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Is Online Property Real? Lawyer Says Sort-Of
Bob the Super Hamste writes "The St. Paul Pioneer Press is reporting on an analysis by lawyer Justin Kwong in the William Mitchell Law Review about virtual property and ownership. Justin Kwong asserts that virtual items are not real items (PDF) and that you do not own them but only have a license. The analysis stems from a 2008 case of a Blaine, MN man who filed a police report for the online theft of approximately $3800 of virtual goods. Justin Kwong compares virtual items to a mug club at a bar where patrons purchase rights to a specific numbered mug but cannot remove the mug from the premises. He does note that if in game items are purchased there needs to be clear language stating: 'the transaction is a license, not a sale, and that traditional consumer protections afforded by sales of goods do not necessarily apply.'"
Justin Kwong also made a weblog entry responding to misconceptions expressed in comments on the St. Paul Pioneer Press article.
As long as someone finds value in the item and is will to either pay for it or labor for it then it has an intrinsic value so it is a real entity. Be it one you can not yet physically hold.
You mean I can't take my mount out of WoW? How will I get around the real world without it?
And the winner is - the lawyers
So does getting killed and looted now count as online robbery?
All the money I have in the bank and my 401K ... is ... well, ... "virtual".
Research shows that 67% of those who use the term "research shows", are just making shit up.
If you lose a virtual item to "virtual theft" you appeal to the people running that game, not the police. There are no virtual police, and likewise, the virtual police can not come into the real world and arrest people for trolling.
Absolute power corrupts absolutely. indymedia
I'd make a snide remark about the stock market, but my bitterness will fade in time.
Here's what I consider virtual property: stuff that has a mirror in real life. Everything else is just bits and bytes, what I would instead term "ownership privileges" as anyone that's admin'd a network would understand. Level one becomes one million, one item model turns into another, you're granted ownership of foo_bar, and so on and so forth. Just look at Second Life if you don't believe me.
If you spend money on a virtual item you are getting nothing tangible in return and you must accept this.
Leaving aside the complicated and thorny issue of copyright and artificial scarcity in the face of the reality that almost all virtual property is infinitely available (and thus should never cost you money), I'd turn my attention to the biggest issue in online property: creative works. Games, art, videos, writing -- all of these are virtual property online. You "own" your work, but yet this isn't necessarily true on the Internet, because there are no property laws and no national borders to enforce them. Instead you own access to your virtual property. This is why everyone starts talking about licenses when they discuss virtual property.
Now when it comes to those licenses, hoo-boy. Who "owns" the license? What happens when the owner of the actual virtual property you're licensing decides to revoke your license, resulting in what amounts to a theft of your money? (See: Music DRM revocation, video game account bans, content site account bans) There isn't a court in the land that actually understands how that process works, and there isn't a consumer that truly understand the enormity (and legality) of those signature-less EULAs every single commercial website and virtual product requires you to agree to. I foresee a much bigger challenge to EULAs down the line, which will decide whether they're legal once and for all.
It strikes me that "property" in the legal sense is as much a fiction as "intellectual property" - over time, and in different cultures, we have established complex legal concepts of "ownership", whereby the legal right of "ownership" amounts to a web of in personam rights, particularly the right to exclude.
I may hold a copy of a book in my hand, but, absent a legal construct of property, I have no clear right that means that you cannot take it away from me. Equally, there is no obligation on me to give it to you. If you want it, you will have to take it from me - absent you taking it, I have possession. If you take it, I can try to take it back from you, just as if we were dogs fighting over a bit of meat.
In different ways in different societies, we have evolved the notion of "ownership"; we impose a legal construct of "property" and of "ownership" on top of this physical existence, meaning that you require my permission to take the "property" in question away from me, or else face the legal consequences.
Perhaps intellectual property takes the notion too far, but, fundamentally, I am not sure I see a difference between the "imaginary" (legal construct only) right of ownership of something which does exist, and of something which does not - both are artificial legal constructs.
What are you talking about? Freehold land IS owned by you.
In communist countries, the land is owned by the government, but often they create legal devices to emulate freehold.
And how about the federal reserve ?
As soon as there is a direct conversion from virtual asset to money, instead of just the converting dollars to virtual (buying items).
Then the owner of the game becomes a bank with all the rules concerning a bank. Also all of the actions players do ingame that generate assets that can be converted to money become taxable. They're not playing a game anymore but working.
That's the reason for "sort of". When the answer is cut and dried there's no need for lawyers.
This article strikes me as a little late in coming and clearly muddles even deeper just what goes on here on the internet. Almost 2012, we are reading about a lawyer who is just now attempting to define what virtual ownership actually is as it compares to real property? This is a little funny in that he tries to make a point and doesn't clearly make any point. Just what is the point here? Maybe I missed it. Is he attempting to create a plethora of new litigation which will need new court rulings here to perpetuate more litigation and more rulings?
This is my question posted on Slashdot. Does that mean I don't own the question or that I own it, sort of? I have posted it anonymously, sort of, and don't want to own this comment, but someone may tell me to own up to it. As it has definitely taken up virtual space on the internet, letter by letter, word by word, just what does that mean? Commercial virtual real estate has a new thought posted on it. Who owns it? This article begged this comment, so signing it was not as important as making it in my cowardly anonymous, sort of, estimation.
The difference between real property (objects) and intellectual "property" (information) is that physical objects cannot be used by arbitrary people at the same time. Therefore it is of vital importance to have rules telling who has the right to use which object at which time. The concept of property is one, very successful, way to do this. However, intellectual "property" does not share this characteristic. There's nothing stopping some person in China to listen to the very same song you currently listen to at the very same time. Nor is there something stopping some African to use the very same idea to make things as you do. That is, unlike physical objects, information has no intrinsic restrictions on use which need to be regulated.
In your example, if someone takes the book you are currently reading in, you cannot continue reading this specific book. On the other hand he cannot read that very book unless he has it. Thus your interests of reading that specific book conflict, and therefore there have to be rules which tell who has the right to have that book. However, no such restrictions hold for the text in the book. If you can read the text in your book, he can still read another copy of the same text in another copy of the book.
The property concept is made for things with naturally exclusive use, which is why you need exclusive rights for their use. The intellectual property concept tries to use basically the same rules for something which doesn't have the natural property of exclusive use.
And no, the concepts are not the same just because both are legal constructs. Otherwise you could say that capital punishment and community service are the same because they are both punishments.
The Tao of math: The numbers you can count are not the real numbers.
"Property is theft."
So since there ISN'T that language, the items really are sold?
The difference between real property (objects) and intellectual "property" (information) is that physical objects cannot be used by arbitrary people at the same time.
I'm leasing space on a web server. This server is used by over 1,000 people at once, and at any one time, it's serving pages from several different customer's sites to several viewers. So is a server not property?
The property concept ... The intellectual property concept ... the concepts are not the same just because both are legal constructs
The rationale for property is, as you say, different to the rationale for the extension of property rights to different intellectual things - such as copyright - but there is no meaningful difference in the law of personalty between the ownership of a book, and the ownership of copyright, since both are property rights at law. They are the one and same thing. (The non-meaningful difference would be tangible v. intangible personalty.)
(If I had mod points, I'd mod your post up, FAOD - it's insightful, in my book.)
The difference between real property (objects) and intellectual "property" (information) is that physical objects cannot be used by arbitrary people at the same time. Therefore it is of vital importance to have rules telling who has the right to use which object at which time. The concept of property is one, very successful, way to do this. However, intellectual "property" does not share this characteristic. There's nothing stopping some person in China to listen to the very same song you currently listen to at the very same time. Nor is there something stopping some African to use the very same idea to make things as you do. That is, unlike physical objects, information has no intrinsic restrictions on use which need to be regulated.
Sorry, but that's not so clear. That's true for a song or idea, but there is in fact a limited number of certain "digital artifacts."
Items in an MMORPG are a clear example: I can copy the bits that make up the representation of a certain object (let's say a sword), but that's not the actual object; it's akin to taking a photography of something.
In reality, short of hacking the server (which is illegal by itself, for obvious reasons), there's no way that I can use someone's "digital sword" without depriving the other person of it.
Dilbert RSS feed
... said: "Being an elf doesn't make you turn off the rational economic calculator part of your brain."
But I agree with the license part. Since any virtual property is a construct dependant on the underlying servers (eg Everquest, Second Life etc), then you are bound by the EULA, which usually dresses everything up as a license which can be withdrawn at the whim of the owner of the server.
I hate my flatmate
Actually, even physical property is not really really real. It's just a social contract. If nobody cares, it's meaningless.
Let me explain:
Ownership is not defined by value. At all.
It is defined by control. (Yes, I'm an expert. More than that lawyer, who just says whatever gives him the biggest profit.)
The concept or ownership started, when people were able to keep control over things. And it became set in stone when there was a form of government enforcing it. But when you ever are in the lawless jungle with another person who then takes your stuff, try saying that it's "yours". It's now his. Period. Until you can take it back.
The thing is, that with physical objects, this works. But information is NOT a physical object, and does NOT adhere to the same laws. E.g. copying is lossless and free. And the most important fact: When you pass it on, your control over it becomes equal to the control you have over those you passed it on to. Which for a sufficiently large amount of people becomes zero.
The whole concept of "IP" is deeply fucked-up because of this mixing up of physical matter/energy with the structural properties of that matter/energy (aka "information"). They are not the same!
An the best of it: I you look at the whole freakin' point of the whole concept of "property" and of something being worth something, you'll notice, that any physical object that we call a "good", is just some natural resources (which nobody can own since earth belongs to us all) + a series of works done on it.
With information, it's the same, except that there are no resources. It's just work.
This is where the worth comes from: The work!
And how do we call work that you get paid for? A SERVICE! DUH!
A more realistic view is, that you can ask money for the service. NOT for the result! No matter if it's information or physical matter/energy.
It's just that with information, there is no showing it to others without a transfer. So showing = passing on = too late to want something in return!
Conclusion: If you want money for you work Demand it on the very first exchange!
Otherwise STFU and go hang yourself, since you FAIL at life.
So everyone please stop living in the delusional propaganda world of the media mafia and their racketeering model! All they want, is to get more money without doing any more actual work! (A copy is no work, but is sold like it required work!)
It's a crime. They belong to jail!
Actually the property (a CPU core) is only being used by one person at a time, it just cycles very rapidly between them.
Hyperthreading.
Same for memory or disk space: each sector can only be used by one person at a time.
The compcache project aims to compress disk cache and swap files, as a modern-day spiritual successor to Connectix's RAM Doubler: "With compcache at hypervisor level, we can compress any part of guest memory transparently - this is true for any type of Guest OS (Linux, Windows etc.). This should allow running more number of VMs for given amount of total host memory." If data from multiple hosting accounts gets compressed into the same sector, then multiple people are using that sector.
Or to put it another way: Multiple people can be watching the same TV set showing the same movie at once. Therefore, a disc with a movie on it is not property. What did I miss?
Those games? Those are imaginary. Even this comment is imaginary.
Property isn't just a concept, after all...
Filthy, filthy copyrapists!
Virtual != Real
If you believe that virtual "property" has any real monetary value, you probably believe that the $70+ trillion in derivatives that are floating around the financial system -- larger than the real GDP of the entire planet -- have real value, too.
Of course, the bankers/gamblers will argue that they do but they have just a little bit of a conflict of interest in the matter. One would suspect that having an eight-figure bonus that depends on their having real value is the most important thing on their minds and not whether these financial constructs actually have any real meaning in the world.
CUR ALLOC 20195.....5804M
Justin Kwong, Justin Kwong Justin Kwong. Justin Kwong! Justin Kwong.
The article didn't contain NEARLY enough Justin Kwong's for my taste.
* If virtual property theft were legal - people could maybe steal your $1000 collection of iTunes tracks or your license to use Microsoft Word or something...that kind of virtual property theft should be illegal.
* If virtual property theft were illegal - people could not steal virtual property from each other in online games - which would greatly destroy the fun of those games - so that kind of property theft should be fully legal.
So what should happen (IMHO) is to make virtual property theft illegal - but to have online games where virtual property theft is a part of that game include a line in their EULA that says something like "By parking virtual goods on our servers, you are granting us the right to permanently transfer those goods to other players in the game as a direct result of interactions within the game environment". In other words, you grant permission for your virtual stuff to be stolen within the game world.
That would allow you to prosecute a hacker who broke into the game server and transferred your stuff out of there without doing it in-game - yet allow an in-game thief to steal the exact same stuff with complete impunity.
Final Fantasy mmo TOS clearly states that characters and items in their game are not owned by the player and that square reserves the right to delete items/character at will. the player is only paying for access to the game and not ownership of character/items.
so he's screwed, the police were right to laugh this idiot off. now if it were a game like second life that has provisions in their TOS for item ownership and copyright protection then he'd have a civil case, the police still will laugh you off if you got stolen from in second life or project entropia 2 games that have a large money transfer system.
but in final fantasy noone ones items or characters but Square, reminds me of the guy whining back when Dark age of Camelot was popular how someone stole his cloudsong and was gonna sue... it became a 'meme'
Justin Kwong compares virtual items to a mug club at a bar where patrons purchase rights to a specific numbered mug but cannot remove the mug from the premises. He does note that if in game items are purchased there needs to be clear language stating: 'the transaction is a license, not a sale, and that traditional consumer protections afforded by sales of goods do not necessarily apply.'
Don't forget that neither you or another bar are allowed to put that number on a glass in a different establishment, even if you own the glass and/or the bar, because you're violating copyright and/or DRM by re-using that magic number.
/snark
Ok so virtual properties are not real, that's the very definition of virtual. This has two implications. One, it means that when the company disappears so does your property. Two, it means that if you are the victim of robbery, you end up asking the police to help you get your pretend money back.
In both instances, the game company is the key factor in the reality of your property. In the former case, virtual robbery, it is the game company which has a stand to sue the thief, since the thief basically committed an unauthorised system access.
Also, and much more interesting, is that there isn't a reason why virtual property must evaporate when the game company closes shop. The game company may as well refund your investment in a variety of manners. While this might sound like financially unsound, it can actually have a huge marketing boost.
For instance, let say a popular game, like Team Fortress 2, is closing shop. You have bought a large number of items purported to be placed in the general area above yourself. Rather than just singing So long and thanks for all the fish, they may decide to give you a (similar but reduced) refund in the form of furniture for the The Sims. EA for its part, while seemingly losing money in the deal has basically acquired an entire user base of known-to-pay gamers.
So while I understand that you can't expect to get your money back, an smart company might decide to use virtual property as an asset before getting closed.
But... the future refused to change.
Items in an MMORPG are a clear example: I can copy the bits that make up the representation of a certain object (let's say a sword), but that's not the actual object; it's akin to taking a photography of something.
So the valuable part is not the description of the object itself but instead the service of inserting the description of the object into the game's simulated world.
It's technically feasible to have a virtual world with property owned by the users. But it's not as profitable.
No one has yet built a distributed virtual world on the scale of Second Life. I'm surprised this hasn't been done in some place like Singapore, where there are a lot of high-bandwidth end users. Conceptually, you could have a system where a DNS-like service handles "land allocation", so that activity relative to some area is sent to the owner of that area of land. Each landowner then runs the server for their area.
Movable objects, including avatars, would be digitally signed by their owners. They could be made unique but transferable, if desired, by using something like the Bitcoin block chain, which catches attempts to "double spend". (Bitcoin is an failed financial system but a useful technology.)
Technically, this could work, but it's not easily monetized. And, technically, a virtual world will work better if all the servers have really high bandwidth server farm backbone connections between them. Distributed, it's going to suffer from lag.
The issue here is food labeling. By law when you sell a package of food it must have all of the nutritional data on it. In the bulk items you are citing the nutritional data is on the bulk package - not the individual packages. That’s the issue.
Well, that, and preventing others from obtaining similar objects without paying. After all, they're often status symbols and who'd pay for a status symbol if everyone else could have them?
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Given the "realm" of SecondLife if i "owned" a set of 9 regions (and various buildings and items on said island)
WITHIN THE SL GRID CONTEXT i own everything on those regions (unless they are owned by someone else) and can eject anything and anyone that is on those regions without my permission. Now if i find out that somebody is running some sort of scam on my regions (or making/selling porn) then i AM REQUIRED BY REAL WORLD LAW to eject that person.
Most of the time the Real World Authorities DO NOT CARE what happens in "virtual space" but if a nontrivial amount of money gets involved then they start taking notice.
if somebody "steals" a SecondLife lamborgini then they are not liable for GTA but if somebody is using said lambs in a Money Laundering Scheme then LL can and will get very friendly with the SS or the FBI or any TLA that wants to/ has jurisdiction make things very very unpleasant.
Heck if i was part of any of the TLAs i would have a region or 2 as an outpost just for those times.
Oh and a lot of the SL TOS/Community Standards cover exactly how SL/RL law intersects.
(of course if i had any serious virtual property i would make it using an OpenSim SandBox and then use Phoenix to Import to the SL grid)
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The interpretation of virtual goods not being subject to property law is dangerous as more information is moved to the cloud. It implies that you have no recourse, should somebody steal that information. It implies that the media you "buy" online can have it's lease revoked at any time, without recourse.
I could care less about people who spend real money on in-game items. It's a game. Your priorities are screwed up.
I do not fail; I succeed at finding out what does not work.
What about the IRS? if in game has monetary value then you may have to pay tax even if it's 100% in game and you don't cash out.
This poor guy was indeed robbed. The theft occurred when the $3800 was handed over.
First, there is no such thing as a license to use, or play, etc. etc. This is nothing more than a popular buzz word thrown around to try and trick people into believing it belongs to someone else. A license is required to drive a car, fly a plane, practice medicine, etc. But those all have a licensing board, and there is a law that specifically states you must have a license to do those things.
Computer software does not have a licensing board, or law behind it. In fact the only thing software has is Copyright, which has specific legal restrictions. Everything else, involving them is a contract.
So, can you sell your in game items to other people legally? Yes, but you still might end up in a civil action.
Congratulations to all for this work, this new blog is very successful! A special mention for all items on the com manager!
Voyance
Your argument stinks.
Let's assume for a second that, if you don't pay property taxes, the government doesn't do anything.
Do you not "own" your land because, if you go bankrupt, you can lose land to satisfy your debts?
Do you not "own" your land because it's collateral to a mortgage?
Nevermind that, in most places in the US, the government will NOT take your land due to non-payment of taxes. What they will do is put a LIEN on your land, which basically means you can't sell it until the back taxes are paid.
The reality is, ownership means you control the use of something, and, in the modern civilized world, it usually also means that the government will protect your rights to control the use of something. I.e., if I set up a tent on your lawn, and you don't want me there, you don't have to remove me yourself - you call the police and they'll get rid of me for you. That's an ownership right.
But just because you own something now doesn't mean you can't lose ownership of it against your will. Don't pay your income taxes and the government will come take it from your bank account. Default on a debt and the other party may sue you to seize your property to satisfy it.
So, do you "own" virtual goods? The problem with virtual goods is that their existence depends on someone else keeping the server alive. The bar mug club analogy is not a bad one - not only can you only use your virtual good in the context of someone else's property (the bar/server), your "property" ceases to exist should the other party decide to shut down their operation.
paintball
I would expect that would be more or less like the stock market. You don't get hit with capital gains until and unless you cash out.
Come to think of it, stocks were an early form of "virtual property". Money, of course, is the original form.