Raising the stakes on a two-year-old intellectual property controversy in Second Life, a popular seller of online adult novelties filed a federal copyright- and trademark-infringement lawsuit against Linden Lab this week. The suit claims that Linden looks the other way, while virtual residents rip off the SexGen product line, which includes specially programmed beds, rugs, sofas and even a coffin that enable consenting avatars to engage in virtual sex acts.

Attorneys for Eros LLC founder Kevin Alderman wrote: "Those merchants who sell cheap, imitation knockoffs bearing the SexGen mark harm Eros by causing further confusion among consumers when the products they purchased do not function in the ways they expect SexGen products to function."

For its part, Linden Lab makes money by charging a modest membership fee, running a currency exchange between Linden bucks and real U.S. dollars, and selling and taxing virtual real estate -- all of which is tainted by profits from the pirated material, the lawsuit claims.