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  SXSWi 2008 Notes:  Human and Property Rights in Virtual Worlds  
Posted 2008-03-09 by Tony Walsh
SXWi 2008 rough notes: "Human Rights and Property Rights in Virtual Worlds"

Susan Wu- If we don't address legal issues as publishers and developers, we will lose control [presumably through regulation]

Scenario: Your Tier 5 armor which took 6 months to acquire gets nerfed, do you have legal protection against devaluation?

Eric Bethke- No.

Boyd- Game world designers should have control over that decision [to nerf the armor, I think].

Scenario: You lose equipment following a server crash, do you have the right to have that property replaced?

Andrew Schneider- yes

Bethke- yes
Boyd- publishers can treat you however they want within the law. If I were running a game I would bend over backwards to give it back.

Schneider- This is all covered in EULAs, ToS, how rules are communicated to gamers

Scenario: You are afflicted by a kill-stealer, what are your rights?

Bethke- Here's where human rights come in. We are working on that addresses some of this. EULAs say the publisher is god. I don't think the govt is going to step in and regulate us first, I think instead publishers will offer better and better rights. Second Life marketed the idea of users as part owners. I compared SL's ToS to North Korea's constitution. With BetterEULA, we will set up [some kind of court system, sounds like a total nightmare].

Scenario: Bragg vs. Linden Lab
Boyd- Bragg was toaded [ref: MUDs], but the money in Second Life is "real."

Wu- SL's marketing didn't match the ToS. Courts decided there is such a thing as virtual property rights, it has tangible value... In Haboo Hotel, a Dutch teen was arrested for social engineering, stealing furniture -- charge was burglary.

Boyd- We were pondering this earlier. Normally, account hacking is an electronic place, burglary is related to a residence or premises...

Wu- What is the jurisdiction here? It's very confusing.

- What are virtual property rights?
- What are human rights in virtual worlds?
- How should they be expressed and protected?
- Who should bear the cost of enforcement?

Boyd- There's no universal definition of property rights, it's all based on the EULA.

Schneider- Click to agree EULA are enforceable... the agreements need to be rock solid... every developer and publisher has a different point of view on this... my company has to work with a range of agreements/rules... Each MMO has its own constitution and bill of rights...

Wu- If every MMO has its own rules, doesn't that create a lot of confusion among consumers and industry fragmentation?

Bethke- WoW is the biggest MMO failure. The limiting factor is security of property rights. I don't understand this lack of acceptance of virtual property... games use all the concepts of possession and ownership... North America has a litigious environment, and that's causing problems...

Schneider- Do property rights come with transfer rights, backup rights?

Bethke- The law comes from common law, which comes from user expectations. I think people come up with strange end-cases...

Boyd- I believe that developers should be able to do whatever they want, but should do it with their eyes open. After you tell someone they own something, you have invoked many years of legal precedent and statutes related to property that come with a lot of trappings. EULAs can simplify this.

Wu- So publishers and operators are scared?

Boyd- They are risk-averse.

Bethke- If you're a tourist, I'm not going to grant you all these rights. If you're paying me, then you earn more of my attention. We're trying to simplify this, I love the creative commons licenses, that's what we're trying to do. The stuff in GoPets is "your stuff" and we will replace it if we lose it. We're not responsible for its "value." We punish griefers-- make a report, bring them to a court of jurors... I want to promote GoPets as the fairest place you can be.

Wu- So SL with a good license?

Bethke- [doesn't disagree]

Boyd- Virtual properties include things we generally consider "real."

Wu- Your world (Bethke) gives players a lot of rights, property has real-world value. At some point the courts will recognize that property as real. Who has the legal right to enforce your rules?

Bethke- I think my EULA will be safer for me than current EULAs. If we are going to ban you, we will try to do it in a humane way. If we try you in our court, you get a choice of location.

Wu- What about Habbo Hotel where criminal law comes into play.

Bethke- A lot of Asian courts already take virtual crimes seriously.

Wu- Do property rights necessitate real money trading? (RMT)

Schneider- There's cash value and other kinds of value, such as the time needed to acquire the item.

Boyd- You can't think about property rights without RMT... many issues related to RMT, gambling regulations, banking regulations, money laundering, taxes... these are not really things we know yet [in terms of answers]... these are all magnified with a cash-out component... no attorneys have the answers yet...

Bethke- Society doesn't have the answers yet, how are lawyers expected to have them?

Wu- How quickly will the law catch up?

Bethke- 40M people use eBay but don't pay taxes. It's a gray market, and the govt hasn't stepped in... we geek out a lot about VWs, but there are lots of things that haven't been hit for taxation, VWs are just in line, not necessarily first...

Boyd- No resolution for 5 - 10 years.

Schneider- We are trying to be completely compliant, we have on-staff lawyers to help us do the right thing under current regulation, it is not a black and white issue, some issues are state and not federal... Live Gamer is an English-style auction, similar to how eBay works... $200M in gray market transactions annually...


Q: Will real world institutions enter VWs or the other way around?

Schneider- Many major legal questions surround VWs, but you don't want this to bog down the player experience...

Wu- We use VWs to escape the real one...

Schneider- Our service is mindful of breaking immersion... as people place more value on their virtual personas, I think that distinctions go away...

Bethke- The word "virtual" will go away.

Q: What IP do players own when they create collaborative work product from game play?

Boyd- A whole thesis could be written on this... we are not really there yet...

Bethke- We haven't even figured out how to do individual rights, group rights are not in view...

Q: How can virtual property be the same as real if there is no cost for duplicating virtual property?

Schneider- If you have unlimited product, it's going to flood the market... if everyone had the same product, it wouldn't be so special... there are in-game balancing issues, you want scarcity, demand, reputation...

Wu- What obligations does Linden Lab have to control its economy?

Boyd- If I'm a smart designer, I owe it to the people not to let MUDflation run rampant.

Wu- Eventually, will VWs compete on the basis of user rights rather than other features?

Bethke- Yes.

Boyd- It will be difficult to separate rights out... rights will be like another game feature...

Bethke- The world design will govern rights. Things that gain a lot of attention, you need people to invest a lot of time and creativity. You will need to give them rights to get that investment.

Q: About "ownership" of software...

Boyd- Most EULAs provide for resell provided you delete it on your own machine. That's not part of the license with virtual property, typically.

Bethke- Operators are afraid of being sued... they write down in a EULA what they think will work...

Q: Ms Wu, how does this industry uncertainty affect investments in this industry?

Wu- Uncertainty creates opportunity. Inevitably, the word 'virtual' will disappear. These legal issues will work themselves out.
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