Farnaz Alemi, an associate at the law firm of Latham & Watkins, has just published a piece in UCLA J. of Law & Tech. about the resolution of disputes within (and without) VWs. From the abstract:
"Though the real world is attempting to recognize in-game property rights to provide relief, it is not the viable solution some may think. As this paper demonstrates, parties face major obstacles in the real world attempting to resolve in-game disputes. Thus, I have proposed a two-tiered justice system: the In-Game Justice System (the "IGJ") and the Real World Justice System (the "RWJ") to provide a potential means of resolving in-game disputes using various real world theories of law and judicial proceedings. More importantly, real world courts would now be sought as a venue of last resort if an aggrieving player pierces the virtual veil (the "PVV"). This proposal intends to provide justice and relief to victims of virtual worlds, and hopefully a means towards understanding the interplay between the virtual world and the real world."
It's a really interesting paper. For me the question is not so much the normative issue of whether we should block off the virtual worlds from the real/physical/etc worlds, but the degree to which courts and legislatures are likely to do so. The longer I look at what courts do the more I have the sense that there is actually a lot of power in the concept of the "magic circle", whether courts acknowledge this or not. I think that perhaps there is something wired into us in accepting that there is something special going on within the boundaries of the circle. Step onto a football field, walk into a church, log into Azeroth, and you're in a different world. I'm not sure what this means (nor do I have any sense of how one could prove the acceptance of the circle) but papers like Alemi's move us towards an understanding of the power of the circle and how courts should respond to it.