Laws of Play

Courts Further Consider Virtual Property Disputes

Pennsylvania lawyer, Marc Bragg, recently sued San Francisco-based Linden Lab for breach of contract and unfair trade practices after an online property deal went sour. Oddly, the property at the heart of the dispute is entirely virtual and exists only in Second Life. The lawsuit, which sought several thousand in damages, was settled out of court in a confidential agreement.

Bragg’s lawsuit underscores an important question that has recently piqued the interest of politicians and lawyers alike: Do virtual economies, such as those found in various MMORPGs, need to be regulated? And, if so, should the regulations that exist in the physical world apply?

While still uncommon, numerous disputes concerning virtual property have found their way into courtrooms in both the US and abroad. For instance, a recent case found a New York man liable for selling unauthorized copies of numerous Second Life users’ virtual goods. And, in Germany, a 17-year-old was arrested for stealing virtual furniture from within a piece of social networking software.

The idea of litigating such matters was considered laughable not long ago, but the popularity of online games like World of Warcraft and Second Life have created billion-dollar virtual economies where people trade real currency for virtual assets on a daily basis and, thus, lent credibility to such litigation. As these economies continue to grow, there is little doubt that litigation will continue and legislatures will be forced to not only determine what rules should govern these economies, but how these economies can and should be policed.