This Article addresses the interaction between digital technology and Intellectual Property Law. Despite its obvious benefits, the Internet was and still is a major source of legal obscurity. The one million dollar question is to what extent, if at all, can the law of intellectual property strike the correct balance between innovation and the protection of Intellecual Property Rights? Keeping the concepts of digital liabraries, peer 2 peer systems and second life, answering the previous questions seems to be easirer said than done. Keeping the above in mind, this Article highlights the legal argument in the United States of America, Canada and the UK. As such, it does focus, unexclusivily, on the Common Law System. The conclusion we have reached is that any answer could be anticipated to deal with these technological issues from a legal point of view should not be taken as an excuse to hinder the development of business