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

[Steve {Bloo} Daniels]

Joe Andrieu wrote:

> 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.

Which courts hate to do. Contracts are easy.


> 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 my opinion is that a contract that tries to treat digital property
as property won't be enforced by courts on property right principles.

Who sues who in the first place?  Digital victim sues service
provider/game company?  Then it's a simple matter of whether the
provider followed the enforceable provisions of the contract; the
'property' issues can be entirely circumvented.  Digital victim sues
digital perp?  How?  Assuming you could prove identity and establish a
prima facie case of digital evidence, if both were playing within the
guidelines of the provider contract and rules of conduct, there is no
issue.


> 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.

I didn't mean what a court could do.  I meant what a game designer who
wanted to have a legal property system *within* a game could do.

> 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.

And I strenously argue that the digital "property" you describe (I
keep it in quotes because I don't accept the premise) cannot, will
not, and could not be handled like that.


> 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.

You don't believe in integration clauses or the statute of frauds?
Interesting.


> 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.

I believe you mean "adhesion".  For the non-legally inclined on the
list, an "adhesion contract" is a "my way or the highway" kind of
contract.  In the area of entertainment for the consumer, adhesion
contracts do not raise the spectre of disproportionate bargaining
power present in other areas because games are not 'necessities' and
are not significant consumer expenditures.


> 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.

So I can put up a fence and keep you out?

As the classic parody of Woody Guthrie goes:

  "This land is my land, this land ain't your land,
  I got a shotgun, and you ain't got one,
  If you don't get off, I'll blow your head off.
  This land belongs to me and not you."

> 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.

Nope.  And court's don't go looking for opportunities to imply terms
either.


> 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).

Is that they're motivation?  To preclude court intervention?!  Don't
get me wrong, preclude legal intervention is usually a good thing for
a business to do, but there is no good reason to be worried about it
in the first place.  To get in that position, they have to guarantee
that they'll return property and such in the first place, and I doubt
the contract says anything like that.  And no such term is likely to
be implied.  Look in the TOS for a clause that runs along the lines of
"Failure enforce any of these rules on the Service Provider's part is
not a waiver of the Service Provider's right to do so and does not
imply anything."  That's the "Get-out-of-ludicrous-implied-terms"
card.

> My argument basically comes down to a basic Law & Economics
> argument:

Which is a pity.  I tend to stay out philosophy arguments because
there is rarely any useful resolution.  For the non-legally inclined,
"Law & Economics" is a legal philosophy, of which there are several
such as "Natural Law", etc.  I forget all the permutations because I
find them less useful in the real world than they were in law school.


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

Yes, but only because I don't accept your premise of digital
"property".  In the real world, property exists.  The land is there.
Intellectual property is created by an author (copyright), inventor
(patent) or merchant (trademark).  Where does digital "property" come
from?  How is it "property" like other forms of property?  These might
be interesting questions if you believe that the digital "property"
you describe can exist.  I don't.


> 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.

Well, I wouldn't say "regularly".  In the less than 10% of cases that
actual go to a judge or jury, liquidated damage clauses that are found
unfair, unreasonable, etc., are ignored.  That simply means they
aren't immune to judicial scrutiny.

-bloo

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