Raph Koster's Home Page

I am not a lawyer. I am not a lawyer. I am not a lawyer. These options are my own and not those of anyone else on the planet, be they human or corporate or governmental. Read the following as simply a commentary on where things stand now.

Online Worlds and the Law

I'm not John, but since I'm loony, I'll answer anyway. :)

The standing of individuals in games isn't addressed coherently in any legal codes that I have heard of. The standing of a website isn't even settled legally yet (recently, a judge in Florida ruled that a porn website could not violate community standards of the community from which it was hosted, because it was a "place" of its own), much less that of virtual environments.

Online environments are currently governed by a horrible mishmash of laws wherein some precedents (like the one I just cited) consider them places, others consider them telephone conversations (cf current legislation governing the use of wiretaps and surveillance on the Internet), others consider them venues of publication (cf Harlan Ellison's lawsuit against ISPs and AOL), and others consider them broadcast media or common carriers or "just games."

To cast it in another light--characters in an online roleplaying game are a record of activities undertaken by a user on a remote server. This is no different really from the records that make up your credit report, nor the records that make up your preferences at Amazon.com, nor the records which make up your bank transactions, nor the records which make up your typical /logs directory on any webserver. Some of these have legislation covering them, and some don't--but the laws are all different, and in some cases it's considered private info and in some cases it's not and in many cases, it is but it gets sold to the highest bidder anyway.

Why would you sign such a document [as a consumer's rights doc]? Because signing such documents gets you more users and an aura of reputability. That would be why other companies in other fields have ended up signing such documents, sometimes under governmental pressure and sometimes not. As you say, this can be considered a marketing ploy.

From my (loony) point of view, it doesn't matter why the administrator of a space signs such a document. As soon as the very notion is in the air, users will consider them to be inalienable rights. And fighting the battle for nomenclatture with your users is, as Jeff Freeman observed, a futile act. :)

If a court case was decided which determined that players owned the virtual items generated in the process of playing an online world, I suspect that many of the large corporations--particularly those which make a living form intellectual property--would immediately exit the market, worried about liability issues and loss of their IP.

Er, let me make my personal position clear (I thought it was from previous posts on the list, but just to be sure...). In addition, this is most definitely my thoughts on the matter, not that of any company.

I stated that should this occur, many large corporations would exit the market seeing it as too risky. Not that the genre would die, not that others wouldn't step up to the plate, not that pigs would fly. Yes, what I said echoes the arguments of the music and movie industries--the large corporations are in at least one case exactly that industry (and when they aren't one and the same, they certainly have similar mentalities), and will flip out and freak out in exactly the same ways as the music industry is now doing.

My personal take on what is going on is that the concept of intellectual property has been gutshot, and just doesn't know it's going to die just yet. It's going to take many long and painful years before the final demise, and it may yet be saved by ridiculous extraordinary measures, but the prognosis is currently grim.

The law is a complete mess.

In Florida, a judge rules that a porno website does not violate local community standards because "cyberspace is a place." Yay, cyberspace has free expression, freedom of assembly, etc! Oh, wait. Maybe it isn't.
Elsewhere, Harlan Ellison sues AOL and a bunch of ISP's because a user cut and pasted an entire story of his into a forum, and he regards the ISPs the story traveled through on the way as publishers. One of the ISP's settles. Oops, wait, it's a publication venue. Now we're under different laws.
The various acts of Congress that are periodically struggled against by the open source/EFF/ALCU/etc crowd are still bearing the legacy of the early legislation stating that the Internet is a communications medium that falls under the purview of the FCC. Last I heard, your modem, router, firewall, computer, etc was a telephone under the law, which made it subject to wiretap law, different levels of expectation of privacy, different levels of rights. Consider that most of our users currently have expectations of privacy (though we do not guarantee them) and in many states it is illegal to tape (but maybe not log?) speech when said expectation exists unless consent is given by speakers, under wiretapping law. (Wiretapping law applies even to something as straightforward as taping a classroom lecture, btw).
In the rest of the world, privacy law has rapidly grown so tight that you cannot even keep extensive records on your users' activity without explicit permission. Funny, that's what an RPG is. There's damn little difference between your activity in an online world as your credit report, and the differences will continue to grow less important as online spaces are used for wider purposes. Example where the line is already extremely blurry--muds and websites being used as educational institutions--accredited ones, no less, with the concomitant privacy laws.
Content companies are flopping like fish out of water trying to figure out how to monetize their IP in days when copies indistinguishable from the original can be made (anyone ready to subscribe to your CD collection?). Congress is sending nasty letters to the companies over the notion of making CDs uncopyable. Heck, Sony Electronics is telling Sony Music they can't call uncopyable CDs "compact discs" because they don't fit the standard.

The IP argument is a red herring. No IP interest is being assailed in such a case; no IP right degraded.

In the eyes of the content IP holders, the act of someone writing a Kirk/Spock pr0n piece degrades the IP. You do know that when a parent comes across one of these in their kids' bedroom, Paramount gets the call, right? You've also heard the stories about Disney telling mom-and-pop daycare centers to take down their Mickey Mouse paintings on the walls.

In a legal sense, the word "property" defines a system of relationships among people with respect to "things," that is a "bundle of rights" with respect to "things" that denote a person's expectations for disposal of such "things." Such "things" may be real or personal, tangible or intangible. Perhaps the most important property "right" is the right to exclude others.

Let's be candid: in a legal sense, the word "property" as it pertains to content, is whatever the largest lobby gets lawmakers to say it is. That's how we got software patents, that's how copyright terms have been extended past all reason...

Within the context of these games, players are given, basically, full property rights to the items they loot, trade or otherwise acquire. These player property rights are independent of a company's IP interest.

"Within the context of these games" has no legal meaning whatsoever. Whether it ought to is a whole other debate, but currently, there is no legal sense of "within the context of these games."

Rightly or wrongly, the position taken by companies who are saying to eBay, "take these items down" is very similar to the position taken by a movie company when it asks eBay to take down bootleg VCDs of its movies. It's an unauthorized sale of the company's material. We can argue all we want about whether the fact that the bits and bytes are moving within one database, between databases, or being transferred on a solid medium makes a difference; but the companies who own the content currently do not make such a distinction (cf software piracy).

Again, consider two transactions:
Transaction #1: Player A gives Player B item X in exchange for item(s) Y (where item(s) Y are either game currency; some assortment of other game items; or, nothing).
Transaction #2: Player A gives Player B item X in exchange for item(s) Y (where item(s) Y are either game currency; some assortment of other game items; or, nothing) and some real-world, extra-game transaction for money, barter or service.
I do not see how transaction #2 would necessarilly degrade a company's IP interest any more than transaction #1.

As it happens, that is exactly how ASCAP, BMI, SESAC, and the rest of the performance rights organizations collect license money on public performances of works owned by members. You can play it for free. But if you choose to charge for it, you suddenly owe money to the organization (ASCAP is literally a union; they track performances and collect money and distribute it to the membership as equitably as they can. Disclaimer: I'm a member).

Transaction #1: performer A gives audience member B a performance of someone else's IP in exchange for say, a song swap or maybe nothing.
Transaction #2: oops, they charged money.

The questions are more like, "is the virtual sword analogous to performance of a song?" "Does the venue in which the "give" happens matter?" (It does in the case of musical performance, btw). And we can't even define what the venue is under the law--there's significant differences between singing over the telephone, over TV, and recording the song.

There isn't even a common-sense definition of what is a private and what is a public space in cyberspace.

It is a huge leap to infer that transaction #2 somehow, all of a sudden, extends a player's property rights beyond the scope of the game. In effect collapses a company's entire IP interest. To the extent that it increases a company's liability, such concerns are more easily addressed in the EULA than through the enforcement of property rights.

Um, as of right now, nobody knows if all the pieces of software EULAs can hold up in court. That's a whole other ball of wax that's been interesting to follow. Most recently, a judge ruled that you can unbundle software and resell it if you haven't installed it, on the grounds that if the transaction has the form of a sale, it is a sale.

So, after that lengthy preamble, what do I think?

The fact is that online worlds, by virtue of persistence, broadcast, multiuser capabilities, digital reproduction, extensive user tracking, and a host of other factors, do not fit into any of the current pigeonholes in the law. Rather, they can be used as publication venues, broadcast media, person-to-person communications, places of assembly, records of activity, and probably more things that I am not thinking of off the top of my head.

I believe that it is inevitable that data like game objects acquire value. In fact, arguably, server-held data is the only data that will retain value soon. The fight over who owns it has yet to really begin, but it won't be pretty. When people talk about Project Entropia, what I think of is "money laundering," fer crissake.

From a game design perspective, this article seems like a harbinger of the future. The idea that nerfing a character class might make MSNBC is alternately thrilling and terrifying. The moment that someone's standing in an online setting has significant value is more so. Let's take the examples in Korea of professional gamers. Do you think that if NCSoft, say, accidentally lost the character record for the top ranked guy in the game and as a result he lost significant revenue from endorsements, that he might not sue?

I think that the range of activities in online worlds is only going to increase, not decrease. And therefore we will run into more of these problems as time goes on. I think the real "reality check" is that we're in for interesting times. Simply put, the law is already showing major cracks and at some point will burst asunder.

I am still not a lawyer! However, since this was written, Mythic was sued by a group that "sold" in-game items to players via out-of-game auctions for real money. It got as far as going to a judge, and the judge upheld the arbitration clause in Mythic's EULA. So at the very least, that much is settled.