Digital Property Law [was RE: [MUD-Dev] Selling training]

[Joe Andrieu]

> -----Original Message-----
> From: mud-dev-admin at kanga.nu
> [mailto:mud-dev-admin at kanga.nu]On Behalf Of
> Steve (Bloo) Daniels
> Sent: Wednesday, March 14, 2001 1:35 PM
> To: mud-dev at kanga.nu
> Subject: Re: Digital Property Law [was RE: [MUD-Dev]
> Selling training]


> Pardon this real lawyer for jumping in this late to the thread.

No pardon required. I am definitely not a lawyer, but I am intrigued
about how law, and in particular, Law & Economics, can/will impact the
development of MUDs, either from a design perspective or from a
real-world judicial impact.

> Joe Andrieu wrote:

>> The best long term solution is to figure out the right > way to
>> treat digital objects as property--with clear delineation as to the
>> nature, scope, rights, and responsibilities of the property owner,
>> as well as a civil and/or criminal procedure for backing up those
>> rights and responsibilities--and to implement such a legal system
>> within the game robustly enough so that a real-world court would
>> find the service sufficient in its duty to protect the property of
>> those using its service.

>> That's a tall order. But I'm betting someone will figure it out
>> sooner or later...

> I'll cover that bet and give you odds.

> Digital '1property' doesn't lend itself to the same treatment of
> physical property.  One copy is an infinite number of copies.  What
> if I mug you, take Item X, dupe it, and give it back to you or the
> local 'authorities'?  No harm, no foul?  IMO, continuing to think of
> digital things in similar ways to physical property is an exercise
> in ultimate futility.  Real world property is complicated enough if
> you don't believe me, sit in on a couple of Property class sessions
> at your nearest law school.

> What you could do is have a checklist which details what digital
> things in game a character is allowed to possess and use, an
> authorization system, essentially.  There are a myriad of ways to
> enforce and check that kind of system.  You can track for
> unauthorized use or possession and react accordingly.  Generate a
> bounty or reward, smith the fiend with the hammer of Thor or just
> 'fix' the situation with omnipotence.  Of course, that would all
> still be covered the TOS and relevant waivers of liability and
> disclaimers, which ar contracts, and courts are good at dealing with
> contracts.


Sure, but contract law is not property law.  The issue I raised is
about when/if a judge decides that the property aspects of a given
case outweigh the contract aspects.  Speaking from a Law & Economics
perspective, contracts are not the efficient means for dealing with
all the various aspects of property law, so its likely that not all
the terms required to deal with property rights are going to be put
into a contract. So, if one attempts to create a contract that treats
digital property like real property, it wouldn't surprise me for a
judge to imply terms to the contract which the service did not intend.

And your suggestion "What you could do" is effectively the same thing
as the court requiring certain features in a game world. Whether its a
direct court order or a pre-emptive action taken to avoid the courts,
both have similar effects in terms of the courts driving design
issues.

But my real point isn't so much about judges implying terms into the
current service agreements, although that is part of the claim in the
UO case. (And I don't know the status of that case, in case someone
could give an update...)

Rather, I argue that trends in digital property (1) could lead to such
implied terms and (2) will lead eventually to digital property being
handled as a variation of real property in the real-world courts.

Some of what is happening today in virtual worlds is moving towards de
facto property rights, despite TOS agreements attempting the contrary.
First, because there's a lot to cover about property rights that is
probably not in a TOS. And I believe that since any written contract
is only a memorandum of the actual agreement, other aspects of the
agreement could be asserted based on the actual practices of the
service. So there may be implied terms even though the TOS tries to
avoid them.  Second, a TOS is fair game for an argument of cohesion,
because every user is pretty much required to sign it and has no
practical opportunity for negotiation.  I'm not sure what the current
case law is in this area, but if cohesion is a viable argument, this
case certainly seems to be the place for it.

Secondly, I would argue that creating property rights in MUDs is a
Good Thing(tm) for the same reason that property rights are a good
thing in the real world.

You point about duplicability is true, but doesn't address the nature
of this new scenario.  If an virtual object is stolen from me, I don't
get it back.  If I do, as in Achaea, then there is an implied
commitment on Achaea's part to do so. And they are effectively
implementing a rule of law about ownership of items purchased with
real-world dollars.  So, Achaea is actually doing exactly as my
argument suggests, they are implementing their own system of property
rights, precluding the courts from really getting involved by
minimizing the "error costs", to use an Law & Economics term (the
costs of filing a suit are clearly greater than the value of one
hour's lost value).


My argument basically comes down to a basic Law & Economics argument:
Laws & courts aren't necessarily going to enforce current real-world
law in virtual spaces. But they will, and should, find the efficient
means for people to be able to carry on their daily activities. In the
real-world, the system is built on property, contract, criminal, and
tort law (ignoring constitutional law for the moment).  Some sort of
alternative system *will* come into place that will provide an
efficient means of activity in virtual worlds.  The specifics may vary
from service to service (each effectively their own jurisdiction for
certain issues) or may be enforced externally to all virtual services.

>> The courts may very well hold that any item purchased is property
>> and therefore, the service provider has an obligation to provide
>> reasonable protection of that right, possibly including the
>> provision of criminal and/or civil process within or outside the
>> game in order to pursue violations.  In other words, the > game may
>> be forced to provide police and a court system if the > real-world
>> court has determined that the services' digital objects are
>> property.  It's not that far fetched when you consider that US
>> courts are already aggressively applying US law to events that
>> happen outside the US.

> What?!  No offense, but this is ludicrous.  Won't happen.  Never.
> That's so out of the bounds of sanity that I can't take you
> seriously.

Well, I would suggest opening your mind. With all candor, and no
offense intended, you sound like a backward-looking luddite who can't
see that the world is changing right under your feet.

Would you agree that the current laws don't deal with digital property
and digital "worlds"?

I say they don't.  I further say that a new system of laws must
emerge.  I also say that it is emerging with or without any conscious
intent to create such a system, as in Achaea's 1-hour regen mechanism.
I argue that it is in a MUDs' interest to move first and attempt to
establish a system that starts out in their favor. Finally, I assert
that digital property rights are better than not having digital
property rights for the same reason they are in the real world:
because of the economic value that such rights create in the overall
system. And therefore, I suggest, all of this is inevitable. (The
timeframe may be nearer or further, but sooner or later the
efficiencies of expanding property law to include digital property
requires it.)  And the MUDs that figure it out earliest will have some
advantage over the others.

> And your reference to the application of jurisdiction concerning
> events outside the physical jurisdiction is not to the point.  There
> are many forms of legal jurisdiction, not all of them limited the
> site of the event. However, *enforcement* of that is often limited
> where there is no physical jurisdiction.

I think you are supporting my point about jurisdiction. It's not a
simple matter of moving your servers or pretending that "cyberspace"
isn't subject to the same laws as the real world.

> Matt (the_logos) wrote:

>> I guess what I hope the courts do, and what I suspect they will do
>> eventually, is to recognize that a virtual world, particularly a
>> virtual gameworld, is a place in which law enforcement is
>> essentially impossible.

> That isn't what they will do. They have a much easier path. The
> virtual worlds are governed by contracts.  Courts are very good at
> dealing with contracts. But these virtual worlds are also 'mediums'
> and crimes can be committed through mediums, so don't hold your
> breath waiting for a 'we can't go there' opinion from courts.  If
> someone commits a significant wire fraud and SEC violation through
> EQ, you can bet your sweet tukas that the courts would rip that nut
> wide open, though that shouldn't really impact gameplay.

But courts regularly overturn contracts based on factors from
criminal, tort, property, and constitutional law. US courts, for
example, regularly overrule liquidated damages in contracts.

I agree that the courts WILL get involved (it just takes a lawsuit or
a significant crime as you mention).  And since they will get
involved, they can also interpret the contracts underlying the service
agreements in ways that service providers did not intend.  Digital
property being one of the more interesting areas where that might
happen.  More to my point, this is a good thing for economic reasons,
just don't get blindsided by it.

-j

--
Joe Andrieu
Realtime Drama

joe at andrieu.net
+1 (626) 395-1011


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