiff also claimed that Linden then froze his account and effectively confiscated all of the virtual property and currency that he had maintained in his account with Second Life.
CNET sees a virtual solution:
Real disputes can occur when it comes to virtual worlds, and those disputes are leading to litigation in real courts. Perhaps at some point a virtual judiciary will be set up in a virtual world so that disputes can be decided by judge and jury avatars. Who knows? Of course, whether real disputes emanating from virtual worlds could be effectively and conclusively resolved in a virtual courthouse remains to be seen.