Objects in Second Life can now be easily copied, and I’m pretty sure the cat’s out of the bag now. The source has been sold and distributed around, so even if development on it by the libsecondlife people ceased, somebody else could continue it.
One thing that can be tried is verifying whether an avatar/object/etc is authentic or not. This can be done by a script in the original object, as scripts can’t be duplicated.
The idea is to implement a CRAM-MD5 authentication mechanism. Basically, we have the authentic object prove it knows a secret without disclosing what the secret is. This is done by sending it a challenge, having the object calculate the response and answer. If the answer is correct, then the object is authentic.