A few years ago Julian Dibbell wrote a book called Play Money — Or, How I Quit My Day Job And Made Millions Trading Virtual Loot, which detailed the year he spent trying to win a bet with himself. The bet: that he could make more money by killing trolls and demons (or making armor) in Ultima Online than he ever had as a writer. Quirky concept, I agree, but the more you look into it the more interesting the idea gets, especially when you realize that the gold pieces used as currency by Ultima Online and other massively multiplayer online games (e.g., World of Warcraft, Eve Online or Lord of the Rings Online) are actually traded online in the same way that say, Brazil’s currency (the real) is. And many of the currencies from virtual worlds are more stable than those circulated by certain South American regimes.
There are a number of legal issues from virtual worlds that have superficial interest or — perhaps better stated — create the equivalent of cocktail party chatter for the intellectual property crowd. For example, in many online worlds you may chose to be an honorable member of the Thieves Guild, in which case it is perfectly acceptable for you to wander the world breaking into houses and stealing jewels and gold and artifacts — you’re a thief, after all, so it’s basically your job to act in this fashion — whereupon you can trade these items for something else in virtual reality (e.g., food, weapons, a horse, a house, etc.), or if you managed to get your hands on something truly exceptional you can simply list it on eBay and sell it for real dollars. So you’re stealing from people in virtual reality, fencing the goods on eBay, and pocketing the cash in your PayPal account, all tax free, since the IRS has no idea how to value what you’re doing. And did I mention it’s all perfectly legal?
Apart from the idea of a currency exchange (which makes sense when you realize that more than 10,000,000 people play World of Warcraft regularly, and many other MMOGs have over a million subscribers), these online worlds are rapidly changing the way intellectual property law works. Intellectual property, of course, deals with intangible assets, and thus dovetails perfectly with the concept of intangible worlds. Recently, though, the questions asked have been real brain twisters. For example, who owns the rights to your avatar — the “you” you created — in the online world? What if you upload a real photograph of yourself to the game server and the character you are playing actually bears your face — which you can actually do in Tiger Woods PGA Tour 10? What if the user agreement you signed (by clicking “I agree” when you logged on for the first time) says that all intellectual property in the game, including anything you create while using the game, remains the property of the corporation that owns the game? Who owns your avatar now? Most people never even read the user agreement, of course, but does the fact that it’s mandatory that you agree in order to play the game mean that it’s a contract of adhesion and can be voided, or does it mean you foolishly gave up your intellectual property rights in exchange for the privilege of being a half-elf ranger wandering the forests of Elfheim during the 22 hours a week you play the game?
If this sounds too theoretical, note that last year Taser International sued Second Life for trademark infringement because characters were using, and selling, virtual replicas of tasers in the game. Sounds silly, doesn’t it, until you find out that people pay $100 million to Linden Labs every year to buy Linden dollars so that they can clothe and feed their avatars in Second Life, and that the virtual reality gray market generates about $6 billion in revenue annually. And then someone tells you that Ben Folds Five actually did a live concert in Second Life (and you couldn’t hear it unless your avatar bought a ticket and attended), and Judge Richard Posner of the Seventh Circuit Court of Appeals has given lectures in Second Life, and Coke, Pepsi, Gap, Versace, Porsche, McDonald’s and all the other corporate sponsors are sniffing around figuring out how to protect and capitalize on their trademarks in these realms. Somehow, the more you look at it, the less silly it seems. Where real money stands to be made by playing with Monopoly money, the law perks up its ears and starts paying attention.
I am a commercial litigator and intellectual property lawyer in Orange County. Although my practice encompasses a wide variety of business disputes, I have a particular fondness for, and am prone to wax philosophical on, the subjects of copyright and trademark infringement in music, literature, art, and film.