There are two basic pieces to Linden Lab's virtual world. There's Second Life Grid, which recently got a name of its very own, which is essentially the platform, technology and company behind it.
Then there's the other bit. The part where Linden Lab so often says the real value is. Second Life, says the Lab, is the community, the content. All those people. That's the real value, it says.
So, if so many users (the exact number isn't important here) are what is described by the marks SL and Second Life (as distinct from Second Life Grid, which describes the underlying platform) -- if that endless creation of and remixing of content and communities is called Second Life -- why don't the people who Second Life actually are get equal time with what is, essentially, their own collective name?
Well, because the law says so, frankly. Until someone lawyers up and convinces a judge that Linden Lab is somehow in the wrong in the application and enforcement of their registered and unregistered trademarks, then Linden Lab is in the legal right here.
"SL" is an unregistered trademark, according to Linden Lab's Brand Center. It was used commercially in the context of virtual worlds, and for all legal purposes Linden Lab owns that mark in the context of virtual worlds.
You can have SL media players, and SL refrigerators, and SL photocopiers and SL shoes. It doesn't matter what you intend the letters S and L to stand for, as long as they don't have anything to do with virtual worlds, because then you're intruding on Linden Lab's protected turf. Demonstrate that you were using SL as a mark in a virtual worlds context, commercially, first and Linden Lab's claim to the mark evaporates.
"Second Life" is a registered trademark. It gets more active protection from encroachment. You can't make the mark go away by demonstrating that you had it first or used it first. They registered that mark first. They own it in this context, and US law backs them 100%. All the way. There are ways to do it, but again not without lawyering up and convincing a judge that the law agrees with you that circumstances exist that preclude Linden Lab's ownership of the mark.
You can still have Second Life cross-trainers, and Second Life guitars, and Second Life sentences. As long as they have nothing whatever to do with virtual worlds, and nobody is likely to think that they do.
Linden Lab has every legal right to control how those marks are presented, and used with two exceptions.
One is Nominative Use which is out of Linden Lab's control, but quite specific -- the protections granted to you by Nominative use evaporate if you don't meet the specific tests.
The other is estoppel. Basically Linden Lab (or its staff or representatives or agents) granted and/or encouraged use, mixing and remixing of the terms in the past, and changing their mind now causes real monetary loss to other parties. Estoppel is something that, again, you need to lawyer up and convince a judge about.
At the end of the day, until Linden Lab chooses to do otherwise, or someone convinces a judge to compel Linden Lab to do otherwise, SL and Second Life are every bit as much the property of Linden Lab as, for example, Coke and Coca-Cola are the property of the Coca Cola Company despite the Coca-Cola Company having handed those trademarks to the Second Life users to use within the virtual world as they saw fit.
Right now, though, Second Life users don't get as much right to their collective community name as they have to a multinational fizzy drink brand.