Linden Labs new virtual world.

[Tad Carlucci]

That's not what the ToS says. What it says is 'you' (the owner of the copy rights) give them (the service provider) a license to copy your work, limited for the purposes of providing and promoting the service; and you give 'us' (users of Second Life) a license to copy your work, limited for the purposes of using the service. Otherwise, the copies Linden Labs makes (storing your work, moving it from server to server) would be illegal; and the copies we make, say when 'you' walk past us, wearing the skin you created, would also be illegal.

Nothing in the ToS transfers ownership of the copy rights.

Linden Labs, and all Second Life users (except 'you') would be in violation of US and International law, and subject to civil and/or criminal penalties if they were to, for example, make a copy of your work and place it on another service (say, a non-Linden OpenSim service).

What makes the ToS a bit more complex is that Linden Labs wants one contract (ToS) for all their services, and they want it to allow 'us' (users of Second Life) to be able to take screen shots or make movies and not have to worry about chasing down the thousands of copy right holders whose works happen to appear in the image.

What also makes the ToS complex, is the 'Linden Labs' is a nebulous term. For example, the Asset Servers, which used to be in the Linden Labs offices, on computers owned by Linden Labs, are now located in Houston on computers owned by another company. So the ToS has to allow that company, on behalf of Linden Labs, to make copies as part of providing the Second Life services, say to move the Assert Server from one computer to another, or to make backup copies in case of some failure or disaster.

So, would it be legal for Linden Labs to make a copy of your skin creation and place it in their new service? Yes, probably. Since they don't need to worry about their lame permissions system, that's not an issue. The issue is would your skin work on the avatar-equivalent on that new service; for that, I'm betting (hoping) the answer is 'no', but it's a technical issue, not a legal one, which they're not talking about because, quite simply, they don't know, yet, whether it will make any sense at all.