Who owns my avatar? - Rights in virtual property

This paper presents a framework for discussing issues of ownership in connection to virtual worlds. We explore how divergent interests in virtual property can be mediated by applying a constructivist perspective to ownership. Virtual property is an important area of study for at least two reasons: First, the virtual trade has far-reaching consequences in the real world, including extensive economical consequences. Second, there is no agreement and no established practice regarding rights to virtual objects. Virtual worlds, where hundreds of thousands of people engage in thrilling scenarios, are a relatively new arena for social intercourse. To a large and increasing group of people virtual worlds are an important source of emotional and social well-being. The average player spends almost 20 hours a week in these environments. (Castronova, 2001) The trade with virtual property is constantly in progress and involves astonishing amounts of money. During a two week period in april 2004 the value of the trade on Ebay for the game Ultima Online reached 156 857 US$, have in mind that these is merely one game at one auction site under a short period of time. (Dibbell, 2004) The extensive trade shows that many players treat their virtual property as if it were their real private property. Meanwhile many license agreements explicitly state that all rights belong to the game developers. For instance, before playing Star Wars Galaxies, you must grant Sony Online Entertainment "a universal, perpetual, irrevocable, royalty-free, sublicenseable (through multiple tiers) right to exercise all rights of any kind or nature associated with your Content". (Sony Online Entertainment, 2003) Evidently, there is a serious conflict of interest. This question of virtual ownership may at first seem quite abstract, yet sooner or later one of the game-companies will start to lose money and shut down their virtual world. When this happens, virtual property worth millions of dollars will instantaneously vanish. A player who has spent several years in the game and has had the option of selling his virtual assets for hundreds of dollars will face a considerable financial loss. (Thompson, 2004) Maybe the best known conflict of interest in the area so far is BlackSnow Interactive v. Mythic Entertainment, Inc. BlackSnow Interactive was a company in California who hired unskilled mexican labourers to develop high-level characters by regular gaming. BlackSnow later sold these characters for a decent profit. Mythic, the producer of the game played by BlackSnow’s labourers, found out about the enterprise and shut down all BlackSnow-related accounts, claiming infringement of the license agreement. BlackSnow, on the other hand, sued Mythic for unfair business practises. The opportunity to try the relevant rights and interests in a court of law unfortunately vanished when BlackSnow found itself unable to continue the process due to economical and legal problems unrelated to the lawsuit. At the moment there is no guidance at all concerning how conflicts of this sort should be solved. This paper continue the work in Laws of Virtual Worlds (Lastowka & Hunter, 2003) where the authors established that virtual property interests are indistinguishable from real world property interests, yet left the question of how these interests should be weighed unanswered. Richard Bartle has also considered the issue and concluded that legislators sooner or later will have to decide how to deal with virtual trade and that when they do so it should be in favour of the game-producers. (Bartle, 2004) Within the utilitarian tradition, it is a well established practice to view property rights as social and legal conventions that should be evaluated according to how well they contribute to the general welfare. (Bentham 1843) This instrumental approach to property has led to the development of theories about ownership as a bundle of rights. One need not endorse the normative claim about the general welfare in order to accept the bundle analysis of property. Henry Sidgwicks provides one early analysis of property as composed of three rights: a right to excluxive use, a right to destroy and a right to alienate. (Sigdwick 1891) Sidgwicks account has been followed by numerous alternative accounts, the most influental of which is Tony Honoré’s list of eleven components of ownership: The right to possess, the right to use, the right to manage, the right to income, the right to the capital, the right to security, the incident of transmissibility, the incident of absence of term, the duty to prevent harm, liability to execution, and a residuary character. (Honoré, 1961) Sidwick and Honoré attempt to account for the content of a full or complete or maximally extensive ownership. But in practice (as they are aware) not all cases of what we call ownership include all of the listed rights. Depending on the local legislation, you may not be allowed to decorate or refurbish your house the way you like, you may not be allowed to destroy the bills in your wallet, and you may not be allowed to bequeth your belongings the way you want. Still we call these things ours. Other things that we have some component rights to, such as a flat we rent, do not qualify as ownership in the common language. Though Honoré settles for a Wittgensteinian interpretation of family resemblence between different instances of ownership, with no core component, the right to sell (by Honoré included in the right to capital) is what often draws the line between ownership and rights without ownership. The division of bundles into ownership and simply legal rights is, however, but a terminological question. Bundles of rights can be legally construed in many different ways and new bundles are continousely created to handle new challenges resulting from technological change or innovative economical solutions. Thus such immaterial pieces of property as shares, options, patents and copyrights have become common to law and practice. By adopting a constructivist perspective on ownership, the property interests in virtual worlds can be analyzed in their own right, without relaying too heavily on inadequate notions of ownership. Whether gamers should have a right to sell their virtual belongings or not might determine whether or not we should call their interest in these belongings ownership. But regardless of how this matter is dealt with, there are other interests that are separable from those in trading that might deserve legal protection. An interest analyzis of the area will prepare the ground for future solutions to conflicts of interest that are bound to demand attention from court rooms and legislators sooner or later. References Bartle, Richard (2004), "Pitfalls Of Virtual Property", Themis Group Bentham, Jeremy (1843), "Principles of the civil code". The Works, published under the superintendence of John Bowring. UK, Edingburgh. Castronova, Edward (2001), "Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier". CESifo Working Paper Series No. 618. http://ssrn.com/abstract=294828 Dibbell, Julian (2003), "Play Money", http://www.juliandibbell.com/playmoney/index.html Honoré, A M (1961), "Ownership", ss 107-147 in AG Guest, Oxford Essays in Jurisprudence. Lastowka, F. Gregory and Hunter, Dan (2003), "The Laws of the Virtual Worlds". California Law Review, Forthcoming http://ssrn.com/abstract=402860 Sigwick, Henry (1891), "The Elements of Politics", London. Thompson, Clive (2004), "Game Theories", Walrus Magazine, http://www.sophists.org/article290.html Sony Online Entertainment (2003), "End User License Agreement", http://starwarsgalxies.station.sony.com/tos.js

Virtual Property, Real Law: The Regulation of Property in Video Games

This article considers property created and used in the virtual realm of video games, which is often given real- T world value. From the unauthorized copying of designer clothes sold on Second Life for in-game cash, to real court damages awarded against game operators’ deletion of player-earned swords on Mir 3, a bridge has been taking shape from video gaming’s virtual economies to real-world economies. However, virtual property created in virtual worlds has yet to be formally recognized by North American courts or legislatures. This article attempts to touch on some of the legal considerations paramount in determining how such property can or should be governed. Virtual property shares many of the characteristics found in tangible property, and it is possible that it could be treated, at least in a legal sense, similar to tangible real-world property. Moreover, virtual property can carry both physical and intellectual property rights. While video game developers generally retain these rights via online agreements, policy reasons may have emerged for lawmakers to consider when deciding how to treat virtual property under these agreements. Property rights in virtual property are currently being recognized by some foreign legal bodies and North American courts and legislatures have also begun to deal with this novel issue. In response, some video game developers are taking new approaches to the rights granted to players in respect of the use of virtual property

The challenge of emergence of virtual property to the traditional legal theory and the corresponding solutions

The emergence and popularity of virtual property has challenged traditional legal theory, especially property and intellectual property theory. Due to the predisposition for a desire of ownership, and the desire for security and certainty in investment, virtual property users should acquire new specific legal protection for their virtual property. This thesis argues that it is needed to establish an independent virtual property theory which could clarify the legal status of virtual property, the types of virtual property right and the allocation of ownership of virtual property in the virtual world. The majority of the current virtual property theories tend to confuse different types of code and content in virtual worlds, equating the underlying software (the building blocks of virtual worlds) and the user generated content (virtual assets). In this sense, this thesis proposes to construct a notion of virtual property through layer theory. The layer theory divides virtual property into three layers, namely infrastructure layer (1), abstraction layer (2) and content layer (3), based on distinguishing between codes which constitute a platform of the virtual world and codes which consist of the user generated content. The infrastructure layer (1) contains the internet service provides’ ISPs’ codes which constitute the platform of the virtual world. This level of virtual property could be considered as the fundamental basis of the operation of the virtual world. At the abstraction layer (2) sits the unique computer code which comprise of the unique items which designed by ISPs but have not transmitted to users in the virtual world. The content layer (3) are the virtual items which are closely relevant to specific individual due to their personal investment and arrangements. Virtual items that sit at the infrastructure layer (1) and abstraction layer (2) should be categorised as ISPs’ virtual property and should be protected as computer software or artistic works created by writing program under current copyright framework. The programmers’ employed by the ISPs are the author of both categorises of virtual property and the ISPs are the first owner of both types of virtual property. However once virtual property combines users’ skill, labour, personal information and other types of investment and arrangement, the added part then should be categorised as users’ virtual property and the ownership should be granted to ordinary users. Theoretically, this thesis defines virtual property as a piece of property which relies on the internet environment provided by ISPs and reflects both the legal relationship between users and ISPs and the relationship between users and others. This thesis also divides virtual property into three categories, the virtual property users get from ISPs directly without further reproduction and creation, the virtual property that contains users’ private information, and the virtual property enrich users’ originality and reproduction which even have not reach the requirement of copyright. Compared with the traditional property right model, taking the complex relationships reflected by virtual property, this thesis argues that virtual property rights granted to users should be a twofold virtual property right. The twofold virtual property rights system adopts what I term ‘restrained-exclusive property rights’ or ‘fundamental property rights’ to describe the ‘rights’ users can claim to regulate the relationship and conflict between them and ISPs, meanwhile ‘relative-exclusive property rights’ or ‘external property rights’ are used to describe owners’ property interests to prevent the infringement from other users. The twofold virtual property rights system will help courts to recognise the exclusive aspect of users’ virtual property right, clarify the property interest over users’ private information, and identify the originality in users’ virtual property. From the legislative perspective, this thesis suggests that virtual property should be explicitly stipulated in the current copyright framework in the UK due to the characteristic of the virtual property. As the ‘Copyright, Designs and Patents Act 1988’ (CDPA) states in s.1 that copyright is a property right. On the other hand, based on the virtual property theory proposed by this thesis, virtual property that sit at the infrastructure layer (1) and abstraction layer (2) should be protected as computer software or artistic works. Therefore, this thesis suggests that users’ virtual property should be regulated by an independent statute entitled ‘The Virtual Property Statute’ which will complement the current CDPA 1988

CONTRACTUAL GOVERNANCE OF ONLINE COMMUNITIES – (PROPERTY) RIGHTS DISPUTES IN VIRTUAL WORLDS

Considering law’s difficult ride on the coattails of societal and technological progress, this thesis discusses property rights disputes in virtual worlds, the origin and foundation of (property) rights in characters, objects and items (virtual assets), and the possibility of contractual governance. Investing considerable time, effort and money to create, develop and accumulate virtual assets to gain prestige or competitive advantage, or simply to have more fun playing, users often build strong emotional connections to their characters and place a high value on accumulated operator, third user and user-generated content. But the user’s experience of virtual assets as property, contrasts starkly with most in-world property models where first property rights belong to the operator, subsequent rights are delineated by contract, and emerging property rights are transferred to the operator or waived by the user. Noting the ‘technologically inaccurate portrayal of software’ in legislation, jurisprudence and legal debate, that ignores its ‘physical properties of mass and volume’, and the influence of client/server system architecture on the allocation of personal property rights, this thesis shows that physical and intellectual rights cannot resolve the newly emerging property rights disputes in virtual worlds. Instead of making another helpless attempt to justify a new virtual property right that still cannot overcome an enforceable transfer/waiver of (future) (property) rights clause in the contract, this author questions common concepts of property and proposes a new quasi-property right. Originated in the contractual obligation of the operator to grant the user a right to use, to exclude other users from and to transfer virtual assets, the rules of conduct included in the multiple-separate user contract complete its quasi-absolute effect. This quasi-property right does not only complement the quasi-tort, quasi-criminal and quasi-constitutional system already established by the (virtual social) contract but supports the identification of the contract (terms) as new default legal rules for VWs and similar online communities

Striking a Balance between Property and Personality. The Case of the Avatars

Virtual worlds, as powerful social platforms of intense human interaction, gather millions of users worldwide, producing massive economies of their own, giving rise to the birth of complex social relationships and the formation of virtual communities. By enabling the creativity of the player and figuring as an outstanding example of new online collaborative environments, virtual worlds emerge as context for creation, allowing for users to undertake a digital alter-ego and become artists, creators and authors. Nevertheless, such digital egos are not merely creations, but a reflex of their creators, an extension of their personalities and indicia of their identities. As a result, this paper perceives the avatar not only as a property item (avatar as the player’s or [game-developer’s] property) but also, and simultaneously, as a reflex of our personality and identity (avatar as the projection of one self in the virtual domain, as part of an individual persona). Bearing in mind such hybrid configuration, and looking at the disputes over property rights in virtual words, this essay makes three fundamental arguments. Firstly, it proposes a re-interpretation of intellectual property rights (namely of copyright law) according to its underlying utilitarian principles, as such principles seem to have been forgotten or neglected in the sphere of virtual worlds. The idea is to re-balance the uneven relationship between game owners and players perpetuated by the end-user license agreements (EULAs), recognising property rights to users over their own virtual creations. In order to evaluate whether a user’s contribution to the virtual world amounts to an original and creative work and is worthy of copyright protection, the essay proposes the image of a jigsaw puzzle as a tool and criteria to carry out such examination

Virtual Worlds: Between Contract and Property

Although virtual worlds have existed in some form for several years, it is only recently that the phrase has begun to seem truly accurate, with many users increasingly choosing to live the primary part of their days logged into a virtual world. While virtual worlds are causing us to rethink how we view relationships and communications, they are also increasingly coming into conflict with our prior conceived notions of property law. With virtual worlds facing an escalating number of conflicts over property ownership, it is becoming imperative that the status of virtual property be addressed to ensure the continued growth of virtual worlds and their nascent, booming economies. In this Article, I examine the current conflicts over property rights within virtual worlds and offer a solution to the current problems. Although the status quo is untenable, I show that neither property law nor contract law can provide an exclusive solution to the current conflict. Instead, I argue that virtual worlds and their unique characteristics call for the creation of a new type of property interest, which I call the virtual easement. Combining features of both property and contract law, the virtual easement allows for sufficient user property protections as well as maintaining virtual world companies’ control over their worlds. If established, the virtual easement should allow for continued growth of virtual world economies with a minimum of governmental interference. I conclude with a discussion of possible policy concerns relating to the establishment of the virtual easement

The Case for Virtual Property

PhDVirtual assets should be treated as a species of property. Users of virtual environments have legitimate expectations about acquiring legal interests in virtual assets as they would in their physical counterparts under similar circumstances. There are two sources of these expectations. Firstly, it is the architecture of virtual environments, the existence of virtual economies, and the property-like characteristics of virtual assets that frame users’ expectations. Secondly, providers’ representations and conduct either explicitly authorise or tolerate virtual asset transactions. As a result, issues of title and ownership arise. The existing legal framework fails to deal properly with these issues. Currently applicable laws, such as contract, intellectual property or consumer protection law, do not recognise users’ expectations as legitimate. However, property law could provide the necessary answers by treating virtual assets as part of the law of property. The theoretical foundations of property law inform us about the origins, justifications and consequences of property rights, as well as their role in allocating valuable resources and resolving social conflict. The concept of virtual property entails property rights in virtual assets, which as durable, separable things of independent value. In consequence, a new category of virtual property would resolve the different and unjustified treatment of virtual assets. Virtual property recognizes and protects users’ legal interest in virtual assets, based on their legitimate expectations

The End of the (Virtual) World

Virtual worlds have been the next big thing for some time now. In 2008, more than 100 public virtual worlds received venture capital funding - a significant increase over previous years. Yet virtual worlds have been going bankrupt faster than ever, including several high-profile firms and worlds. Every technology goes through a shakedown phase, and for virtual worlds the current recession has served as a catalyst for a downturn that, although not unexpected, is nevertheless startling in both numbers and rapidity. This article examines the intimate relationship between how a virtual world begins life and how it ends. The amount of money available to creditors at the end of a company’s life, based on the bankruptcy system, helps to determine the terms of loans that creditors are willing to make. If creditors are able to get money out of a bankrupt virtual world, then virtual world creators may be able to borrow money at lower interest rates in order to start new projects. This Article asks whether permitting virtual world creators to borrow against new kinds of valuable intangible assets will decrease borrowing costs. It therefore argues that how virtual worlds die will impact how they are born. The piece first addresses the lessons learned in the early-millennium dot-com bubble burst and applies them to the shakedown currently underway in virtual worlds. It shows that during the dot-com burst, creditors learned ways to get money out of intangible assets because thinly-capitalized dot-coms had no other assets of value. The Article extends this trend to virtual worlds. Certain new intangible assets (called “virtual property”) could and should be available to businesses as collateral for secured lending. Virtual property is often treated by the markets as personal property - for example, digital objects are bought and sold for real dollars and could serve as valuable collateral if law were clarified. The law of security interests in intangibles is clearer in some places than others. Although complex, the rules for perfecting, enforcing, and valuing security interests in patents, copyrights, and trademarks are now established. U.C.C. Article 9 has expanded the ability of secured parties to secure interests in software that is physically embedded in goods or that is delivered via a tangible medium such as a CD-ROM (under the definitions of “goods” and “software” respectively). Thus, when intellectual property is embedded in a good or delivered in tangible form, courts have little difficulty differentiating the chattel property right from the intellectual property right. But neither bankruptcy law nor Article 9 deals well with security interests in copies (not in copyrights) of software that are solely in electronic form. In the area of intangible or electronic assets, courts often do not distinguish rights in a specific copy (a personal property right) from copyrights (an intellectual property right). Many virtual world creators and businesses hold assets such as digital inventory, virtual currency, or prime virtual real estate. In order for those businesses to be able to borrow against this virtual property, the law must be significantly clarified. This article therefore advocates a theoretical overhaul of how courts value and understand digital assets in the bankruptcy context. Courts can, it suggests, apply established principles of law to permit game designers to borrow against virtual assets, and creditors to maximize their recoveries in bankruptcy. The article will proceed in three parts. Part II will discuss the background of intangibles in bankruptcy and the burgeoning technologies of virtual worlds. Part III will analyze the legal impact of digital objects and intellectual property licenses in virtual world bankruptcies, with an eye toward determining whether increased protection for creditors might result in reduced borrowing costs for virtual world creators. Finally, Part IV will offer some recommendations for how courts can redefine the way they understand digital assets in the bankruptcy context so as to resolve the ambiguities clouding the use of these important emerging property rights as collateral

Bitproperty and Commercial Credit

In the past several years, the growth of virtual property in today’s economy has been explosive. The everyday use of virtual assets, ranging from Twitter and Facebook to YouTube and virtual world accounts, is nearly absolute. Indeed, by one account, Americans check social media over seventeen times per day. Further, a growing number of savvy virtual entrepreneurs are reporting incomes in the six- and seven-figure range, derived solely from their online businesses. Nevertheless, although the commercial world has come to embrace these newfound markets, commercial law has done a poor job of keeping up. Scholars have argued that laws governing everything from taxation, to bankruptcy, to privacy rights have not kept pace with our ever-changing virtual world. And nowhere is this truer than in the law of secured credit. Doubtlessly, virtual property has come to represent significant wealth and importance, yet its value as a source of leveraged capital remains, in large part, untapped. This unrealized potential is not without good reason; the law—specifically Article 9 of the U.C.C. and the law of property more broadly—suffers from a number of deficiencies and anomalies that make the use of virtual property in secured credit transactions not only overly complex and expensive, but almost entirely untenable. This Article shines light on these shortcomings, and, in doing so, advances a number of guiding principles and specific legislative recommendations, all geared toward a reformation of the law of secured credit in virtual property

My Kingdom for a (Digital) Horse: Perceptions of Virtual Property Rights in Second Life

Massively Multiplayer Online Games (MMOGs), such as World of Warcraft and Second Life, create virtual worlds in which players build relationships, establish communities, and win, create, or purchase property. As MMOGs have evolved, their virtual economies have developed into major financial forces, and intellectual property rights have become an increasingly pressing issue. In the academic literature, the intellectual property rights of MMOG players have been widely discussed from legal, economic, and philosophical perspectives. However, no research has yet been done on players' attitudes toward copyright problems in virtual worlds. As a means to investigate these attitudes, this research looks at 880 posts in nine threads on the Second Life community forums. For the most part, the intellectual property topics addressed in the academic literature are not those that concern the players posting on the Second Life forums