Physical copyrights - legal precedents being set in Second Life

Let's imagine that the technology for creating things at will is already here, that the technical challenges have been sorted out, the technology is cheap and widely available, and the economic dependence on importing manufacturing goods from low-cost labor markets has been eliminated.

Once this happens, the world will be faced with a new question -- how (and whether) to deal with copyrights for physical objects that anyone can make? Second Life is grappling with this future issue today. Wired magazine explores the copyright implications of readily-copied 'physical' goods, as Linden Labs grapples with the potential havoc that could be wreaked when the means of production is distributed as easily as the product. If litigation arises from these developments, then the events in Second Life's virtual world have the potential to impact intellectual property law in the physical world...