Home > Intellectual 'property' > Real and virtual weapons

Real and virtual weapons

April 1st, 2005

I’ve been interested for a while in the extra-game markets for items like weapons, spells and so on created in online games. This story involves two Chinese gameplayers who acquired a highly valuable virtual sword. One of them borrowed it and sold it for about $1000. The other player went to the police without result, and eventually confronted his partner, and in the ensuing argument, pulled a knife and stabbed him to death. It’s sad that this happened, but the most interesting aspect for those not directly involved is the question of whether the seller had committed a crime, and if so what. The following discussion is based on very limited knowledge, so feel free to correct me.

Even if this was a real sword, I doubt that the police would have become involved in the dispute because it was jointly owned, so only a civil action would have been available.

More generally, if the law does become involved in this kind of dispute, it’s unlikely that ordinary property law is the right place to look. Even if your virtual castle may look like genuine, it isn’t real estate. It’s the product of a contract between you and the game’s operators. In many cases, that contract forbids outside resale of items, so your rights are pretty limited. But even in a game like Entropia which encourages such things, your rights over virtual items are defined within a set of rules created by the game operators. If, for example, they arbitrarily confiscated virtual land for which you had paid, your remedy, if any, would be under contract law or (in particularly outrageous cases) the game operators might be prosecuted for fraud.

Of course, all this could change. There’s nothing to stop governments creating new categories of virtual/intellectual property. But, as with intellectual ‘property’ in general, intuitions based on standard (rival, excludable) private goods aren’t likely to provide a good basis for thinking about such things.

There’s more discussion at TerraNova where this kind of issue has been debated before.

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  1. Todd
    April 3rd, 2005 at 22:09 | #1

    ‘As a gamer (and a student of economics) the transitions between the ‘real’ world and the ‘virtual’ world are a very intersting topic for me. How can something that is effectively a collection of bytes on a server somewhere, have value in the real world? And what happens when the virtual world crosses over into the real world. I can see more disputes over virtual property happening more frequently in the future, especially when games start developing more sophisticated economies within them.

    For example, there was a study done on the game Everquest several years ago, one of the finding from the study was:

    “The Gross National Product of EverQuest, measured by how much wealth all the players together created in a single year inside the game. It turned out to be $2,266 U.S. per capita. By World Bank rankings, that made EverQuest richer than India, Bulgaria, or China, and nearly as wealthy as Russia.

    It was the seventy-seventh richest country in the world. And it didn’t even exist.”

    Source

    The paper can be found here

    Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier

    As a gamer (and a student of economics) the transitions between the ‘real’ world and the ‘virtual’ world are a very intersting topic for me. How can something that is effectively a collection of bytes on a server somewhere, have value in the real world? And what happens when the virtual world crosses over into the real world. I can see more disputes over virtual property happening more frequently in the future, especially when games start developing more sophisticated economies within them.

    For example, there was a study done on the game Everquest several years ago, one of the finding from the study was:

    “The Gross National Product of EverQuest, measured by how much wealth all the players together created in a single year inside the game. It turned out to be $2,266 U.S. per capita. By World Bank rankings, that made EverQuest richer than India, Bulgaria, or China, and nearly as wealthy as Russia.

    It was the seventy-seventh richest country in the world. And it didn’t even exist.”

    Source

    The paper can be found here

    Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier

  2. Andrew Reynolds
    April 1st, 2005 at 11:11 | #2

    PrQ,
    Provided that the rules of the game allow for the transferability of these assets, virtual or not, I would have thought that this sort of property would be protected under Australian law in the same way that any other contractual rights (all of which are equally virtual) are. The asset is the right to wield this sword in a given context – in this case a game. The police might feel a bit silly enforcing this property right, but, to me at least, they should be capable of doing so.
    The other possible remedy would be for Qiu Chengwei to sue whoever Zhu Caoyuan sold the sword to for its return (as Zhu cannot pass on more rights than he had) and then the purchaser could sue Zhu for the return of (I presume the purchaser was male) his money.

  3. John Quiggin
    April 1st, 2005 at 11:53 | #3

    My point was that the police don’t generally enforce contractual rights. As you say, the injured party would have to take civil action. By contrast, if a real item of property is stolen, the police can act directly to recover it for you and prosecute the offender.

  4. Andrew Reynolds
    April 1st, 2005 at 12:40 | #4

    PrQ,
    The police can and do enforce contractual rights where there has been fraud or theft involved. This case this looks like fraudulent conversion. Contractual rights are still property.
    The only real difference here is that the underlying property (the sword) was created by a computer program and is not something you can drop on your foot.
    Not applicable in China, of course, but I think the position in Australia is clear. WA Criminal Code s409(1)(a),(c) (d) and (f) are probably applicable here.

    From the WA Criminal Code:
    409 . Fraud
    (1) Any person who, with intent to defraud, by deceit or any fraudulent means —
    (a) obtains property from any person;
    (b) induces any person to deliver property to another person;
    (c) gains a benefit, pecuniary or otherwise, for any person;
    (d) causes a detriment, pecuniary or otherwise, to any person;
    (e) induces any person to do any act that the person is lawfully entitled to abstain from doing; or
    (f) induces any person to abstain from doing any act that the person is lawfully entitled to do,
    is guilty of a crime …

  5. John Quiggin
    April 1st, 2005 at 14:20 | #5

    I disagree. The sword isn’t a piece of property, it’s a database entry with no external referent. The database entry gives the player the right, under the contractually defined rules of the game, to do things with his game avatar, such as wielding the sword in combat. The fraud, if any, isn’t conversion, but something much more complicated.

  6. Atticus
    April 1st, 2005 at 14:33 | #6

    The WA Criminal Code provides that “‘property’ includes real and personal property and everything, animate or inanimate, capable of being the subject of ownership”. “Choses in action” (basically intangible rights that can only be exercised by legal action, e.g. shares, options, debts, etc) are personal property. A contractual right to have a certain privilege in an online game is probably a chose in action.

  7. Andrew Reynolds
    April 1st, 2005 at 14:54 | #7

    PrQ,
    With respect, I disagree. The fact these can be (and are) bought or sold indicates that they can be regarded as property. If, according to the rules of the game, they cannot be bought or sold then they are not property that can be transferred, so I agree with Atticus. At the very least (in WA) s409(1)(d) would have been triggered – a detriment, in this case the inability to wield the sword in the game – has been caused. I don’t think the government needs to create a new category of property for this.
    As an aside, I would love to be in court when a case like this comes up. The judge, preferably elderly, would be fascinating to watch while grappling with the concept of a MMPORG.

  8. Atticus
    April 1st, 2005 at 15:20 | #8

    I just ran my response by my boss, a very senior lawyer in his mid sixties (but a relatively cyber savy one – he uses emails, surfs the web, etc). We got sidtracked for about twenty minutes while I explained online RPGs to him. He was completely fascinated. He wanted me to show him and I had to confess I’d never played MMPORPGs.

  9. Atticus
    April 1st, 2005 at 17:01 | #9

    Here an analogy: Imagine that season tickets to a sporting event or opera worked this way: You bought the right to sit in a particular seat each perfomance for the season from the company. The company takes your name and ID details. The terms of the contract allow you to transfer the right to sit in your seat to any other person by telling the company to transfer the right to your name and address. You can only transfer the right to the whole series, not to individual performances. The right to attend performances, or transfer the right, vest in whoever is currently registered witht eh company as the woner of the right.

    Person A buys a ticket and uses the seat for several performances. One night he can’t make it but his friend, B, can. A transfer’s his right to B on the understanding that B will transfer it back after the performance. Instead, B sells the right to C.

    The right is a chose in action, a species of personal property. Under the common law definition of theft (“dishonestly appropriating property belonging to another”), IMO, B is a thief.

    A more reaslistic, but less obvioulsy analogous situation would be shares (cleary a chose in action) in a company which did not allow proxies at its general meetings. A has the shares but can’t attend the meeting, B wants to vote a certain way. A transfers his shares (basically just an entry in the company’s share register) to B on the understanding B will transfer them back after the meeting. Instead B sells the shares. IMO, B is guilty of theft.

    Interestingly, in both cases, A could sue C for return of the chose. You can’t give what you don’t have – “nemo dat quod non habit”.

    I’m a bit rusty here, but IIRC, at common law a thief does have good title to his swag, against everybody *except* the true owner. Thus if X belongs to O, is stolen by T1 and in turn stolen by T2, T1 could sue T2 to get X back. O, of course could sue whichever of them has X to get it back.

  10. ab
    April 1st, 2005 at 17:31 | #10

    This is possibly wildly incorrect, but what about a cheque analogy? The chose in action that the bad guy has is different from the chose in action that the good guy lost: the contractual right to use the in-game asset is personal property owned by Player A, but once the online transaction has taken place, the rights able to be exercised by Player B are choses in action existing under a seperate agreement. See, for example, the decision of the HoL in Preddy.

  11. ab
    April 1st, 2005 at 17:34 | #11

    I would have though that if the actions of a player are each separate choses in action (which is dubious), then at the very least that chose in action that the bad guy receives is different from the chose in action that the good guy has lost: the contractual right to use the in-game asset is personal property owned by Player A, but once the online transaction has taken place, the rights able to be exercised by Player B are choses in action existing under a seperate agreement. See, for example, the decision of the HoL in Preddy.

  12. ab
    April 1st, 2005 at 17:35 | #12

    Hmmm, my computer does not work properly.

  13. Andrew Reynolds
    April 1st, 2005 at 17:37 | #13

    Finch,
    Correct – the other option of course is to use the criminal law and get the police involved.
    On the season ticket analogy I am not sure whether B is a thief, as B legitimately has possession of the rights, he just should transfer them to A. I think it would be fraud, rather than theft.

  14. April 1st, 2005 at 19:42 | #14

    Im going to concur with Atticus on this one, at least on paper. In practice the police, Id say, would still be very unlikely to propperly pursue such a case.

  15. ab
    April 1st, 2005 at 19:59 | #15

    Also, Atticus: I would have thought that C is perfectly able to gain good title to the shares in your example, so long as he/she is a bona fide purchaser for value without notice. A and B’s understanding as to a later transfer, while possibly creating equitable rights in A, would not affect the ability of legal title to pass from B to C (the plain fact is that B is, in your example, vested with legal title to the shares). Am I missing something? It is a long time since I studied contract/property.

  16. Razor
    April 1st, 2005 at 22:49 | #16

    These people obviously have too much spare time.

  17. Atticus
    April 2nd, 2005 at 10:01 | #17

    AB, I think you’re confusing the siuation with “title by registration” with respect to land under the Torrens Title system, and the system of “registration of title” with respect to chattles I’m describing here. But you have raised doubts in my mind. Are you really going to make me consult my copy of “Mad, Grumpy and Insane”? [Takes cover after having mocked the Gods of Australian Equity]

  18. Andrew Reynolds
    April 3rd, 2005 at 23:14 | #18

    Of course, if I am right, you could serve the Chief of Police with a writ of Mandamus to compel them to pursue the investigation…
    AB – in this case there is certainly no property real (i.e. land – and not virtual land, either) involved, so as only chattels are in dispute (virtual ones at that) the purchaser normally can only gain as good a title as sold.
    On the other hand, if bought on eBay, there may be an argument that they were sold through a market overt, which is one of the exemptions from the general rule of “nemo dat quod non habit�. Finch – do you have any comment on that? Could eBay be a modern market overt?
    Yes, we probably do have too much spare time.

  19. April 4th, 2005 at 11:00 | #19

    AR, that’s twice now you’ve made what I first thought was a typo.

    The legal maxim is “nemo dat quod non habet“.

  20. Andrew Reynolds
    April 4th, 2005 at 11:03 | #20

    PML – I couldn’t bother typing. Cut and paste normally prevents typing errors – this time it propagated one.

  21. September 5th, 2005 at 23:25 | #21

    I’m with P.M.Lawrence I think he is right.

    ——————————————————
    Bulgaria property

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