Virtual Property and the Rule of Law

Michael Meehan
Stanford University

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     Last modified: March 15, 2005

Abstract
Traditionally, property rights were established between a person and a physical object. Today, however, property rights are much more complicated, especially with the rise of virtual environments (VEs). In this paper, we will deal with the complex issues related to virtual property rights - the right to virtual property.

Virtual property rights, the sale of which generate millions of dollars in trade in the online gaming industry every year, refer to one’s rights to items or characteristics within a virtual world. Virtual property can, if appropriate, be protected by traditional property rights such as patents, copyrights, trademarks and other legal devices. For example, an automobile designed in a VE, though it does not exist in a strict sense, may have patentable elements.

Questions arise, however, when we consider virtual items that are “owned” or “possessed” inside a VE and for which the owner has few or unknown rights outside of the VE. These items may include virtual inventory such as weapons, armor, characters, or currency in multiplayer online games and other rights that are protected or, at the very least, can be established within the VE, such as ownership of virtual land.

Consider, for example, that a player of the popular game, Project Entropia, purchased a virtual island for over $26,000. What would happen if the computer went down, the game company went out of business, the land map were upgraded, the game reset, or if there were a bug, hack, or glitch in the system that caused the property to be lost? The questions of “property” rights and duties with respect to the Island turn on the rights and duties of the original “owner”, the game company, and the purchaser.

This paper will explore issues and policy implications and suggest technological and social approaches for developers and gamers to resolve these issues out of real courts and in the virtual worlds.