Who Owns My Light Saber?

Under the subject heading "Who owns my sword?", the MUD-Dev mailing list has played host these last few weeks to a long, stimulating thread on virtual goods and property rights. The discussion hit pay dirt today with a post from Ren Reynolds that is as sharp and concise a statement of the legal crux of the matter as I have seen. If I may excerpt, typos and all:

"Companies are saying that they own copyright so customers cant sell characters, but where is the breach of the companies rights ? There is no copying going on, no public performance - just an agreement between two individuals about the use of a virtual item - what's that got to do with the game company ?

"So certainly, if the company has the right to tell customers what they can do in this respect, then they are free to reserve it, at the moment I'm genuinely not sure if companies have it."

This is exactly the question that the abortive Black Snow v. Mythic case left unsettled. And it's interesting to note that while Sony Online Entertainment felt very confident invoking its intellectual property rights to get EverQuest trades banned from eBay two years ago, they have yet to make any such move against the growing field of Star Wars: Galaxies eBayers.

Could it be they're not so sure they'd win the case anymore? Or is this just the influence of the enlightened Mr. Koster?

Comments

[Bruce Boston]

1.

So, I'm no lawyer, but I think that companies have the right to control the export/import of an item. For example, you can only buy 2 rolex watches outside the US and bring them back home. There really isn't any 'copying' going on, simply transportation from one market to the next. So I don't think that copyright law is specific to duplication.

On the flip side, from a marketing perspective, I can't see why Sony would want to ban eBay sales. Think of all the free advertising they are getting with all the buzz from it. My guess is heavy-handed corporate power plays just aren't cool anymore, and every point on the coolness meter affects the bottom line these days.

[Greg Lastowka]

2.

Bruce's Rolex hypo is almost certainly not a copyright issue, although there are certainly laws that are relevant to those wishing to move Rolex watches around the world.

I'm not planning to do my day job on this blog -- I'm here for the ludology. But I think those little "I agree" boxes you click on when you install games are always good to pay attention to. If you're playing SWG, you probably agreed to this:

7. You acknowledge and agree that you have not and will not acquire or obtain any intellectual property or other rights, including any right of exploitation, of any kind in or to the software, artwork, music, and other components included in the accompanying CD-ROM (the "Software") or the Game, including, without limitation, in any character(s), item(s), coin(s) or other material or property. You may not use any third party software to modify the Software or to change game play. You may not create, facilitate, host, link to or provide any other means through which the Game may be played by others, such as through server emulators; additionally, you may not engage in matchmaking for multi-player play over unauthorized networks. You may not decrypt or modify any data transmitted between client and server; you may not use or distribute macros or other programs which would allow unattended game play. You may not take any action which imposes an unreasonable or disproportionately large load (as determined by us) on our infrastructure. You may not buy, sell or auction (or host or facilitate the ability to allow others to buy, sell or auction) any Account or any Game characters, items, credits or copyrighted material or any other intellectual property owned or controlled by us or our licensors.

http://starwarsgalaxies.station.sony.com/content.jsp?page=Policies%20EULA

My law and economics left brain tells me that most people (including corporate people) don't sue for breach of contract unless the benefit of bringing suit outweighs the cost.

[Edward Castronova]

3.

I agree with the thrust of Ren's argument too. In my view, companies do have a compelling argument for restricting eBay sales, but not from a property right in the items. Rather, they are guardians of a communal good, the atmosphere of the game, which eBaying may destroy (depending on what the game is trying to be). The EULAs should state 'this is a role-playing game. Our customers expect a role-playing game with features that include a medieval atmosphere, a rags-to-riches storyline for each player, equality of opportunity, etc., etc. To provide this service to our customers, we make various deisgn decisions. Among them is the decision to forbid trading between players outside the confines of the game. By clicking 'I agree,' you accept these design decisions and you agree to follow them in the interests of the entire community of players.'

I don't know if that's a stronger legal case, but it has a solid footing in the economics of public goods and common property resources. The economics behind this constitute a very clear and convincing case that governmental authority is well-justified in restrictive individual action. Indeed, failure to control individuals results in a decrease in individual well-being; this is a case where the invisible hand gives an invisible slap to everyone: we all follow our self-interest, and in so doing, we make our lives worse. We overfish the pond, we overgraze the meadow, we over-pollute the air, and we over-utilize our Earth money in pursuit of game content.

[Greg Lastowka]

4.

I guess you could make an argument that better stories make for more enforcable contracts, Ted, just because judges and juries are people. But the animating goal in the design of most EULAs (not all, but most) is the legal equivalent of "take no prisoners," or as Dan would put it "All your base are belong to us."

This is justified by "freedom to contact" -- you and I can agree that I'll make you a peanut butter and gravel sandwich on Tuesday if you'll quack like a duck on Monday. Where's the social benefit? Who knows, who cares. If we sign papers, the law, in its majestic indifference, doesn't ask too many questions when you drag me into court claiming I substituted vegemite for peanut butter.

[UnggiYoon]

5.

It's a good luck to run into this blog for me.

I'm a Korean jurist who have dwelved into the legal matters in MMORPG like Lineage,Mu-Online,Mabinogi etc.

In Korea where Civil Law System preside over,
You can have a "ownership-in the meaning of full exclusive power" only tangible things(like land, house, car).

In the field of intangible work, you can only have a "intellectual property - a limited excusive right" on the condtion that you are the creater or transferee of the intangible work, not an ownership.

So to tell "Who owns in-game items?" is somewhat inappropriate from this point of view.

"Who create in-game items?" and
"Who play(or have a right ot use) in-game itmes?" are proper statements.

In South Korean legal system ,
the game character and item is regarded as
a visual intangibe work created by game company,

Gamers don't "Create" characters or items, What they do in game is "Play" with them which game designers and programmers already set in.

Gamers agree to the User Lincense Agreemet by click, then they have a right to use a character, item, and also the other in-game environment for playiing MMORPG.

Selling in-game items out with real mony in Korea is also not comes under the violation of copyright law.

However the sale is considered as a breach of the agreement or ULA that prescribe the sale in-game items out with real mony is banned.

And Fair Trade Commission(a sort of goverment agency)approved the validity of the ULA, because
it ruled that it is suitable to leave the matter(allow or ban the sale of in-game items)to it's creators' discretion.

Therefore, In korea, the heart of the matters is not the direction of an ownership, but the rediscovery of the meaning of "PLAY",and the restructuring of IP law.

Unlike USA, our copyright law accepts the concept of "Neighboring Right" and "Moral Right",

I expect the two rights mentoned above could be a possible channel throgh which the contribution of gamees by playing VW be evaluated and compensated.

and I suspect the current trade of in-game asset is a kind of self-recue plan or makeshift by gamers who feel frustration because of their playing is regarded just as consuming games not fairly as a contributoring(thogh it fall short of creating they argued) games from out side legal system...

thanks.

[Dave Rickey]

6.

Chris Mancil recently posted to MUD-Dev what to me seems like the most cogent refutation of the assertion that players own the items I've yet seen:

http://www.kanga.nu/archives/MUD-Dev-L/2003Q4/msg00016.php

--Dave

[DivineShadow]

7.

I believe it would be suicidal to let end users claim copyright for things inside the virtual world, and there's an even worse case: To have a court determine that players own copyrights here.

The extension of that: Limiting trade, seems an even thornier issue. But that's what this is about. This whole thing may have it's roots on who "owns" it, but in the end this all leads up to what you can and cannot do with this IP. Specifically "What control can the owner exercise?" I haven't found that the owners of this IP can contractually bind people into doing what they INTEND with their EULAs (total control of trade). I am stuck at the same point I came to on the post titled "Cr1m3 and (No) Puni5hm3nt?" http://terranova.blogs.com/terra_nova/2003/09/cr1m3_and_no_pu.html#comments
Specifically:
[... Assuming the game company owns all IP rights ...]
"Now, if I am transferring access to the resource, weather *ingame* or *out*, then I have to have been licensed to access the resource in the fist place. This is certainly not simple. The EULA only gives me right to access "the service" and "content" within it, but never licenses (or excludes) the access to specific content inside of this "content" balloon. I am essentially given a blanket license to the "content" and "service". In a virtual item sale nobody is transferring me any access I don't already have a license for. So in essence nothing is happening. Well, maybe someone is paying for access to something they already have a license to."

So, to answer (in a practical manner) the question "Who owns my Light Sabre" I am stuck at: It really doesn't matter, since you're fully licensed to all the content in the gameworld.

[Bruce Boston]

8.

Ok, I'm guessing that the Rolox watches go under Trademark law, not copyright.

http://www.customs.ustreas.gov/xp/CustomsToday/2002/February/other/christmas.xml

[Edward Castronova]

9.

Unggi Yoon wrote:

"It's a good luck to run into this blog for me.

I'm a Korean jurist who have dwelved into the legal matters in MMORPG like Lineage,Mu-Online,Mabinogi etc."

Mr. Yoon, THANK YOU for posting! We need more comments from experts on Korean gaming. If you write a report about your findings, please tell us about it.

[Dan Hunter]

10.

Ted beat me to it. It's wonderful to have some insight from Korean experts. Thank you for talking with us, Mr Yoon. We'd love to have more of you join us. We don't hear enough about the Korean gaming environment in English-language commentary.

[Greg Lastowka]

11.

Ted and Dan both beat me to it, Mr. Yoon. I was actually thinking of posting something about the fact that we really *need* an Internet liason with Korea who can tell us what is going on there. I hope you can be a regular here.

Dave & DS: Like I say, the key focus should be the EULA, but if we really want to get to IP, it's important to keep policy separate from law.

As a policy issue, it is good to ask if we like the idea of property ownership in this context, does it make sense with analogies, are there policy reasons behind it, is it consistent with our historic notions of property, etc.? Dan and I talk about this in Part II of our paper. But let me be clear that this is not traditional *lawyer talk*, this is *legal academic* talk. A court might find this kind of policy discussion interesting and it may nudge a court one way or another in a close case -- but most courts (maybe Judge Judy is an exception) will not decide things on the basis of logical arguments and impassioned analogies alone. There are these things called doctrines, cases, and statutes that courts feel they should pay close attention to. And that is a good thing.

As a legal issue, before we go talking loosely about copyright and other IP rights, we really need to ask if virtual asset trading implicates traditional intellectual property laws (e.g. copyright) at all. As I've said before, this is a *very* complex issue, both factually and legally. I am certain there is not a categorical answer to the question in the abstract, but even presuming we could agree on a set of discrete facts, the United States law on point would probably permit arguments pro and con on most fact patterns. (Maybe I'll explain the complexity in an article some day... there's already one student note that looks at it).

But the question of whether this is an IP issue is something that is fascinating but doesn't need to be relevant in all cases. A gaming company could use other means in a courtroom to attack virtual asset trading. (Of course I'm not saying this would be successful -- that is very dependent on facts.) In addition to EULA provisions, there are other statutes and doctrines that might be applied. The Vegas Black Hat case that Ted and Jen Granick were involved in invoked a computer misuse statute. Again, I refuse to take a position on how successful these attacks might be in the absence of facts, but if you're curious about computer misuse laws, see Orin Kerr's article here:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=399740

[Julian Dibbell]

12.

The question of virtual property is complex in the strictest sense of the word: it is made up of more than one question. This is why I sometimes get a blind-men-and-the-elephant vibe when I'm reading the "Who owns my sword?" It's like the participants think they're talking to each other about the same thing, but often as not they're actually addressing different sub-questions of the larger one.

Here are some of the questions embedded in the question "Who owns my sword?":

1. "Is my sword my intellectual property?"

2. "Is my sword my property?"

3. "What rights does my ownership of this property give me?"

It's important, I think, to keep in mind that these are all separate questions. Answering one does not answer the other two.

For instance, I tend to agree with Chris Mancil's opinion, cited above by Dave Rickey: the notion that player's actions within the game make them in some sense co-authors of the game is a stretch at best, and nutty at worst.

But that only answers question #1. Just because my sword is not my intellectual property, that doesn't mean it's not my property. A book on my shelf is my property, for instance, even though I may have no intellectual-property rights in it. And as for whether virtual items are the property of the players who control them, I'm with Ren Reynolds (and Greg and Dan) in believing that the case is pretty strong. Players may be only "leasing a key to a dream" when they subscribe to a game, as Mancil puts it, but dreams are part of real life too, and the control that players have over their little parcels of these dreams looks enough like ownership to meet most definitions of property, including, probably, the legal ones.

But that still leaves question #3 open -- "What are my rights in this property?" Non-lawyers like myself tend to have a hard time separating that one out from question #2, but it is in fact entirely distinct. The layman's notion of property is that it is a thing, and a thing that the owner has total control over. But at law, property is just a bundle of socially negotiable rights, and just what's in the bundle varies widely.

If I have in my possession a kilo of cocaine, for instance, U.S. law doesn't grant me much control over it at all. I can't sell it, I can't use it, I can't even, well, possess it. But for legal purposes it is nonetheless my property. Why? Because the law does in fact grant me the right not to have it taken from me by illegal means. This is so the law can prosecute people for stealing, and not give people who happen to steal contraband a free ride.

Lawyers, please correct me if my example is full of crap. But the point remains: Virtual items might legally be property, but that doesn't mean their trade can't legally be restricted. That's where Ted's points about the social desirability of such restrictions come into play.

I'm not sure I see the desirability myself (I'm not sure even Sony does anymore, despite what the Star Wars TOS says -- it wouldn't take more than a phone call to get eBay to shut down the SWG auctions, so why haven't they?). But I'm pretty sure the final answer to the virtual property question will come not from corporate legal departments or wishfully-thinking players but through serious negotiation among all parties concerned. At least it ought to.

[Greg Lastowka]

13.

Jules,

Your cocaine example seems right, but I'd have to look up some cases about stolen contraband before I gave it my lawyerly benediction... Dan -- do you know anything about the law of stolen cocaine?

Just to clarify my position -- I'm not fully in the "you own your sword" camp. (Maybe Dan is.) Our position in the paper, in < 20 wds, is "it isn't crazy to say this is legal property" (and we're agnostic as to who might own it) and "gee, this is really starting to look like politics".

If anything, I'm philosophically sympathetic to the "Sony owns your lightsaber" camp because I don't see bringing these disputes into RL courts as being particularly helpful to anybody. (Not saying that it won't happen.) But I'm highly adverse to the "and you don't own your sword because you're just playing a dreamy game where things are unreal" excuse -- highly 14m3.

You know what I think is dreamy and unreal? Exotic derivatives.

[Dan Hunter]

14.

I don't think I'm any more in the "own your own sword" camp than Greg. And just to reiterate, we've only ever said that it's not crazy to say that this stuff is property. Which is a starting point and definitely not an end-point. As Julian said, most of the discussion on this topic generates a lots of heat and a little light. All we really want(ed) to do is to say "look, these things look a lot like property, and all your analogies to golf, and dreams, and so on, changes this not a jot." We're not saying that a UO castle *should* be property as a normative pronouncement. We think that it *is* property, and that courts will probably say that it walks like a duck, talks like a duck, and so is property.

Now, as others point out above, that's not the end of the question by a long chalk. Cocaine is a tangible thing, but you are not free to alienate it. Babies ditto. There are social policy considerations involved in deciding whether one can alienate/transfer/otherwise deal with it at all, or only under some circumstances, or maybe only certain types of transactions are possible/legal. As to transactions over cocaine or babies, the basic position of most jurisdictions is that transactions relating to them are void for public policy reasons. Now, I may be wrong in this, but I *think* that this operates under contract (there being a large category of contracts which are void as being contrary to public purposes). I can't recall my Property 100 classes about illegal property. I'll go back and have a look at it, and let you know. But in any case, I don't think that the analogy is going to help much. Sure, you can't sell cocaine and have a court recognize the property rights that pass. Why would this type of reasoning apply to virtual assets? Because we call it EverCrack?

Once we're done with the property analysis then we can move on to the contract stuff. And it's here that Greg and my position becomes academic (in the perjorative sense). EULAs give everything to the developer. Unless badly drafted I think that this will, for the moment, be the end of the question. No matter that I might have property interests in the virtual assets, if the developer wants to enforce the terms of the EULA then my property is theirs. Or disappears.

I think it's possible to construct situations where the EULA won't necessarily be enforced. In a few years, if There and Second Life are successful, then I think we will see Ted's prognostication (which occurred for the first time in the BlackSnow case) become widespread and real. People will go into the VW to work, since they can make more money there than IRL. If your livelihood then becomes the property of the developer courtesy of a draconian EULA I think that a judge might take a different view of the applicability of the EULA.

[Greg Lastowka]

15.

There's another wrinkle in this "my sword / your sword" business I'd like to note as an Internet IP geek: what if your avatar writes a sonnet on the side of a virtual wall, or what your avatar troupe puts on the original play "La Virtual Boheme", or builds an avatar Taj Majal... can the resultant IP rights, if any, be EULA'd away?

Explaining the appropriate outcome would sure make a fun student note.

[DivineShadow]

16.

All,

I suppose I am losing sight of something big here. It is easy to forget all these "items" are actually entries in a database the developer holds. A 'content' database, not too dissimilar from this very own blog at just a short level of abstraction. Fronted by a 'content management system'. During our use of the system we create these entries using the tools and processes provided. Part of this toolset is a "visualizer" that turns "Q#)%M%" into a graphical representation that resembles a little castle or a sword, or a stack of gold and ties it back to specific procedures within the 'content manager' that can be used to further alter this data or affect other data through pre-determined circuits.

Who owns this database? Who owns the data tables? Who owns the data rows? Who owns the individual data fields? What is each owner entitled to do with it? What are the owner's responsibilities for possessing this data? Is he liable for anything? Who can manipulate the data and who can't? In which ways can this data be modified? If I have "@$%(" and you use "*^%(" to invoke the content manager procedure "destroy_object" and now my data reads "Null", who consented to these alterations? The owner, the custodians, the licensees? What limists can these owners place on the motives behind the alteration of data they own/have custody/have licenses to? If there is a database owner moderating my activities by restricting me, are they liable for the content they do let through?

[Greg Lastowka]

17.

Some quick comments to Unggi Yoon (and thanks again for posting here):

> In South Korean legal system ,
the game character and item is regarded as
a visual intangibe work created by game company, Gamers don't "Create" characters or items, What they do in game is "Play" with them which game designers and programmers already set in.

Right -- although players can be creative in some ways.

> Selling in-game items out with real mony in Korea is also not comes under the violation of copyright law. However the sale is considered as a breach of the agreement or ULA that prescribe the sale in-game items out with real mony is banned.

That is largely consistent with the situation here.

> And Fair Trade Commission(a sort of goverment agency)approved the validity of the ULA, because
it ruled that it is suitable to leave the matter(allow or ban the sale of in-game items)to it's creators' discretion.

Is there any place to find a copy of the decision (in English or Korean?)

> Therefore, In korea, the heart of the matters is not the direction of an ownership, but the rediscovery of the meaning of "PLAY",and the restructuring of IP law.

That's a very interesting observation.

> Unlike USA, our copyright law accepts the concept of "Neighboring Right" and "Moral Right", I expect the two rights mentoned above could be a possible channel throgh which the contribution of gamees by playing VW be evaluated and compensated.

I understand the droit morale concept, but what is "neighboring right"? I'm not clear how droit morale would play out in virtual worlds, if you suppose that the players haven't created anything -- if anything I think it should give stronger rights to the owners.

> and I suspect the current trade of in-game asset is a kind of self-recue plan or makeshift by gamers who feel frustration because of their playing is regarded just as consuming games not fairly as a contributoring(thogh it fall short of creating they argued) games from out side legal system...

I am not sure I would agree. I think some players do feel their contribution and desires are undervalued. But I think the trade in virtual assets is not primarily about expressing those sorts of frustrations.

[Julian Dibbell]

18.

Greg, Dan:

OK, we get it: It's the EULA, stupid.

That said, is it really just an academic exercise to ask whether, regardless of the EULA's terms, copyright and other IP laws don't also cover the sale of virtual items?

I'm wondering because it seems to me that -- especially in today's IP-friendly legal climate -- copyright already affords rights-holders plenty of real-world leverage over and above what contracts do.

Consider eBay's Verified Rights Owners (VeRO) program, under which eBay is happy to ban unauthorized auctions of your intellectual property at your simple request. My understanding is that VeRO exists to provide eBay a safe haven from prosecution under the DMCA. My understanding is also that VeRO is how Sony got eBay to put the kibosh on EverQuest auctions.

And my question is: If Sony were only able to argue that EQ auctions violated its terms of service, and not its intellectual property rights, would eBay still have been obliged or inclined or even allowed to shut down those auctions? At the very least, would Sony not perhaps have had to leap over higher legal hurdles to get eBay to cooperate?

Please enlighten. That's what you guys are here for :).

As for the cocaine example, I really only brought it up in order to dramatize what's often hard for layfolk to understand: just because something is legally your property, that doesn't mean you can do whatever you want to with it. I didn't mean for it to be especially applicable to the particular weirdnesses of virtual goods.

Now that I think of it, though, doesn't the example in fact apply rather tidily to *one* of the particular weirdnesses we've been wrestling with here? I mean the question of virtual theft and real-world punishment.

If someone hacks into my Ultima Online account and steals my $5000 inventory, in other words, does it matter for the purposes of criminal law whether or not I can legally sell that inventory? The cocaine example, it seems to me, would teach us that it doesn't.

Perhaps Unggi Yoon can enlighten us on this one. We hear that in Korea, thieves of virtual goods are being arrested by the tens of thousands. What's the jurisprudence behind the crackdown?

[Richard Bartle]

19.

If I go to a soccer match in the UK, written on the ticket are the words "not transferable". This means that although I own the ticket, and the ticket entitles me to enter the stadium and watch the game, I can't sell the ticket to anyone else. If I do, the people who own the stadium may refuse entry to the person to whom I sell it. Worse, I could myself be sued for having sold them the ticket in the first place.

Why would a soccer club act like that? Why would they not want me even to GIVE my ticket away if I wanted, let alone sell it? Well, it's because we have home fans and away fans. Home fans support the team that is playing at home, and away fans support the team that is playing away. European countries are small enough that there may be a substantial number of fans prepared to make the journey to see their team play. Indeed, a certain number of seats are actually set aside so that a reasonable number of visiting fans will get a chance to watch their team in action.

Now, soccer is very tribal. People who support one team will usually have at least one other team that they regard as the enemy. This animosity is usually reciprocated. There are some teams with supporters that dislike ALL other teams. Now, when you have 5,000 of these in a stadium that holds 50,000, what's going to happen? Answer: although most will behave themselves, many won't. There will be fights. People will get hurt. Thus, soccer clubs segregate the fans. All the home supporters go in one part of the stadium, and all the away supporters go in another. Stewards keep them apart. They taunt each other with chanting, but no-one gets hurt.

Now, if I, as a home supporter of team A, get hold of a ticket for a big match, a tout may offer to buy it from me for 5 times its face value. That tout may then sell it on to someone else for 10 or 20 times its face value. That someone else may well be a supporter of team B. After all if there's only an allocation of 5,000 tickets and 20,000 team B fans want to watch the match, how else are they going to get a ticket?

So, the person who bought the ticket, a team B supporter, goes to the match and ends up standing in a section full of team A supporters. Consequently, he gets the crap beaten out of him when his team scores and he cheers.

So, in order to stop this, we have the words on the ticket: "not transferrable". Whoever buys the ticket has to use it. For matches where trouble is likely, show us a credit card or a driving licence or a passport or something else that proves you're the person whose name is on the ticket. Otherwise, you don't get in. This stops the market economy from setting the price of tickets, but it also stops people getting stabbed (at least inside the stadium) so we accept it.

Now what does this have to do with virtual worlds?

Virtual world objects and characters effectively have "not transferrable" written on them.

Why? Well there are many reasons why. Fairness is one of them - if I'm level 75 and know the game inside out and someone else is level 75 but clueless because they bought their character from someone who knows more than they did, then that undermines my sense of achievement. That's one reason, but, as I said, there are plenty. Some involve concerns about IP. Some are just "we don't know what can of worms we'll be opening if we allow it, so we won't".

The thing is, none of these reasons actually MATTER. The virtual world operators own the data, they govern access to the data, and they are within their rights only to allow players access to the data if those players follow their rules. So long as those rules are lawful (no "you can have a level 75 character for free if you set fire to a dog") then that's the end of it. They set the rules; if you don't like them, your only weapon is to threaten to play somewhere they set different rules that you do like.

IP arguments may underline WHY some virtual world companies stamp "not transferable" on their objects and characters, but IP law ISN'T necessary to determine whether trade in such objects is allowable or not. If I can't trade in soccer match tickets stamped "not transferable", I can't trade in virtual objects stamped (by the EULA) the same way. IP law is a red herring here.

Richard

[Ren]

20.

Between this place and MUD-DEV how am I supposed to hold down a decent quality of virtual life .

OK so can we stop talking about property and start talking about limits of contract a lot more?

I think a few posts have touched on this. Richard’s above hits it from the developer point of view. The EULA is a limited right to use. So the question is whether non transferability is applicable.

I think we need to take avatars and items separately. Reason being that item exchange is inherent to the game (as design) whereas avatar exchange is not – what’s more avatar exchange is a very different act as it involves transfer of the login account and stuff.

Can one of the legal eagles here confirm whether it’s likely that virtual items come under private ordering. As I think Dan noted it we make agreements about peanut butter sandwiches, the makers of peanut butter are not going to have a lot to say about it.

Avatars confuse me. Certainly selling them is a breach of the printed word of the contract. But as I have stated in my misuse of copyright argument; this is not a breach of copyright it’s just a matter of contract so why can’t players just ignore games companies and do it. In the case where someone is making a decent living from this trade, why can they make some sort of anti-trust claim if a games company gets in their way.

To take a software example- if my licence for MS Word says I cant sell my copy of word and I do – what can Microsoft do about it ?

Oh to note yet again - i am NOT arguing for avatar sales (in fact the opposite) i'm just trying to work out the current limits of law are.

Ren
www.renreynolds.com

PS - can i get an email notification if there is an update to threads ?

[Ren]

21.

Just to reply to myself. In the word example above I am asking specifically about the trnasferablity shrink wrap software. Another question is if MS could prevent users from transfering documents between each other. Avatars and items fall somewhere between the two i think as even with an avatar both players that are part of the deal generally have accounts and thus have paid for the liscencsed software.
ren
www.renreynolds.com

[DivineShadow]

22.

Ren,

I'm sharing your view here that avatar exchanging hands is a little different than items exchanging hands. Then again I have some doubts...

Discussing all this with a friend I'm coming around to a purer form of my thought controversy.
As I see it (non-lawyer) a license can specify what actions you are allowed to perform without breaching it, but can it also stipulate a set of forbidden motivators (which happen to be perfectly legal motives otherwise) for the *same* set of actions you are allowed to perform under any other motive?

The only instance I can think of is with employment contracts, where you have a contract specifying that you cannot have conflicting interests or overlapping committments. Then again, and counter to that, that is a contract to perform services and not a license to use a service.
Could, for example, the iTunes license state that I cannot listen to the music I license from them if my intent is to ehance my athletic performance while jogging? They can certainly limit me from the ACTION of broadcasting, or duplicating and selling, or reselling/rebranding, but they allow me to listen to it personally. Can they limit me in what my motivation for listening to it is? If someone pays me to listen to store-bought music, as could be the case of a DiscJockey searching for good songs for the next party, would he be breaching copyright law because his listening is motivated by a third party? If he used iTunes to listen (not copy, broadcast or perform publicly), would he be breaching their contract?

It would seem account transfers are not something you are being allowed to perform as part of most of these licenses, therefore no attempt is made to regulate your motives here, only your actions. Then again, complicating matters is the fact that while you may not be licensed to trasfer access to the service to an unlicensed party, on an Avatar sale the receiving party may already have a license to use the 'service' and 'content' without any specific limitations.
Furthermore, regulating other actions such as trading and services, which you are allowed to perform as part of your license, would seem to be a direct attempt to regulate your ulterior motives.

[Dan Hunter]

23.

To answer Ren's technical question: "can i get an email notification if there is an update to threads?"

We're not sure. You're not the only one to ask this. I've got a help request entered on this, and once I hear I will drop a note here, and put something in the Syndication notification in the right-hand bar.

[Richard Bartle]

24.

Ren writes: "The EULA is a limited right to use. So the question is whether non transferability is applicable."

I don't think there's any doubt that non-transferability IS applicable; as Greg said, it's "freedom to contract". The deeper question is whether there are any greater laws that override this applicability and, if so, under what circumstances.

Let's say I invited you to a dinner party at my house. At the appointed time, the doorbell rings and a complete stranger stands there. The stranger politely informs me that you sold them your invitation, and as evidence hands over the bottle of wine you were going to give me as thanks. Am I going to let that person through my door?

Well, that depends on the person . Am I obligated to let them through the door, though? No, I'm not. My invitation was (implicitly, in this example) non-transferable.

Now suppose next day an engineer from the local gas utility supplier shows up and tells me there's a suspected gas leak in my street. They flash all the credentials that prove who they are. They then ask to be allowed into my house to check that this isn't where the leak is originating. I didn't invite this person, and I don't want them stomping their muddy boots all over my house - especially if I don't believe my house has a gas leak. However, under UK law at least I have to let them in: it may be my property, but there's a principle at work here that says everyone else's right not to have the gas main explode supersedes my right not not have uninvited gas inspectors in the house.

Virtual worlds can put whatever arcane conditions they like on whether people enter or leave them. They can make arbitrary rules as to what people can and cannot do with their data, if they wish. Sometimes, though, there are greater laws that invalidate these rules.

Thus, there are two things that stop virtual world developers from making rules on a whim. Firstly, players won't play in virtual worlds that have too many rules they see as idiosyncratic. If you won't let me into your house unless I wear green, well, maybe I'm not going to visit your house.

Secondly, there are laws that cover what can and can't go into contracts (which is what these rules are - enforced by the EULA). It is this aspect that we need to be focusing on here. If I won't let you into my house if your're hispanic/female/hindu/blind, then I'm breaking anti-discrimination laws; my prejudices are legislated against.

It's important to distinguish between these two situations. If I won't let you into my house unless you say "open sesame" at the front door, OK, well you might decide to indulge me. Alternatively, you might decide it's evidence of dangerous mental instability on my part, in which case OK, don't come in - it's not the only house on the block. Of course, if I have an unreasonable hatred of people unable to speak and this is some wicked scheme for preventing them from getting into my house, you may decide to report me to the police instead. Also, if mine IS the only house on the block, you might be able to argue I'm setting unreasonable conditions on entering it. That's by the by, though.

Ultimately, virtual worlds can make any conditions they like, arbitrary or otherwise, on allowing people access to their data. Legislators, being based in the real world, can of course make whatever laws they want, arbitrary or otherwise, to govern virtual worlds. What we're arguing about here is the extent to which existing laws apply to virtual worlds, and whether new legislation should be formulated for them.

Unfortunately, laws are something of a blunt instrument. For almost every law or general principle you want to suggest, a virtual world can be created that flouts it for a legitimate reason. Earnest arguments over character ownership are completely academic in a world with PD; similarly, if the game allows characters (player and non-player) to steal objects from one another, your protests that you "own" the object because you paid $300 for it on eBay are irrelevant. You knew in-game stealing could happen when you signed up to play, so your objections are groundless if it does happen. It's like complaining that you paid $300 to own the world record for the high jump: you know that someone is going to jump higher sooner or later and "steal" it from you. There's also the little matter that it's not something that can necessarily be "bought" anyway...

For legal purposes, trying to make a distinction between characters and objects, of representation and structure, of copyright/IP and licence, is pointless: the world is defined exactly by the game engine; this program defines exactly what the game IS; anything the program does - arbitrary, planned, deliberate, accidental - is therefore exactly what you're paying for. You're paying to influence the program's manipulation of its data under the parameters of its actual construction.

Associating some of this data with "characters" or "objects" or "mobiles" is fair enough; making laws as if these were real characters, objects and creatures is not. Their state of existence is determined by the machinations of the game engine. Different games have different machinations, and it is a grave mistake to extrapolate from a handful of games legal principles that will then be applied indefinitely to all of them.

Just because one bunch of people thinks the kind of virtual world that they play in would benefit from externally-imposed regulations about "property rights" (or anything else), that doesn't mean those worlds played by other people would. Indeed, the very concept could kill some of these worlds stone dead.

Richard

[UnggiYoon]

25.

Thank You ALL for warm welcoming!

All,

as for me,

I had played RPG PC games (Ultima, Wizardry, Bard's Tale etc.) in my school days.

After passing Jurist Exam called "Sa-Beob-Go-Shi" in Korean which is similar to Bar exam in USA, I have studied CyberLaw, especially the legal matters of MMORPG.

Now I'm doing a translation of "The Future of Ideas" by prof. Lawrence Lessig.

Just like the feeling when I joined a in-game party as a RPG player, I joined this blog.

Again, I appreciate all your hospitality.

Greg,

The decision of our Fair Trade Commission 19-OCT-2000 is as follows. (I'm poor at englash writing, Sorry!)

[To ban the trade of account(character) or items is a matter of choice or free will by gaming companies just as they can set rules of theri commodity/sevices,

which is not regarded as a restriction on gamers'right of use/access in essence.

According to EULA, it's NOT a sale/transfer agreement which means the gaming company transfer the contents(items, charater, program or copyright) to gamers, But a licens agreement which means let gamers use/enjoy the online gaem service based on copyright of the company.

The infomation or database of the game like items/character is a part of the service, and the fee user pay is for the service as a whole, not for a item/character respectively.

And also considering the negative effect of the trade on real society, the policy of the gaming company & EULA is available.]

& neighboring right:
It's a kind of right for players (a singer, actor etc)or content provider(EMI,BGM etc) by means of IP law.

creater is to copy right,
then player, CP to neighboring right.

Julian,

That's right that in Korea, thieves of virtual goods are being arrested by the tens of thousands.

But in legally, they are prosecuted in the name of "fraud" or "a kind of data hacking" not "larceny"

Fraud: Tom induces Jerry to exchange her real money with his items. after receiving money, Tom vanished.

NOTICE: If Tom induces Jerry to exchange her items with his items. after receiving her items Tom vanished, then We can Not Punish Tom by fraud, because of no real money involved in this case.

Data Hacking: Tom steals Jerry's password or breaks into her account then moves her item data onto his account

In korean legal system,

items are protected as a valuable data not only for the company but also users in criminal affairs,

while in civil affairs, as abve metioned, it cut down to right to use/play set by EULA

--Unggi Yoon

[DuckiLama]

26.

I was originally crafting a response to Mr. Castranova's post about "Our customers expect a role-playing game with features that include a medieval atmosphere, a rags-to-riches storyline, " and then realized that I was just rehashing "Pay (Not) to Play" and missing the main thrust of _this_ article("too bad, too. I used the word "chimera". It was beautiful.) when an odd thought hit me...

Try shifting your paradigm(haha! I love saying nonsense like that!).
Seriously though, let's look at MMO*Gs and MU*s from a different angle.
These are, arguably (but not now), "games" in at least a very loose definition of the word, whether in-game or meta-game. Let's pretend they are games, even if you don't agree.

As games, the "things" your _character_ appears to "own" ingame are not things - they are points. The stuff (s)he owns are your score, an objectified representation of the points you have scored in the game thus far.
The only thing that enables you to sell them as though they were real things is that the game world is persistent and the objects in them are both persistent and portable within the game.

But they are really just points, similar to your experience points, but transferrable(ingame), portable, and persistent.

It is akin to a FPS player's rank on a tournament ladder or a high-score board on an arcade game. Except that technologically the player has the power to assign those points to another player's character.

I don't think anyone owns your points. It's just a score, albeit a highly objectified, persistent, transferrable representation of one.

Or am I just talking nonsense? Am I the only one that feels that "things" in Virtual Worlds are a way of keeping score, and as such, not really "property" in the real world at all?

[Dave Rickey]

27.

They are possessions in the same sense that things in the real world are, because human beings look at them and say "Mine". This is probably the first abstract concept a child learns, that there are not just concrete objects in the world like "teddy" and "mommy", but that some of them are "Mine!"

--Dave

[DuckiLama]

28.

@"Mine!" -
I can understand that why people _think_ they are possessions(that seems to be a sign of quality or strength of persistent suspension of disbelief), but I'm theorizing that they are, in fact, not "things" but "ideas". I may even be convincable that they are things that can be owned, but I'm leaning towards the ideas on the muddev post linked above, that even if they can be classified as real, they still aren't ownable(which doesn't mean I think they shouldn't be transferrable/saleable).

If I take a picture of the Grand Canyon, there's a lot about that that is "Mine!" but the actual Grand Canyon itself is not one of those. The "moment" is mine, the photo is mine, the sensations, the story, the memory - all this is mine, but the photo is just a portable representation of a point in timespace. I own the photo(screenshot) and can transfer ownership of that but not actual things depicted.

Not the best analogy, but the only one I can come up with quickly. I think I should have used something more "owned" than the Grand Canyon, like my neighbor's house, but I think the concept is (semi-) clear.

I'm feeling a bit lost, like I've fallen down a rabbit hole, trying to map real-world concepts to "imaginary friends". Every time I think I have a conviction, someone pokes a hole in it. This is all very convoluted.

[Dave Rickey]

29.

It doesn't help that some of these things are deliberately intended to evoke real-world comparison.

But in this particular case, the problem stems from the immaterialness and virtuality of property rights in the first place. If I loan you my lawnmower, there is no tangible link between me and the lawnmower, but it is still my property. If I sell you the lawnmower, it's still exactly the same lawnmower I loaned you, but it's no longer "mine", it's yours. Ownership is an artificial and sometimes arbitrary aspect of the physical objects it refers to.

To take it a step farther, my bank account isn't a stack of bills in the vault with my name on it, it's a database entry on a computer that says the bank has X amount of my money, and a promise from them they'll give it back to me whenever I ask for it. So my property rights extend to something that technically doesn't exist, as a "thing in itself", but simply as an abstraction.

The thing is, I don't own the database entry representing my bank account, and couldn't do anything with it if I did. I own what it represents. Players don't and can't own the database entries of their characters, they have no interest in owning "00100111010111010" in position 7A3F of index 0. What they feel ownership of is what the entries represent.

What is happening here is that we're being forced to confront the arbitrariness of "property" as a concept in an environment where all our usual absolute measures of inherent value and ownership are lacking.

--Dave

[DivineShadow]

30.

DuckiLama,

Want to get more confused? I can help!

These game items that you talk about are all highly structured ephemeral magnetic fields.

Then what is a "real" item? It is also a highly structured ephemeral energy construct.

What am I getting at? That what we call reality (or "real" or "virtual") is subjective, not objective.

This doesn't really help here, but it does tickle!

[DivineShadow]

31.

Dave,

"Players don't and can't own the database entries of their characters, they have no interest in owning "00100111010111010" in position 7A3F of index 0."

Yet, eventually, they can own it in as much as their e-mails stored locally. The technology (as well as some business models) are there to securely disperse these objects among owners, and have them interact in a centralized or even a semi-centralized environment that excecutes actions based on this data and charges for its compute time. This isn't any more far-fetched than e-tokens of currency and digital wallets.

As long as there is a mismatch between the present model of these games and our preconceived notions of ownership, rights and "things", we will keep colliding against this wall. Either our notions of ownership, rights and "things" will shift, or the model of ownership and rights in these games will shift - perhaps we will meet somewhere in the middle, but given the current conflicts change is inevitable.

[Ren]

32.

Richard Bartle wrote
>Secondly, there are laws that cover what can and can't go into contracts (which is what these rules are - enforced by the EULA). It is this aspect that we need to be focusing on here.

Yes, this is what I have been trying to get at for a while. We are talking here about the intersection between a number of areas of law:

Contract
Intellectual Property – copyright
Private Ordering

Actually I think there are more but let’s not complicate matters. Thus far I have not found out what the limits of contract are. I have posited that under the concept of misuse of copyright there is a very strong structural parallel with game companies trying to ban item trading – hence there is an applicable limit of contract here.

Can someone provide some test case references for transferability of property rights under contract, specifically intellectual property rights and software – its biggest piece missing in my legal jigsaw at the moment.

Oh and can we get away from the ‘0100110’ thing. Value is attached to things at different levels of abstraction, whether or not these are real is a metaphysical question (actually it ontological) that I don’t see much point in debating here, what level of abstraction we use is interesting in so much as one tends to define the level of abstraction by where one ascribes value hence there is a circular definition, or as Dave Ricky put it, its arbitrary (actually I think its contingent rather than arbitrary which is subtly different).

Or to put it another way, a currency note is just a piece of paper \ plastic, chains of carbon atoms, resonant nodes in superstrings, and as a physical object you the barer probably don’t own it, moreover if you look at is it my in fact state that it is not worth anything but rather it is the symbol of an agreement with a central back to pay you some sum – which of course is also just a set of atoms etc that represent value.

Property, value etc are socially constructed. This does not mean that they are not real, it does not mean that true propositions about them cannot be formed (Searle - The Construcion of Social Realty is a good read in this area). Moving on…

Ren

[Unggi Yoon]

33.

There are some civil lawsuits concerning this subject..

1. Webzen vs. Itembay (in Korean court)

Webzen is a korean gaming company famous for "MU-online" which is Lineage's rival in Korea, and No.1 MMORPG in China.

Itembay is the biggest item trading/brokerage company among other 130 companies in Korea.

The sales of the item trading market have exceeded that of MMORPG market in Korea.

This situation brought about countless cybercrimes, overheated competition for high staus in game,and a lot of money out of game.

So Webzen unsheathe sword against the item trading/brokerage companies last year & promoted a campaigne which slogan is "MMORPG is to be a game, Do not sell or trade item".
with real money"

However, the plaintiff, Webzen lost the case for soliciting provisional injuction . Webzen apealed to the high court, and then supreme court. But, the result was same.

The courts ruled that

the EULA is a kind of contract which only have a legal effect between the parties(company and gamer).

Whereas, the Itembay did'nt click the button marked as 'agree'. The Itembay need not to be bound to keep the clause of EULA restricting the sales of items for real money.

Even though admitting Webzen has copyrights over the in-game items, it can not baffle the judgement above.

ps. Mu-Online is to be ranked in 100K Group Asia

2. WEMADE vs. SANDA (in Chinese court)

A Korean gaming company,'WEMADE' sued a Chinese company,'Sanda'for copyright infringement/breach of licensing agreement in PEKING district court last month.

WEMADE that developed the Legend of Mir(a korean word means dragon)2. gave a license to SANDA for doing service the game in China.

As soon as the licensing term expired, the SANDA launched its MMORPG called "Electronic World" in translation. Then the conflict between two companies occurred.

Major issue is whether SANDA had stolen the player database(which contained character's status, record of item, etc.)of Legend of Mir to facilitate chinese playes' emigrating into its game.

There is a Korean proverb that says a shrimp is crushed in a battle between whales.

While each company claims rights over the player database respectively, the interests and privacy of players are ignored and untouched.

[Estariel]

34.

Contra Ren, and with Dave and DivineShadow, I am intrigued by the notion that both my EQ character equipment, and my real world bank account, are both ultimately only stored as computer data.

Is my bank account any more or less real than my EQ kit?

Could my bank alter its terms of service to grant itself rights to arbitralily alter or withdraw my ability to demand conversion from them of the digital record into folding bills?

Could my bank (or government) ask Ebay not to accept transactions in UK Sterling on the basis that the bank notes are actually promises owned by the central bank of England?

On another matter I am curious as to the basis on which the game company can act against external item trading. Within the game realm, (and I suggest, within the remit of the EULA) the transaction is a gift of an item. The EULA does not prevent me from giving items to other players.

External to the game, and (I think) external to the reach of the EULA, the player I gave an item to, may choose to give me a gift of realworld currency. As he is entitled to do.

Granted, I may not be able to enter into a legal contract to bind this transfer, because I dont truly own the game item. But if I am happy to take that risk, I can.

Supposing the game company then withdrew my contracted service on the basis that I had sold an ingame item. Have they thereby accepted that I did own the item? Because if I didnt own it, then surely I cannot have sold it, in any legal sense. Their terms of service may be able to prevent me entering into a legal contract to trade the item, but cannot prevent me giving it to another player for any other non-binding recompense or favor, ingame or outside.

Does a winning bid at EBay constitute a legal contract? Or is it just a customer-buyer matching service?

[DivineShadow]

35.

"Is my bank account any more or less real than my EQ kit?"

Just as "unreal". But there's a big difference: The bank account has lots of laws and regulations behind it.

"Could my bank alter its terms of service to grant itself rights to arbitralily alter or withdraw my ability to demand conversion from them of the digital record into folding bills?"

Yes. But not without legal and criminal repercussions.

"Could my bank (or government) ask Ebay not to accept transactions in UK Sterling on the basis that the bank notes are actually promises owned by the central bank of England?"

Yes. Your government can do anything, and attempt to enforce anything. They are the ultimate authority over the residents of the regions they enforce life/death over.

"Supposing the game company then withdrew my contracted service on the basis that I had sold an ingame item. Have they thereby accepted that I did own the item?"

Nope. Selling something doesn't mean you own it. Their beef would be that although you have control over the data in question, you did not have a right to sell it. You were licensed access to the data, but no right to either sell that access or resell part of the data therein.

"Their terms of service may be able to prevent me entering into a legal contract to trade the item, but cannot prevent me giving it to another player for any other non-binding recompense or favor, ingame or outside."

Lets assume, for the sake of argument, that all the data in their systems is their intellectual property. They *could* disallow you from releasing/trading/altering in a way they so choose any specific data held in their system, by specifically licensing against your alteration of that data in the ways they don't want you to - They already do that in the parts of the EULAs that deal with hacks/cheats. That's perfectly legal and enforceable as far as I know. The meat of the matter with trades is that the user you gave the item to is also a licensed user of the database and it's contents, and the action of giving another user that piece of data (or altering it in the specific ways you understand as 'giving an item' as well as receiving the data or having it pointed to you) is an action allowed in both of your licenses. You violated no clause of your license in so doing. If there was an external transaction that occured among the same parties, that is beyond the scope that your license the game company has with you. The game company cannot hope to restrict your actions beyond what it truly owns. Your eBay account, your use of your bank account, the ICQ service, etc. are not something you licensed from them. Any change that takes place in the data -if you were licesed to perform it- is legal for you to perform regardless of external factors.

[Bob Kiblinger]

36.

Well, I have been involved in the selling of SWG items up until last night. Without any warning all of my accounts were banned by SOE and I received this email:

"Your Star Wars Galaxies account with the station name of xxxxxxxxx, has been suspended for up to 10 days with review for further action, for violations of our Terms of Service Agreement: specifically, the sale of in game credits on Ebay. At the end of the suspension, we will determine if further disciplinary action needs to be taken, and contact you with our decision. If there is further change in status to your account, you will be contacted at this email address. If you have any question regarding the station of your account please email [email protected]

Sincerely

Ethan Nason
In-Game CSR
Star Wars Galaxies
Sony Online Entertainment
[email protected]"

Apparently SOE actually employs a person whose sole job is to scour the ebay boards, purchase ebay auctions, and then ban SWG accounts of the ebay seller who sends them credits. Sounds like entrapment to me?

I have been running the site www.uotreasures.com - and have been selling Ultima Online items for close to 5 years now. I wanted to give SWG a try but after a month of strong sales I am now out of luck. My argument would be that once I use my money (or the same reasoning could be used with time) - the virtual good now has real, tangible value. I know what SWG's TOS states, but just because they state it doesn't make it an absolute truth. I am at the point now where I might be interested in challenging the "intellectual property" argument in a real courtroom. Even if I lose, at the very least it would set a legal precedent and perhaps permanently settle the “intellectual property” argument. Any thoughts on this? I think it's time someone made the game companies provide logical, legal reasoning to their own TOS. Mr. Koster where are you when I need you?

Bob
www.uotreasures.com
www.swgtreasures.com

[Edward Castronova]

37.

Fascinating.

Well, someone's going to make a real challenge eventually.

[Cory Ondrejka]

38.

To expand on Greg's point from a month ago (too busy releasing Second Life 1.1 to read so now I'm playing catch up), it was pointed out recently that there is limited (no) case law covering whether or not a corporation can restrict the individual's real-world right to copyrights -- specifically if an in-game item supports text, I can write a story and stick "Copyright 2003 Cory Ondrejka" into it. While the EULA may say that I have given Sony (or whoever) all the rights to this it hasn't been fully challenged. This gets even more interesting in a world like SL where users are writing script code and creating real, operating content rather than simply repurposing content that the developers created (to DuckiLama's points).

I spend a couple of hours on Friday reading through the EULAs of every game I could find and it was interesting reading. Perhaps most interesting, from the viewpoint of SL where we are trying to maximize user innovation, is how EVERY game EULA restricts use of the product for any purpose other than as the game the designers (publisher) think that they released. Photoshop doesn't have a section about what you can do with it but Quake 3 does (and this from a game and company that is extremely focused on mods, Machinima, &c)! I'm not a lawyer, but reading them narrowly would seem to indicate that using the Halflife engine, for example, to create Machinima is a violation of the EULA. Hell, Bioware's NWN EULA is great -- if you distribute a module you have granted Bioware all rights to it, including the right for them to sell it :-)!

[DivineShadow]

39.

Bob,

Disclaimer: Don't take legal advice from me, I'm not a lawyer.

"My argument would be that once I use my money (or the same reasoning could be used with time) - the virtual good now has real, tangible value."

Hmmm. Nobody ever argued that the item had no value, the game company argues it belongs to them, not you. You would need to prove there was value there that rightfully belongs to you and they have misappropiated it. Keep in mind the EULA, though. It says it all belongs to them; if they can legally do that is still a little dubious. You might have a shot there. Than again, raising mass awareness of hidden value in gameworlds might put the MMORPG industry in a tough spot with governments, perhaps tight enough that they might push out this value into player-ownership. Looks like a long shot to get your accounts back, but I wouldn't discard it from the bag of tricks just yet.

They're trying to terminate your accounts for breach of contract, and they have. If you take them to court you're going to have to prove you did not breach their contract and therefore they had no right to terminate your account under those provisions.

The provisions state that you will not sell anything relating to SWG (in nicer terms). To prove you did not breach your contract it seems you're going to have to prove that that part of the agreement is either null in some way or doesn't apply to you.

It might not apply if you're not selling it yourself, but acting on behalf of someone. Granted the contract also talks about "assisting the sale", just what this means or the limitations of this seems to be a point of debate.

The clause may be null if you prove they cannot bind your actions outside the licensed service. (Humorous: Could they state that you can play SWG as long as you don't eat a tuna sandwich while playing? Then they call you up, offer a Tuna sandwhich and ban you if you take it?).

There actually seems to be quite a few holes in the armor and quite a few ways to go about this. A good lawyer is certain to give you real help (and not babble like me). But let me leave you with a question:
Why were you banned and mysupersales.com and IGE.com were not sued into oblivion?
You didn't trade in EQ things, but on the SWG front your piece of the market was probably an order of magnitude smaller than both of those guys. Hmmm... Something smells really bad.

PS: Go talk to a lawyer. If you lose, you lose money, if you win, you win a market. Need I say more?

[DuckiLama]

40.

Cory O. - "I spend a couple of hours on Friday reading through the EULAs of every game I could find and it was interesting reading. "

This is the only site I can imagine reading this and not being amazed. The only person I know that actually reads EULAs is my wife. I tried doing it for a while, like with EQ/DAoC patches, but quickly returned to the simple "Click Accept" method.

Which brings us to an interesting point, though one that probably no longer applies to Bob.
I vaguely recall a ruling fairly recently(within a year?) where the court said you can't enforce a EULA because you can't prove that people read them, and in fact, most folks don't.
I don't.
Those that do often don't understand them. At what point does a "contract" become binding? IANAL, but if you can prove either ignorance or incompetence at the time of signing, can't you "get out" of the contract?

Am I the only one that recalls that case, or am I recalling it incorrectly?

I will second DS's suggestion - do go talk to a lawyer - preferably a tech-savvy one - no lawyer worth his/her salt is going to charge you for an initial evaluation of your case. At least I've never been charged for an initial interview.

[Bob Kiblinger]

41.

Well, the point that I would like to challenge is that the game company owns everything - that all parts of the game are its "intellectual property". I am not really interested in getting my accounts back at this point (although I wouldn't mind it :)). The strange thing about SOE is that they apparently have no problem with websites (like Yantis or IGE or mine for that matter) - but they do have an employee who is going after ebayers exclusively. Even stranger, all SOE has to do is send one letter to ebay requesting they remove all SWG auctions, and ebay will do it no questions asked. Ebay has done that previously with Shadowbane and Everquest. Instead, SOE is using a more direct approach, going after the large ebay sellers one at a time - cloak and dagger-like. Another interesting question is how can they pick and choose who they go after? Apparently they are going after larger sellers, and leaving smaller entities alone. If it is truly against their TOS to sell OR buy these items on ebay, it would only seem right that everyone involved gets banned. I sold SWG items to 2,000 different people last month alone – the people who bought the items are just as guilty as those who sold the items if you are going to enforce the ELU. That would mean in addition to myself, they need to ban 2,000 more of their customers. Take that across all ebay sellers of SWG and there are realistically 50,000-100,000 people that have bought or sold SWG items on ebay. Thus, if they truly want to enforce their TOS they are going to have to ban about ¼ of their subscribers. Of course they won't do that, as this would hurt their own bottom line. Perhaps I will get together a list of my 2,000 customers, email it to SOE, and ask that they all be banned along with me for committing such a heinous act against poor SOE? Therein lies the problem. Sony doesn't really care if someone pays $5 for 100k credits - they are really only after large sellers. How can they pick and choose who can and who can't buy/sell outside of the game? Almost a type off discrimination - if you are really good at buying/selling we will ban you, if you just do it casually we will leave you alone. The fact is the majority of gamers like to have the ability to save hours of their own time by spending $20 here and there. Anyways, getting off on a tangent, but I just might call their bluff soon. I was buying and re-selling items, not producing them myself, so I was really acting like a broker between buyer and seller. There aren't many tech savvy lawyers in my neck of the woods - but I do plan on running it by a couple I know and seeing what I can do about it. Of course, in their ELU they state they can only be sued in the state of California - lol - they think of everything.....

Bob
www.uotreasures.com
www.swgtreasures.com

[Bruce Boston]

42.

"Take that across all eBay sellers of SWG and there are realistically 50,000-100,000 people that have bought or sold SWG items on eBay"

WOW.

Assuming that SWG has had approx 300k members that would suggest that approx 16%-33% of all members have bought or sold on eBay. If thats true, SWG is going to have to figure out a single policy for this sooner or later.

The last thing that any community wants is for a gray market to turn into a Black Market, but this is what would be expected if the rule is that its not illegal to do it, just illegal to be caught. The split policy approach sounds more like a dysfunctional 3rd world country's tax code than a entertainment company's equatable solution. Again, if the popularity is this high, its only a matter of time before the Entertainment companies figure out that there is an opportunity here.

I also think its important to note that allowing eBay sales would be no small task for Sony. Somehow they would have to come-up with a Customer Service plan to facilitate that privilege. And simply baning all eBay sales is no easy task either, as its just as easy to create a black market that way as well.

The real key would be to find a way to make these gray markets, legitimate markets. That would take either Sony selling the currency themselves, and possibly buying it as well, or creating a system like eBay Power sellers that points members in the direction of a low risk solution to buy and sell currency.

I am also leaning very heavily in the direction that bans all sales of non-currency items outside of a VW, as this simplifies the implementation of any policy that legitimizes outside markets.

[DuckiLama]

43.

""
"Take that across all eBay sellers of SWG and there are realistically 50,000-100,000 people that have bought or sold SWG items on eBay"

WOW.

Assuming that SWG has had approx 300k members that would suggest that approx 16%-33% of all members have bought or sold on eBay.
""

I'm not sure I buy that math.
Yes, 50,000 - 100,000 IS indeed 16-33% of 300,000.
But I'm not buying the assumption that you can map 50,000 sales => 100,000 DISTINCT subscribers.
It _might_ be true, but even distinct eBay users cannot be assumed to be distinct SWG subscribers, IMO. Well, that's not true. It _can_ be assumed, but I don't think it's a particularly "safe" assumption.

Correct me if I'm wrong, as I'm not schooled in statistics or scientific analysis, but that just seems a bit free and easy with the numbers.(not that it's insignificant, just seems to have a high margin for error).

[Bob Kiblinger]

44.

Well, 50,000-100,000 is an off the cuff estimate, but I can assure you it is close to those numbers. I personally track each person I sell items to, and in one month I sold SWG items to 2,000 unique individuals (I was not the biggest SWG seller btw). SWG has been sold on ebay since July, so multiply 2,000 times 4 months and that would be roughly 8,000 unique buyers for me alone. Since I am probably less than 5% of the entire SWG market, 50,000-100,000 would be conservative. There is no way SOE would actually enforce their TOS - that would mean the elimination of 1/3-1/4 of their customer base and a HUGE monetary loss. However, they should not be able to pick and choose who they go after, it has to be all or nothing in my mind.

Furthermore, the grey markets (or black markets if you prefer) are exactly what happened with Everquest. Everquest went about it a different way - they simply contacted ebay and ebay pulled all auctions related to EQ items. Websites popped up selling EQ items direct, most without the security ebay allows. The most visible example is www.playerauctions.com - you can still buy and sell anything you like for EQ on this site - and EQ could care less about it (at least they do nothing about its existence). Not sure what the game companies have against ebay - but they need to enforce it across the board (i.e. every single person who buys or sells an item) - or get rid of it all together. One man's severely biased opinion :).

Bob

[DivineShadow]

45.

"Of course, in their ELU they state they can only be sued in the state of California - lol - they think of everything....."

That states they'd *like* to be sued in California, but the moment they allow their product to cross international borders their actions have wider implications. If you're dubious about US-based action these may sound far-fetched to you, but remain a possibility with very deep ramifications: International action, restiction of trade, unlawful embargo, discriminatory trade practices, import/export duties, subverting a country's monetary policy... The list by no means ends there.

Frankly, they're going to have to find a plumber to fix the leak, or accept a wet house, getting a bigger bucket only takes you so far. And as long as they keep hammering this pipe they're just asking for the line to burst.

[Dave Rickey]

46.

The one thing there is precedent for is the jurisdiction issue. Before Black Snow pulled a fade and quit paying their lawyers, the federal judge for the district they sued in (northern California, I believe) found that the EULA had to be adjudicated under the laws of Virginia (one of the few UCITA states where "shrink wrap"/"click wrap" is legally binding by explicit statute).

Mythic actually *was* a Virginia based corporation, and SOE is a California based company, so outside of Texas and Missouri (the only other places they have physical presence), you'd have the same precendent to deal with.

--Dave

[B. Smith]

47.

May or may not be relevant. But I spent three years as a professional headhunter, placing applicants with clients all over the USA and points outside. Along the way I learned a little Human Resouces law that might apply here. I am referring to the difference between enforceable contract requirements & lawful activity.

In essence, you can write a contract however you like. But if any aspect of your contract run into conflict with a person's inherent rights as a citizen, then the contract is unenforceable.

Example: The right to quit. Under US law any employeee of anyone except the federal government has an inherent right to quit any job. You cannot contractually compel someone to continue working for you. If their contract specifies a particular term of service, and/or a particular set of tasks to complete, and they leave before that is finished you have the right to sue under CIVIL LAW for breach of contract. But that is it.

Another example: Non-compete agreements. Many companies require emplyees to sign non-compete contracts as a condition of employment. These basically state that you may not work for any competitor for a set period of time after leaving your current employer. These things are an umitigated pain in the arse to anyone in Human Resources. They have been upheld in a hundred jurisdictions, and declared unconstitutional in a hundred more. There is no consistency. As a rule of thumb, and contractual agreement that restricts a persons inherent constitutional rights to freedom of speech, freedom to associate, freedom to travel, freedom to pursue their craft, freedom of the press, etc. is considered un-enforceable.

So it looks to me, in the event that similar reasoning woudl hold true outside of the human resources arena, that the game sompanies are up a stump. If you allow the in-game transfer of in-game items, then you can't allow some people to do it and stop others. Either anyone can do it, or nobody can do it. And under law, the game company has no authority to interfere with a persons inherent right of association. That is, they have no legal standing to stop anyone from associating or discussing thigns with anyone they please. If, during the course of this discussion, I hand my buddy $5 it is outside the purview of the game sompany to object. And if, the next day, he hands me a light saber while we are both in-game, then full compliance with the rules of the game have been maintained.

A contract is only a contract, legally binding, IF it does not transgress on a person's inherent rights as a citizen. In employment law anyway.

[Jessica Mulligan]

48.

And how about There? Since they sell items for real world money, do the users of There actually own those items, or is it just a lease?

[Jessica Mulligan]

49.

But wait; there is more! :D

If I read the post from Mr. Yoon corrctly, it would seem to state that the sale of MMP items was found to be unlawful. However, from what I understand, NCsoft in Korea actually encourages the sale of rare and unique items as a promotional tool by providing them directly to third party agents for just that purpose. Does this violate Korean law?

[Richard Bartle]

50.

Jessica Mulligan>Since they sell items for real world money, do the users of There actually own those items, or is it just a lease?

Or is it something else entirely? It may be "permission to use", for example, or "payment for service".

If I pay money to watch a sporting event, I don't get to own anything. I'm paying to watch people do things to a ball. I can pay more to get a better seat or a better view, but I don't own it or even lease it.

Richard

[DuckiLama]

51.

What a wonderful comparison, Mr. Bartle.
Which, I imagine, also brings the comparison of eBaying and ticket reselling/scalping, at least it did to me.

[Bob Kiblinger]

52.

Well, the difference is, at a football game you are WATCHING someone else throw a ball. In MMORPGs - you are throwing the ball yourself. It is your time (or money) that causes events to transpire within the game - and enables you to reap the rewards. You are not passively watching something, you are actively causing things to happen. Big difference in my mind.

[DuckiLama]

53.

I think it may be a combination of the two.

Sure, your own physical actions are causing things to happen, but who's ball are you playing with, on whose property?

Don't get me wrong, I think players have _some_ kind of ownership rights/priveleges, but I don't think they are total. Especially since they didn't build the stadium, didn't bring their own ball or uniform, and are playing by someone else's variant of the rules.
Could they get a sandlot game going and avoid all this hassle? Probably, but they'd rather play in the big stadium with real uniforms, referees, lights, and maybe even an announcer.

It's an ugly, thorny issue with no clearcut answer. I don't envy the judges that eventually wind up having to decide this one.

[Cory Ondrejka]

54.

But what about when they did build the stadium, the ball, the uniforms, and created the rules? Does the discussion change when the users aren't just using (or repurposing) content provided by the game's creators? What is required for the content's description to change from "modified" to "created"?

[Jeff Cole]

55.

Be careful, though, Richard.

I assume (I have not played) that in There, the item you purchase includes "permission," a "license," to dispose intra-game of the item in manners which mimic extra-game ("real world") property rights.

So, it is more like:
1. you purchase season tickets for a sport;
2. you purchase from the stadium some tchotchke that you cannot remove from the stadium;
3. you agree that (1) you will trade tchotchkes with other fans only in exchange for another tchotchke, soda, or hotdog; (2) you will not trade tchotchkes for dollars, pounds, or any other currency; and (3) if you do, your season tickets will be revoked.

That is, in these games, we are not paying strictly to observe, we are paying to participate. And, that participation *encourages* players to assert what are extra-game property rights (even to the extent that they are limited by the EULA and the requirement that the servers be running).

Jeff Cole

[DivineShadow]

56.

"If I pay money to watch a sporting event, I don't get to own anything."

Oh but you do! You have essentially a contract with the stadium stating that they will allow you to enter their private property at the specified date/time and for a specified duration.

Similar to VWs: You enact a contract for access to a private online database.

The similarities are not in the physical realm of comparing the field to the servers and the ball to some ingame item, and Soccer rules to a TOS. Thats mostly going to lead us astray. The similarities that can help us break the fog here lie in the contracts and the law.

[Richard Bartle]

57.

DivineShadow>"Oh but you do! You have essentially a contract with the stadium stating that they will allow you to enter their private property at the specified date/time and for a specified duration.

So what exactly do I "own"? My half of the contract?

Richard

[Richard Bartle]

58.

Bob Kiblinger>Well, the difference is, at a football game you are WATCHING someone else throw a ball. In MMORPGs - you are throwing the ball yourself.

I know the difference between watching and playing. My point was that it's possible to pay money for entertainment without having to own or lease anything.

If you want different analogies, hmm, well there's karaoke ("that's MY microphone!"), pony trekking ("that's MY pony!"), bingo ("that's MY number!"), dining out ("that's MY messy plate!"), single-player computer games ("that's MY power-up!"), tourism ("that's MY view over the Tiber!"), ...

There are plenty of occasions where people get the use of something without owning it, even if they had a hand in creating entertainment with it.

Besides, people at sports games DO contribute. If you were the only person in the crowd at a big game, it wouldn't be great entertainment.

Richard

[Bob Kiblinger]

59.

Richard - the point I am trying to make is that the amount of time (or money) you spend in the game is directly proportional to the amount of virtual wealth you accumulate. If you spend 12 hours mining iron ingots - you have yourself 12,000 ingots OR 12 hours of your time worth of ingots. If you mine 1 hour, you have yourself 1,000 ingots or 1 hour of your time worth of ingots. Because the laws of supply and demand inside the MMORPG mirror the laws of supply and demand in the "real world" - some avatars within the game will become more powerful (or wealthier) than other avatars. Since advancement and wealth within the MMORPG is based on the amount of time you spend playing, and some people simply do not have time to give, they choose to use their real life money as a substitute for their real life time. In our capitalist society, everyone should realize that time and money are the same thing, and if $5 buys me 5 hours of time to do something I actually enjoy - then by darn I will spend that $5. That is how the MMORPG becomes a real, tangible market - money and time become interchangeable. Now, the game companies come in and say, "we don't care how much time you spend, everything you produce with your time or buy with your money is still ours". Doesn't make any logical sense to me?

As you can see, this is a much more complex situation than buying a ticket to a movie or a football game - especially since the virtual worlds are important enough for some people to spend hundreds of their hours or thousands of their real life dollars. For most types of entertainment, you buy your ticket and vicariously live through what you see. For a MMORPG, you pay your monthly fee but you decide what your experience will be - entirely based upon the time or money you put into it. The closest thing you can compare it to is a work of art. In a MMORPG - you are the artist - deciding what to do, which skills to advance, where to go, how to spend your time - and the end result is your in-game persona - YOUR work of art. This work of art would not exist if you, yourself, had not created it. The gaming companies saying they own everything that you create is like saying since DaVinci used a Fuller brush to paint one of his masterpieces, then that masterpiece belongs to the Fuller brush company. A stretch I admit, but not any more so than the football game analogy. Either way, I would like to see it decided once and for all in a court of law. It is a catch 22 however - gamers don't have the money to challenge the large companies - and the large companies don't want to challenge the gamers because there is a very real fear they might lose.

[Jeff Cole]

60.

Richard: "If you want different analogies, hmm, well there's karaoke ('that's MY microphone!'), pony trekking ('that's MY pony!'), bingo ('that's MY number!'), dining out ('that's MY messy plate!'), single-player computer games ('that's MY power-up!'), tourism ('that's MY view over the Tiber!'), ..."

How appropriate are those analogies, though? In none of them do the proprietors expect and encourage a particpant to treat the items as property. At no point is even the illusion of ownership perpetuated.

Bob: At the end of the day, in exchange for access to the gamespace, you agreed (or, and all that matters legally, is Sony is reasonable in interpretting your clicking-through as your agreement) not to sell items. You breached. They suspended.

It's not likely at this point that any court is going to find that the EULA's provisions proscribing selling of items/accounts is an unconscionable provision in a contract of adhesion and ,therefore, unenforceable.

What's more, a court is not likely to be very sympathetic to your position because you have made a cottage industry of acting in bad faith in the contractual relations. And, then acting indignant when you get called on it.

Jeff Cole

[Greg Lastowka]

61.

Putting aside issues of EULA enforcability and apropriate anologies for a second, I wonder if there is any policy argument to make about the existence of unregulated markets?

See, e.g., vice markets in the United States, for, e.g., illegal drugs. The analogy is of course not correct, because the player-to-player markets for virtual items is not, imho, criminal (putting aside exploit-based markets, which may be), and, at least in the view of most people, does not cause serious harm to the participants or society at large. (I realize there are multiple views on that.)

The point is, though, that some have argued that markets for illegal drugs should be regulated because society is not willing to pay the full costs for enforcement, and the rules that forbid the markets are unenforcement, well, regulated markets are better for society than unregulated markets. So the idea would be that *even if* we give designers a trump card over virtual asset traders in courts as a policy matter (and I'm leaning toward that position in all but some exceptional cases), there may still be a need to validate and regulate out-of-game trades if that kind of regulation would function better than an unregulated market where we presume that all player-to-player trades for real value are null and void ab initio...

[DivineShadow]

62.

"So what exactly do I "own"? My half of the contract?"

Yes.

"My point was that it's possible to pay money for entertainment without having to own or lease anything."

I believe you are incorrect. There are explicit and implicit obligations that arise from "paying money for entertainment" that are as real as everyday objects. Just as law gives very real properties to Corporations, law also gives very real properties to contracts.

[DivineShadow]

63.

Jeff,

"You breached. They suspended."

What makes you so certain he breached his contract??

[Bob Kiblinger]

64.

The point is, if somewhere deep in the fine print of their contract it says "if you click on this button you agree that we now own your soul, your home, and your first-born child" - that doesn't make it an enforceable contract. My dispute is that the contract is a crock - it infringes on my personal rights and I don't think it is enforceable.

[Jeff Cole]

65.

Greg: I agree. The question then becomes, who regulates it. I think the responsibility on regulating these markets should be internalized within the developer-subscriber relationship. That is, Sony's threat of legal action against E-bay (or another of it's ilk) should hold no water. Sony should have to directly police their playebase. It is dangerous precendent indeed to even entertain the idea that the developer should have such an equitable remedy-- especially given that their damages will be usually non-existent.

Bob: You right, they probably can't enforce an action for your soul, house or first-born. But those are completely different from having you agree not to sell game-items for real-world money.

You do not have any inalienable "right" to access their world only on your terms. They expressly prohibit your activity and everytime you log-in and agree to t EULA you are doing so in bad faith.

It is your Constitutionally protected right to contract. By agreeing to the EULA, you agree not to contract to exchange for real-world money in-game items. Pretty simple, really.

Every conract by definition restricts both parties' rights to some extent.

You don't even come close to being the test-case that is going to delineate any line in this sandbox.

Jeff Cole

[DivineShadow]

66.

Jeff,

You are constantly assuming the EULA that bound Bob is *perfectly* binding in all it's clauses, does so without limitation or exclusion, and furthermore US law has jurisdiction over the entire universe. Don't you think that's a bit of a stretch?

[Bob Kiblinger]

67.

I agree with Divine - my opinion is that my in-game creation does indeed have rights - proving that in court would be the whole point of challenging the TOS. Sony might own the bits of data and the software package as a whole - but they do not own my time, or more importantly my money that I invest in my in-game creation. At least, that is what my arguement would be.

[Jeff Cole]

68.

Not at all.

The reality is, though, that some state's law would determine the contract issue.

And, the law (whichever state's law governs-- I haven't looked at the actual EULA) is going to assume that the provisions are enforceable. That is, Bob would have the burden of proving that they (it) are (is) not.

Provisions much more onerous have been enforced on consumers here in Texas.

That said, and assuming the "jobbers" aren't duping the items, I find developer opposition strange. I think it is largely irrational.

Jeff Cole

[Jeff Cole]

69.

Bob, even *if* you do own it, you *own* it subject to the EULA.

Real and personal property is sold all the time with restrictions. Those restrictions don't mean that the owner doesn't "own" the property, it just means that they own it subject to the restrictions.

Jeff Cole

[Edward Castronova]

70.

The law and the citizens interact. Law isn't permanent. So, an argument "that's what the law says" doesn't have universal, infinite purchase. On the other hand, law changes slowly. As they say in German, "was noch nicht ist, kann noch werden" - that which is not, may yet become. If Bob goes to court tomorrow and loses, I won't be convinced that EULAs are the end of the story. If he wins, I won't be convinced that developers are forever powerless to shape the worlds they make.

We have to look to Greg's point above: there are reasons independent of current law and policy that argue for this or that best structure of law and policy.

So, while we can discuss whether the EULAs of today will or will not win in US courts, it's also interesting to discuss whether they *should* win. Put another way, what kinds of EULAs serve the common good? In the long run, those are the EULAs that good law must uphold.

[Brian 'Psychochild' Green]

71.

Legal issues be damned, this is about something much more important to the developer: the right to say who can and cannot play the game.

No player has any inalienable right to play a game. You are there on the good graces of the developer who is hosting the service and storing the character data. If you do something to displease the developer, you can't play. This isn't about the enforcability of EULAs. This is about the developer deciding that you can't play anymore.

Take away this ability to bar people from the game, and the developer has to allow dupers, exploiters, cheaters, etc. to remain in the game. These people are (ab)using the game system to achieve these effects; in fact, many cheaters claim, "if the game lets me do it, it should be allowed!" The only thing keeping these people from ruining the game is the developer's ability to step in and ban their access to the game.

In the end, the developers control the world and who plays in it. If I decide to refuse you service as a customer of my game, then there's nothing you can really do about it, regardless if I did it because you were cheating, breaking an arbitrary rule, or whatever. If you don't like the policies, then move to another world. There are plenty of them out there to choose from. If the policies of one are too restrictive, then quit playing the martyr and go earn a living in a world that will support your playstyle and business inclination.

My thoughts,

[DivineShadow]

72.

"Take away this ability to bar people from the game, and the developer has to allow dupers, exploiters, cheaters, etc."

Thus far the only "Inalienable right" I've seen discussed was the right to recreation Edward cited in one of his recent papers. While the paper itself argued for special laws to be enacted for two very distinct classes of games a chill ran down my spine thinking about the dark consequences of exatly the same thing. If there is an inalienable right to enjoy this form of entertainment -by anyone- then we have a problem. Or we need special laws to make special exceptions to override an inalienable right. Hmmmmm. Danger!

Let's leave the inalienable right thing where it is. With that out of the way, it's easy to block dupers/cheater/exploiters by using a license, since none of those actions are ever permitted and they fall completely within the domain of licensor (if players have no rights to the data). Furthermore regardless of who owns the data those actions fall between vandalism and theft. And in the US, even if players owned the data, the almighty DMCA (Digital Millenium Copyright Act) makes all that illegal without you even having to state it in the EULA. I never thought I would see something good come out of the DMCA, but there you have it.

"In the end, the developers control the world and who plays in it."
Yes. But... The criteria has to be *crystal* clear. Furthermore, you cannot decide it on race/creed/sex/nationality and a bunch of other things. Essentially, you cannot decide it based on anything that exists outside the game or you open yourself up to all the nastyness we're talking about here and a whole lot more depending what you fancied for keeping people out. There are very special laws that allow *very specific* service selection criteria to come from a different domain, such as a credit reporting agency, a financial institution, an accrediting institution, a health organization, etc.; and even data within your own domain is subject to laws that regulate how you can use it internally - witness HIPPA (Health Insurance Portability and Accountability act of 1996). (The US is by no means alone or the leader here, EU laws regarding customer and employee data privacy are even stricter.) Just to be clear and recap my understanding: You can ban users for activities against your TOS, but you cannot make up the criteria based on anything outside of your service unless you are backed by a law that specifically allows you to do that.

[Richard Bartle]

73.

Bob Kiglinger>The gaming companies saying they own everything that you create is like saying since DaVinci used a Fuller brush to paint one of his masterpieces, then that masterpiece belongs to the Fuller brush company.

If the Fuller Brush company only allowed Leonardo to use their brush on condition that anything he produced was theirs then yes, it WOULD be theirs.

If you come into my house, pick up a can of spray paint and cover my wall in some artistic masterpiece, you don't get to own it. If I invote you into my house and give you the spray paint and ask you to paint a masterpiece on my wall, you still don't get to own it. Of course, if I were to demolish my house and try to sell the wall you may have something to say about that. However, if you know the rules when you paint the picture, you don't get to change them afterwards.

When children at play groups make things out of Play Doh, they don't get to take them home. Those things just get mushed up so some other kid can make something out of them the next day. Those little works of art that the children spent 30 minutes making are destroyed. That's part of the condition of using the Play Doh.

You get to use digital Play Doh and you want to keep your models. When you signed up to use the Play Doh you were told you couldn't. All that meaning and emotion you've imbued in your digital Play Doh character is worth nothing if you knew when you started (because you read the EULA) that you didn't get to keep it.

Richard

[Richard Bartle]

74.

Jeff Cole>How appropriate are those analogies, though? In none of them do the proprietors expect and encourage a particpant to treat the items as property. At no point is even the illusion of ownership perpetuated.

If they're actively encouraging people to treat items as real-world property then yes, that weakens their case somewhat. On the other hand, if they don't (eg. the SOE/EQ point of view) then it's the fault of the players for believing something that isn't true.

If I played Monopoly and bought the big blue property next to "Go" then could I sell that property for that game to someone else in real life using real money? Well yes, I could, but that wouldn't really mean a lot outside the context of the game. It would still be me who was playing the game and it would still be me who obtained the game money for it when someone landed on it (unless as part of the deal I passed the game money onto the "owner"). Monopoly encourages people to think of properties as property, but just because you spent 2 hours of your time acquiring one that doesn't mean you get to sue Hasbro if things don't turn out to your satisfaction.

As for the analogies I used, hmm, well let's see. Say I was playing Bingo and I needed one number to win. I look at my neighbour and see that they have some other number in the spot where I need one, so I buy that number off them. I then call Bingo and read out the numbers I already had plus the one I bought. It's MY number! I bought it! I probably didn't even sign any kind of EULA before I played. Do I get my prize? I've invested a lot of time playing, I've created my own unique cross-board artwork pattern - I have a cast-iron case.

Richard

[Bob Kiblinger]

75.

Richard - you continue to compare apples to oranges - so we will just have to agree to disagree. I agree that a game company has every right to put whatever they want into their TOS - but I also firmly believe it is my right to challenge it if I feel it infringes on my personal rights.

[Cory Ondrejka]

76.

Jeff and Brian raise similar points about the fact that nowhere do you have a right to play a specific game. To return to Richard's sporting event analogy, if you are a ticket holder part of your side of the agreement is to act in an appropriate manner while attending the game. If you decide, after consuming 17 Bud Lights that you should rip your clothes off and go onto the field to kiss one of the players, the discussion about whether or not naked player kissing is good for you or society is separate from whether or not the stadium has the right to eject you from the stadium and to not sell you tickets in the future.

A slightly different take is whether or not such restrictive EULAs make good business sense. Star Wars Galaxies (which has, to my non-lawyer eyes, by far the most far reaching and restrictive EULA of any of the games I surveyed) has the protection of the Star Wars license as its primary motivator. That license is worth billions of dollars and is therefor far more valuable to Lucas than any one customer or even the aggregate value of all of SW:G's customers, why would Lucas grant the user any rights that could in some way hurt the value of that linsense?

[Jeff Cole]

77.

Richard: "If they're actively encouraging people to treat items as real-world property then yes, that weakens their case somewhat. On the other hand, if they don't (eg. the SOE/EQ point of view) then it's the fault of the players for believing something that isn't true."

I would contend that SOE/EQ *does* encourage real-world property rights. But I don't define "real-world" property as requiring the transaction involve real-world currency. Consider three in-game transactions:

1. A gives B a Van Gogh Earring for 100 plat.
2. A gives B a Van Gogh Earring for free.
3. A gives B a Van Gogh Earring for $10US.

To me, all three involve the involve exercising "real-world" property rights. The fact that US dollars are involved in example 3 is significant only because SOE/EQ requires a player to agree in the EULA not to do such. It is not significant in determining whether the property right is "real" or "virtual." Both plat and $US represent valuation of the purchasing player's time and effort.

Richard: "If I played Monopoly and bought the big blue property next to "Go" then could I sell that property for that game to someone else in real life using real money? Well yes, I could, but that wouldn't really mean a lot outside the context of the game."

Bingo! Buying the Van Gogh Earring wouldn't mean anything outside the context of the game. But all that really establishes is that it *has* a context in which it is valuable. And that's all that is necessary. Within the context of the games, players arguably have complete property rights (a "fee simple" in legal jargon) in their *items* (but not their avatars because the "ownership" of the avatar is necessarily rooted in the context of the real-world). It is only in the context of the real-world that a player's interest in items becomes encumbered.

Generally: sure, the normative discussion is important, and I would be very excited to participate. But Bob's situation (or any similar) really provides no interesting hook to any such normative issues.

My personal opinion (not legal) is that EULA's should not be able to proscribe activities that *but for a real-world component* otherwise would be prescribed. That;s because I think it will result in better games by requiring developers to design more robust systems.

My legal opinion (not personal) is that these are just games and provisions proscribing such behavior don't rise to the level of "unconscionable" so as to render them unenforceable. What's more, MMO*'s are not yet of such social import that we should be carving new lines in contract (or any other) law based on our experiences. While many here might argue for a "new" law, I am not one of them. Sure, we might need "new" applications, but not "new" law (at least, not yet).

Jeff Cole

[Richard Bartle]

78.

Bob Kiblinger>Richard - you continue to compare apples to oranges

No, I continue to compare apples to apples, it's just that you want to call some of those applies oranges.

>I agree that a game company has every right to put whatever they want into their TOS - but I also firmly believe it is my right to challenge it if I feel it infringes on my personal rights.

I agree with that, too. Where we differ is that you believe you have rights that I don't believe you have.

What it comes down to is this. Virtual worlds can place whatever restrictions on players that they choose, so long as they don't breach any general laws (eg. discrimination laws). Players who are OK with a VW's rules will consider playing that VW; players who aren't can go play some other VW that has rules with which they are OK.

If you think a virtual world is breaching some general rule (which, as you refer to "rights", presumably you do) then you can sue the developer. If you think a virtual world is operating within the law but you don't like its attitude, then you can either stay and moan about it or you can leave for some other virtual world.

Virtual worlds are very varied. Avatar ownership in a virtual world with permanent death for characters is different to that in a virtual world in which characters that are killed recover. Property in a virtual world that allows for characters or NPCs to steal from characters is different to that in avirtual world where even corpses are unlootable. There is much variety in virtual worlds, and attempting to apply real-world property laws to them carte blanche is as pointless as applying them to world athletics records.

If you want to argue that a particular virtual world has a particular attitude that means it violates some right of yours then you may well have a case. It depends to some extent on that virtual world's EULA, but in practice even virtual worlds with no EULA can do pretty much what they want under the playground rule of "it's my ball and I'm taking it home if you won't play properly with it".

Richard

[Dave Rickey]

79.

"Richard - you continue to compare apples to oranges - so we will just have to agree to disagree. I agree that a game company has every right to put whatever they want into their TOS - but I also firmly believe it is my right to challenge it if I feel it infringes on my personal rights."

It is your right to *leave* if you don't like how the game is being run. This right is truly inalienable, no power on earth is going to compel you to play.

That's the only "right" involved here, the Right of Departure. You may have legal *interest* in other aspects of your character and its associated data structures, but you don't have "rights", and your character itself is just a collection of data and a mental construct, one exists on our hard drives and the other exists in your head, and its nonsensical to refer to either as having "rights". So let's just drop the whole "rights" thing, it's a loaded term and we're not going to get anywhere with it.

--Dave

[DuckiLama]

80.

Bob> "my opinion is that my in-game creation does indeed have rights - proving that in court would be the whole point of challenging the TOS. Sony might own the bits of data and the software package as a whole - but they do not own my time, or more importantly my money that I invest in my in-game creation. At least, that is what my arguement would be."

First, you assume that you have created something, which is arguable, and good luck convincing a jury (of non-gamers) of that. They'll believe you paid for a service, which you then consumed, or that's what Sony will say.
Second, I think you meant to say that you have rights, not that your alleged creation does, which again is arguable, see below.
Sony doesn't claim to own your time. They are providing you a service that enables one of your three inalienable rights(there's exactly 3, see below). The money you "invest" in your consumption of that service does, indeed, now belong to Sony - that's how a subscription to a service works.

Mr. Bartle> "Where we differ is that you believe you have rights that I don't believe you have ... Virtual worlds can place whatever restrictions on players that they choose, so long as they don't breach any general laws "

Precisely. There seems to be a lot of loose usage of the word "right" and the phrase "inalienable rights". In America, it has been declared that all people have exactly 3(three) inalienable rights - Life, Liberty, and the __PURSUIT__ of Happiness.
Further, our Bill of Rights grants 10 more. Nowhere in there is the Right to Recreation at the Expense of Others included.

You are not specifically entitled to anything that results from your Pursuit of Happiness. I don't even believe that you feel you've created a Work of Art, which I believe could be covered under copyright law.

All MMOG players are simply movie extras who have no real rights of ownership in the TV Show or Movie - they might get paid, they might not. They certainly can't claim ownership of their 15-second cameo after they've signed the release form and they most definitely can't demand that the Production Company provide them with the original film so that they can sell it to someone else.

There seems to be a gross inflation and expansion of what Rights-with-a-capital-R covers, which I think is a failing of modern educational systems, this just seems a good example of that. If it turns out some court does, indeed, say that you "own" that particular configuration of bits and bytes and that Sony must surrender them to you, you might just end up with a cancelled account and a bunch of binary numbers on a disk, which isn't exactly what you're after. You want a free market - and yet you want to have that free market at the expense of the free market.

Personally, I think developers _should_ enable and encourage a sense of ownership and property and should work WITH eBay to increase subscriber satisfaction.

_Should_.

I do not think they are bound by law to allow or admit that subscribers own anything, nor should they be so bound.

That's my opinion, I'm no lawyer.

[Richard Bartle]

81.

Jeff Cole>My personal opinion (not legal) is that EULA's should not be able to proscribe activities that *but for a real-world component* otherwise would be prescribed. That;s because I think it will result in better games by requiring developers to design more robust systems.

There's a difference between "should not be able to proscribe" and "ought not to proscribe". If people want to make design mistakes, why shouldn't they? I don't see that there should be a law against it (which is what "should not be able to proscribe" implies). Besides, there are occasions where this is a valid activity, like prohibiting people from shouting "you're all mad" in a virtual world set up as a place for people suffering from mental illness to meet for group therapy.

>My legal opinion (not personal) is that these are just games and provisions proscribing such behavior don't rise to the level of "unconscionable" so as to render them unenforceable.

The more legal opinion that supports this view, the better in my (non-legal) opinion.

Richard

[Richard Bartle]

82.

DuckiLama> Mr. Bartle> "Where we differ

What's with the "Mr. Bartle"?

Richard

[DuckiLama]

83.

Mr. B.. er Richard> "What's with the "Mr. Bartle"?"

Umm, sorry. Some folks have to tell me to use their first name. Plus I'm rather new here.
You're not the only one, but usually with Mr. Castronova it's because I'm confused with the Edward sig and other folks calling him Ted.

With aliases, you don't have to make that decision. The more time I spend here, the more awkward Mr. or Mrs. anything seems, just got stuck using it out of habit I guess.

I'll just call you Richard, shall I?

[Jeff Cole]

84.

Richard: "There's a difference between 'should not be able to proscribe' and 'ought not to proscribe'. If people want to make design mistakes, why shouldn't they? I don't see that there should be a law against it (which is what 'should not be able to proscribe' implies). Besides, there are occasions where this is a valid activity, like prohibiting people from shouting 'you're all mad' in a virtual world set up as a place for people suffering from mental illness to meet for group therapy."

Well taken. And, I think we agree. By "should not be able to proscribe," I mean "should not be able to legally enforce such proscription." That is, there is no affirmative law against asserting the proscription, just that there is no law allowing developers/publishers to enforce such proscription. Again, that is my *personal* view; and I hold it because I think it would exert evolutionary pressure on developers to design more robustly. I do not mean to imply in any way that I think such a view represents a good legal policy. In fact, let me expressly state that I think it is very bad public policy to prevent developers from enforcing such proscriptions.

And, yes, developers should be absolutely free to make mistakes-- but they should have to suffer the consequences of those mistakes and not look to the law to remedy issues for which they didn't design (whether because they were lazy or they didn't foresee). Neither UO nor EQ can reaonably claim that they could not have known that in-game resources would acquire extra-game value.

As for your mental illness/group therapy hypothetical, I agree, notwithstanding I could draw a principled line between "therapy" space and "game" space. That's why I think the better policy is the "legal" approach: there is no compelling reason *not* to allow developers to enforce such commercial proscriptions.

On the other hand, the law should be very careful to require that developers properly assert their claims as contract claims, and not allow them to confuse (both the claims and the law) by asserting copyright, trademark, or other IP claims.

Jeff Cole

[Paul "Phinehas" Schwanz]

85.

My Take:

I think it is interesting to hear players talk about what they've "earned" or what they've "worked for" in a virtual world. Ted's NYLS paper talks about preserving virtual worlds as play spaces. He sees the government as a threat to their status as such, but here, it seems to me that it is the players who are threatening.

Time is money when you are working. You expect to be paid for your time. But when you are playing, time is not money. Or if is, it is only the player who is paying for the privilege of playing.

It seems to me that most EULAs are targeted toward protecting virtual worlds as play spaces. I see them driving toward these points: 1) This is a play space. 2) You are here to play. 3) You are agreeing that what you are doing here is playing. 4) Don't enter if you are interested in doing something besides playing. 5) We reserve the right to evict you if you engage in activities that are not playing.

In this context, it seems ludicrous to talk about working or earning anything. You are not working, you are playing. In the interest of preserving play spaces, I believe it is imperative to let developers craft the sort of EULAs that are required. It seems to me that developers should have every right to purpose what they've created as a play space and to ensure that their users do not infringe upon that purposing.

Whether or not it is a good idea to design a virtual world with a treadmill/work-like focus to gameplay and then to strongly purpose that world as a play space, while a different issue, remains an interesting question.

--Phin

[Edward Castronova]

86.

Phin: "He sees the government as a threat to their status as such, but here, it seems to me that it is the players who are threatening."

This is right. There's a deeper truth here. It's (at least in part) the activities of the players - earning real money from game items, for example - that invite these comparisons to real-world economies, that in turn create the threat of outside intervention. Real-world economies do allow you to earn profits, but they also impose tax burdens. You can't expect to get the one and not pay the other, at least not in the long run. The day after MySuperSales is granted full rights to buy and sell EQ items as desired, the Internal Revenue Service will arrive at MySuperSales' door with the requisite tax forms.

[Richard Bartle]

87.

DuckiLama>I'll just call you Richard, shall I?

Yes please, Mr Bartle is too formal. Besides, I'm Dr Bartle!

Richard

[Richard Bartle]

88.

Jeff Cole>Neither UO nor EQ can reaonably claim that they could not have known that in-game resources would acquire extra-game value.

Well, back when they started they could have made such a claim. Although people did used to pay for things occasionally in their textual world predecessors, it wasn't exactly a widespread practice and it's not something that even experienced developers would necessarily have encountered before; it really depended on which virtual worlds they used to play.

That said, even if they did know that people might buy and sell stuff in the real world, what difference does that make to their (the developers') position? What could they have done to stop the practice, other than not creating a virtual world in the first place? Also, why is it important that they knew or didn't know?

(Sorry to be asking, but this isn't anything I've come across in the law before).

If people playing the Supreme Court Exchange Game described in http://www.nyls.edu/docs/egger.pdf were to start paying real money to one another to trade virtual Litigation Outcome Derivatives with one another, would this affect the Supreme Court's responsibilities?

Richard

[Greg Lastowka]

89.

Dr. B> What could they have done to stop the practice, other than not creating a virtual world in the first place?

Good question -- and I don't have an answer to it.

Re who owns the light saber: I've really never been much bothered by the draconian EULA terms or the notion that designer/player conflicts about anything within the game must be resolved in favor of the designer if that's what the EULA says. (Note: People have disagreed with me about this and I do think there could be exceptions, in theory--but I think those are down the road a ways.)

But obviously designers simply *cannot* completely and effectively police in-game transfers for extra-game value without a total ban on in-game transfers. (It might be better for us all if they could, but they can't.) Because in-game for extra-game value transfers are not limited to eBay -- they can happen anywhere... Designers have a nutshell world in their control, not a real one.

So at the sufferance of the designers, I think these markets will exist in the foreseeable future because designers will be probably be unwilling or unable to shut them down entirely. I guess the question, which I asked above, is how (if?) we expect the law to deal with that fact... because I think the law will have to react to these "sales" in some way.

[DivineShadow]

90.

Cory,

"the discussion about whether or not naked player kissing is good for you or society is separate from whether or not the stadium has the right to eject you from the stadium and to not sell you tickets in the future."

I'll bite a little. The stadium has the right to eject you for naked player kissing, and terminate it's contract. But, it has the right to do so because you are performing this action within the stadium. If you get naked and kiss a player outside the stadium and then go watch the game, under what clause would the stadium revoke it's contract with you?
If the ticket stated that you can't naked-kiss a player before coming to a match, would that make it valid for them to eject you? Furthermore, would it make it ok for them to conduct a sting operation where they pose as a seedy player in need of naked-kissing?

[DivineShadow]

91.

Jeff,

Seeing all the debate I'm starting to feel like the devil's advocate here. Anyway...

You're right that the onus of proof would fall on Bob. I made that very clear to him throughout my entire November 3, 01:02 AM post on this topic.

Bob is taking the "ownership" approach. There's quite a few other approaches. Personally I'm stuck on the licensed usage of the system. It's a database. A company grants you as well as Bob license to use and modify the database according to some rules. Those rules dictate what/how data is modified (ie: Unaltered software client, established procedures). One of the established and fully-licensed procedures under which Bob can alter this database points/transfers a set of data to you. Yet the EULA states that under circumstance X ("x" being arbitrary, but in our case meaning specifically "Having an auction posted on eBay in the recent past with a description similar to the human interpretation of the data") that licensed procedure is no longer licensed and becomes a cause for breach of contract. The rub is when circumstance X happens *outside* the system licensed.
Let's invert eBay and the game companies here and see what we have: If eBay's terms did not allow for auctions of this data, and he posted such an auction, eBay would be able to cancel his use of eBay. If eBay wanted to state in their usage license that Bob *is allowed* to post data auctions but *NOT* allowed to play any MMORPG, that last activity would fall outside of what eBay can use as a condition of their license. Did I miss something? Am I crazy here?

[B. Smith]

92.

"Let's invert eBay and the game companies here and see what we have: If eBay's terms did not allow for auctions of this data, and he posted such an auction, eBay would be able to cancel his use of eBay. If eBay wanted to state in their usage license that Bob *is allowed* to post data auctions but *NOT* allowed to play any MMORPG, that last activity would fall outside of what eBay can use as a condition of their license. Did I miss something? Am I crazy here?"

No , you are not crazy. That is exactly the point. It doesn't matter whether it is ethically right or wrong to sell game items outside the game, the point is does the game company have any legal standing to regulate out-of-game behavior?

I freely acknowledge the game companies right to refuse service to anyone. That said, it si not good business practice to refuse service to someone on a whim, then provide that same service to the next guy.

Simple fact is, the game company's authority stops at the edge of the game world. The EULA is a contract, not a regulatory finding with the force of law. Just like a job, what I do on my own time is my business. Even if I were working for a competitor, the worst my main e4mployer could do is fire me. They would have nolegal standing to go to my moonlight employer and demand that they stop employing me. They might try it, but then they woudl run into fair labor practices laws.

Unless you can absolutely ensure, beyond any doubt, that every item exchange that takes place inside he game was neither arranged, paid for, discussed, negotiated, nor brokered by anyone outside the game....then you can't reasonalby object to any item exchange that takes place.

If I trade my ligth saber to fred in return for his copy if Quake III, and Bob trades his lightsaber for $50 on ebay, who are you going to ban? And why? Why on earth do you even care? That is what puzzles me. Always has, always will. The Chicken Little scenarios about the game world being destroyed by extra game trading have never seemed that impressive to me.

[Bob Kiblinger]

93.

Edward - I already pay the government taxes - been doing so for over 4 years now :). The tax threat is not a problem for me - I am already doing it (and everyone else SHOULD be as well). I understand the differentiation between "play" space and "work" space - but the first time someone spend $5 to purchase virtual items these virtual items were imparted real life value. I have some customers who have spent well over $10,000 over the years acquiring the virtual items they desire - I think they would beg to differ that the game is just a "play" space. To these people, and many other people who spend hours upon hours in MMORPGs - their virtual world is just as real as going to their workaday jobs. What makes something real after all? Do you have to be able to touch something for it to be real? I don't think so. Some people live the majority of their "real" life within the MMORPG - to them it is clearly not a game. The developers themselves don't see it as a game either - they want to "create worlds" - not "play spaces". And with any world that contains supply and demand, as Edward should know well, economies will and should develop. If it was not the intent of these economies to develop the gaming companies would have just made resources unlimited so everyone could live in a castle, everyone could become a Jedi, etc, etc. A few years ago, I donated an Ultima Online tower to the Make a Wish foundation for a young boy who had terminal cancer. His one wish was for a large home within Ultima Online. Think about that for a second. The Make a Wish Foundation does great things - but the last wish this boy had was to live in a large home within Ultima Online. If that's not real, I don't know what is.

Truth be told - the game companies would not have much of a problem with real life value of their virtual items if there were not so many legal traps that come with this. If a rare item is worth $1,000 in the real world and is obtained by a lucky adventurer, and the gaming company then has a server re-vert which causes the lucky person to lose their item - is the gaming company then responsible for the $1,000? The gaming companies are afraid to be sued if their servers are unstable, unreliable, etc - since people would lose very expensive items with every failure. I believe this is the real reason the gaming companies want to distance themselves from ebay and the ilk. Furthermore, due to the large number of kids involved with the buying/selling of virtual items - scamming and fraud run rampant - and one bug within the game can make someone's hard-earned (or bought) items worthless. The companies would theoretically be liable for losses like this as well.

I think one of the best parallels to the real-life value of virtual items is the baseball card market. Baseball cards are, after all, are just 1/10 cent pieces of cardboard. But a person’s desire to own one of these pieces of cardboard can lead them to pay $100,000+ for it. Intrinsically, a piece of cardboard is not worth this kind of money, but when human desire intermingles with supply and demand – markets will develop and these imaginary/worthless items assume real value. What would happen if the Topps card company came out and said “these cards are our intellectual property – you are allowed to buy them from us – but only on the condition they can never be re-sold”. What would happen? One of two things – people would buy and sell the cards “illegally” breaking the rules of the card company – or people would lose interest totally since after all, who wants to buy a worthless piece of cardboard?

[Jeff Cole]

94.

Ted: I don't recall details from my tax law class, but I don't think income to be taxable must necessarily be "legal," result from "legal" activities, or otherwise derive from some "legally" recognized transaction. It just has to be "income," and neither exempt nor excluded. So I don't think any "legal" recognition of player property rights is going to trigger federal income tax liability where it did not exist previously.

Greg: I don't see (at least not yet) any compelling issues that require any new law. As to "how" the law should deal with many of these issues, I think that good policy would require that we not assume that merely because we are dealing with intangible, cyber-spaces that IP law *necessarily* applies. In fact, I would argue that it should not in the vast majority of cases.

The hook to IP is not intangibility, but rivalry. Notwithstanding the intangible nature of the virtual item, the rivalrous nature of the item screams for the application of vanilla personalty law.

I understand why developers would glom onto IP: diversity, a single body of law, contributory/inducement infringement, etc. But all it does is confuse IP for those situations when IP is appropriate.

I think that we can apply brick and mortar law just fine.

And I am not some save-the-commons-and-only-then-save-the-whales kind of guy: I believe in *strong* intellectual property rights.

Divine: "The rub is when circumstance X happens *outside* the system licensed."

There isn't a rub, really. A player agrees that in exchange for the license to use the system, the player will (1) pay the licensing fee, and (2) not exchange items in the system for real-world money.

Generally speaking, the law let's people agree among each other to just about anything they want (obviously subject to some restrictions). That's very general.

Also, the law doesn't enforce contracts because it believes that people should live up to their promises-- e.g. that it is "wrong" to break a promise. Rather, it enforces contracts to facilitate (and reduce the costs of) transacting. The law doesn't take a moral stance on breach, it is purely rational. The law even encourages what's called "efficient breach"-- a breach that results in a more efficient allocation of resources.

An example:

I agree to sell to you and you agree to buy from me my car for $1,000. An hour later, Richard calls me up and offers me $1,500 for my car, I accept, and sell to him my car.

I have breached my contract with you. Your only claim against is for those damages that you suffer (courts only rarely provide "specific performance" relief-- that is, make the parties perform). You can recover from me only those damages that I could have foreseen that you would suffer because of my breach. Not only that, even though *I* breached, *you* have the *duty* to minimize your damages.

1. Suppose you can buy a perfectly good substitute car from Dan Hunter for $1,000, you have suffered no damages and do not have a claim against me.

2. But suppose Dan Hunter wouldn't accept a penny below $1,200 (instead of $1,000). Then, you have a claim against me for $200. Except for the fact that I breached, you would have had my car for $1,000; because I breached, you had to pay $200 more than we agreed to get the same car, so I owe you $200. So, the law encourages me to breach my agreement with you to sell my car to Richard (because he values it more highly than you, apparently) and, then, compensate you for your damages (here, $200).

3. Now, let's say Dan Hunter offers to sell it to you for $1,000 and you procrastinate, and don't call him back for some period of time (weeks? days? it will be my burden to prove that you fail to mitigate your damages). When you finally do, he won't accept a penny less than $1,200. Well, if I can prove that you didn't mitigate your damages (by buying it from Dan Hunter when he was only asking for $1,000), you cannot recover the $200 from me.

Contract law is all about minimizing the costs associated with transacting.

That general goal is also why it is really irrelevant whether Bob *actually agreed* by clicking the EULA. The law asks, "Was Sony reasonable is relying on Bob's clicking as expressing his agreement to the terms?" That's why you have to click it everytime you launch the game. That's why Mythic makes you actually scroll all the way through to agreements in order to even activate the "Accept" button.

Jeff Cole

[Greg Lastowka]

95.

Jeff -- I agree that you have to do a lot of work to find an IP issue in the sale of the average lightsaber. But "vanilla personalty law" is hardly vanilla here -- there is no spoon, y' know...

And you must have gone to a law & econ school like me, what with this focus on efficient contracting. :-)

[Edward Castronova]

96.

Bob K.: "Edward - I already pay the government taxes - been doing so for over 4 years now :)."

That's eyebrow-stretching news to me. I've tended to think of the incomes earned on eBay from digital game items as tax free. I stand corrected.

Jeff C.: "I don't think income to be taxable must necessarily be "legal," result from "legal" activities, or otherwise derive from some "legally" recognized transaction."

True. I believe that current tax law imposes obligations on every gold piece earned in any virtual world. It's not enforced, of course. But Julian D. carefully went through the tax code once in a post on Play Money, and it seemed to me that the liability already exists. I wonder if Bob K. pays taxes on that liability? Or just the dollar earnings at eBay?

Ted

[Bob Kiblinger]

97.

Edward - right now I just pay tax on my profits - i.e. my income. My accountant and I tried to figure out a way to pay taxes on inventory - but after discussing it with the IRS they decided it was not necessary at this time.

[Paul "Phinehas" Schwanz]

98.

Bob K> "I have some customers who have spent well over $10,000 over the years acquiring the virtual items they desire - I think they would beg to differ that the game is just a "play" space."

But the question is whether or not the developers can choose to purpose what they've created as a play space and then take steps to try to ensure that it stays that way. This is where so many of the analogies fall apart. Trading baseball cards does not endager the purpose for which the cards were created, therefore, Topps has no reason to care about whether or not baseball cards are traded.

On the other hand, the sale of in-game items in real markets can harm the created purpose of the game, as defined by those who created it, to be a play space. With the sale of in-game items comes greater incentive to cheat or exploit, money-laundering concerns, cheap labor hired in Mexico, and other 9 to 5 sorts of things. How can developers protect the play space they've created? Shouldn't they have a right to do so?

Developers draft EULAs with rules targeted toward protecting the worlds they've created as play spaces. Greg calls these rules "draconian." Ted writes about how not allowing players to give gifts to each other might help protect these virtual play spaces. Raph calls this approach "fascist."

I tend to agree with both Greg and Raph. But I also agree with Ted and the EULA drafters that *something* needs to be done, else our play spaces will turn into job spaces, as seems to already be the case for some, or worse, into government regulated job spaces. So, before writing off EULAs as draconian, or Ted as an MMORPG-nazi, I need to step back and ask myself what sort of alternatives I have to offer in order to protect and preserve play spaces.

For me, it comes back to the players. If players would act responsibly, there would be no need for draconian rules or fascist regimes. On the other hand, when players are quick to dismiss what a virtual world's creator has purposed for its existence, or when gamers ignore the contract they've agreed to abide by, are they not either prescribing more draconian methods or leading us toward play spaces that are no longer about playing?

--Phin

[Bob Kiblinger]

99.

Phin - regardless of what endeavor you look into - there are going to be "bad" people who exploit any situation for a buck. You can look at churches, charities, world hunger organizations - the list goes on forever. I agree with you that unattended macroing, exploiting and gold farming have no place in the game - and I also agree that these activitites go against the spirit of the game.

I have to disagree that the creators of MMORPGs see their creations as "play spaces" - they set out to create functional worlds - something beyond ordinary games. I would suggest that if a person is really just looking for playtime, or for some entertainment - there are plenty of single-player games out there that do qulify as "play space". It was the intention of the game designers to make a perpetual world with an environment and economy that are player created. I would have to agree with an earlier poster - the game companies have every right to police me in-game - but what I do outside of the game is my own business - and they have no rights at all outside of the game world.

[Cory Ondrejka]

100.

Wow, step actually tried to get work done this afternoon and missed a lot!

DivineShadow, good point, although per Jeff's post, if my tickets include a clause about not wearing opposing team colors then I have the choice to either not go to games, abide by the agreement, or break the agreement and hope that I don't get caught.

From Bob (and others): "but what I do outside of the game is my own business - and they have no rights at all outside of the game world."

Is it fair to say that this statement is the same as the feeling that your content, character, and utterances should be your own? Or, at the very least, that you shouldn't have to give so many rights to the product's creator?

They feel similar to me, since the behaviors that the EULAs most restrict (other than reverse engineering the code base which is an entirely different discussion) are those around commerse and trade outside of the game world.