When Lawsuits Cross Over From The Real To The Virtual

from the problems-on-the-way dept

Wed, May 10th 2006 2:06am — Mike Masnick

It's been almost three years since we first raised the issue about how all of these virtual gaming communities would deal with issues of crime and whether it should be dealt with within the game or outside of it. While there's been lots of discussion on the idea, there's been very little resolution -- and that's going to present a problem eventually. As we've pointed out, where it gets really tricky is that since these virtual worlds are completely controlled by those who made them the legal issues get very complicated, very quickly. The creators of these games didn't necessarily take into account the fact that they weren't just creators, but effectively took on the role of dictatorial governments in these worlds -- and that can have a serious impact. You can easily say that if a theft takes place, especially if the game can generate real money, then obviously the real world police should be involved. However, what if the point of the game includes theft? Some would argue that if theft is bad within the game, the programmers never should have allowed it in the first place (even if it happened by accident). One situation that we expected to get particularly problematic was that of Linden Lab's popular Second Life virtual world. The company announced (to great fanfare) that they were granting real world ownership to products within Second Life, basically bringing all the problems of today's real world intellectual property system into the game world, and then throwing the issue to the courts, rather than the game creators when inevitable conflicts came about. That's resulted in some problems for Second Life before -- but the latest situation highlights the problem clearly.

The Business 2.0 blog points out that a lawyer is now suing Linden Lab for what they describe as "a land deal gone sour." The specifics seem to be that the lawyer discovered an exploit that would allow him to buy land within Second Life at below market value. He invested several thousand dollars in doing so -- and then tried to turn around and sell it for a profit. Second Life discovered what he had done and killed his account, without letting him recoup his money. Now, obviously, the guy was exploiting a hole in the system for financial gain (which likely means Second Life could sue back with a case for fraud). However, this gets tricky again because it's within the world that Second Life has built themselves -- and some might argue that, even if it was by accident, the game is free-form enough that what's in the game is in the game -- whether Linden Lab intended it or not. Given Linden Lab's earlier proud announcement in 2003 that players in the game are given actual ownership of goods within the game, it's entirely possible that a judge may point out that they set themselves up for this. They've clearly said that the buyer, not Linden Lab, owns the property -- and thus, for them to strip the property without recourse could be a problem, partly of their own making. Neither party comes out looking very good in this situation, and it's certainly hard to side with the guy who was exploiting a cheat to make money within the system, but it does show one of the big questions that are going to face many more online worlds, as events within the virtual worlds end up in real world courts.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

22 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

z0idberg, 10 May 2006 @ 3:47am

loophole
So would a "cheat" within the game that allowed the lawyer to purchase land at below market value then sell it on for profit be the same as exploiting a legal loophole in real life for profit?

The way I see it the "laws" of the game are what the game engine allows you to do. So, for example, if one of the aims of the game was to "steal", or commit "crimes" within the game, then the only equivalent to real life laws are the rules of the game engine itself. So if you can find a workaround or a cheat then thats the equivalent to a legal loophole.

In real life you can exploit these legal (or tax or any other loophole) for personal gain. It is up to the law makers to close these loopholes, but until they are closed they can be used legitimately. So it is also up to the game developers to close these cheats/exploits.

At the least I think Linden needs to a) close the loophole/cheat and b) give the guy back the money he invested. They cant just take it back and leave him out of pocket. They can't just say he used a cheat or exploit to get it so take it back, if that was the case how are you to know what is a cheat/exploit and whats a legitimate means of making profit in the game?
[ link to this | view in thread ]
David Zero, 10 May 2006 @ 3:50am

whuuuuuuuuut?
Wow! I always thought that the real world and the virtual should not be mixed. The company (in my opinion) should not be able to give "Real" rights of ownership for virtual property. A judge should look at this case as follows..... "should people really expect to own boardwalk"?
[ link to this | view in thread ]
Matthew, 10 May 2006 @ 4:21am

fta "The suit seeks financial damages in the thousands, in part for a breach of a virtual land auction contract and for violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.
and
In a prepared statement, Bragg (the lawyer suing) said that "These games are like the virtual Wild West, but Linden Lab is still obligated to honor real-world contract law and consumer law, even if their world doesn't really exist."

Now I've played in a couple mmorpgs in my time, and every TOS I had to go through clearly states that I was to report exploits and not abuse them. He purchased "land" that did not yet exist (even virtually as the land was in queue so to speak) with an HTML loophole that has since been fixed.

If you take the guy at his word and consider this game a Wild West scenario that translates directly into real life then he should be tied to a horse and be dragged by it down Main St.
[ link to this | view in thread ]
nunya_bidness, 10 May 2006 @ 4:47am

Lawyers ruin everything...
Leave it to a scumsucking lawyer to exploit a loophole in the system, then get caught, and in return sue to recoupe losses. Linden Labs should claim his account was killed by accident and all records of his 'purchase' were lost because of a bug in the system. I also like the Wild West idea...Yee haa!
[ link to this | view in thread ]
You have got to be kidding me, 10 May 2006 @ 5:13am

WIth all the important issues the court cant find time for we certainly should not be adding virtual ownership rights to the mix. IMHO the court should throw out the case and make both sides pay a fine for stupidity.

BTW I am a gamer, support games, love the reality aspects but ALSO REALIZE this is fiction!!!!
[ link to this | view in thread ]
Republican Gun, 10 May 2006 @ 5:49am

TOS
Can't the TOS, that can change at anytime, solve this?
[ link to this | view in thread ]
Andrew Strasser, 10 May 2006 @ 5:49am

I hardly agree.
Having been banned from games for many different reasons including what they would cite inthis instance. Gross misuse of game mechanics. I'd like to say this statement is posh...

it's certainly hard to side with the guy who was exploiting a cheat to make money within the system

First he found a way to use their gaming system that was wrote by them to create something for himself. It's kinda like blowing up 100's of lightbulbs before you actually get the right one sometimes. Then then penalized him for not only finding a problem in their coding for them, but graphically pointing out how it could be utilized to them so they could see blatantly that it needed fixed. Developers need to realize that when they make a game if it has bugs and you release it to the open market then you have left that in your liscense agreement. Where they have this guy is under their gross-misuse of game conduct clause that every game has. It's not hard to see the company has a case.

The real question is at what cost does that case come. Do you lose all testers and never get anyone willing to find the bugs in your sysytem therefore leaving them open for longer to more people. Or does this maybe even open you up for malicious attack where bugs are wroe directly into your systems. You'll certainly lose players and most likely lose much more than that. The gaming professionals. I've seen it happen in one too many games where the owners thought they knew everything and treated the smart guy who figured out their glitch during live testing of their server with punishment instead of a job offer...

It's stupid and ridiculous to think that you are your game's only chance.... There are thousands of people who play these games for the sole purpose of finding the bugs. I pride myself everytime I get a letter asking me to Alpha or Beta test a game. I know I am good at them and normally find bugs rather quickly. You really have to look at both sides.

I was once banned for using my trading skill to buy and sell diamonds in a game that they had for sale at a special exhibit. This was their idea of gross misuse of game conduct. Being a merchant buying low and selling high with someone who has a super high trading skill is smart business not cheating. Maybe look at who made the mistake programming don't take it out on the players. It's the employee's job to make sure you game is stable and bug free.

But then again this wasn't talking about Simu or Gemstone.
[ link to this | view in thread ]
Anonymous Coward, 10 May 2006 @ 7:19am

Punishment
I think killing his account was definitely a bit overkill. But if this was bought with real money, then he essentially did commit fraud, real legal can-get-you-sued fraud, and he should have known better.

Imagine hacking the ATM at the bank and getting it to give you $20s instead of $10s. I think the bank would be a little peeved.

Anyway, since the game creator's are dictators, can't they essentially claim eminent domain? Since the lawyer essentially stole the land by fraud, he wouldn't need compensated.
[ link to this | view in thread ]
Amos, 10 May 2006 @ 7:26am

Re: I hardly agree.
"Then they penalized him for not only finding a problem in their coding for them, but graphically pointing out how it could be utilized to them so they could see blatantly that it needed fixed."

BS! He wasn't "pointing" anything out, he was secretly trying to scam the system to make a personal profit. There's a HUGE difference between telling the company that a bug has been found vs keeping the bug to one's self and exploiting it. It's the same as the difference between "testers" and "scummy game-ruining cheaters who whine about getting caught".
[ link to this | view in thread ]
Matthew, 10 May 2006 @ 8:03am

Re: I hardly agree. by Andrew Strasser on May 10th

This was their idea of gross misuse of game conduct. Being a merchant buying low and selling high with someone who has a super high trading skill is smart business not cheating.

Not knowing the details of your case, I don't think this quite applies. This Bragg character "bought" land not available to the public (if I'm reading this right), and then tried to sell for a profit. Other player comments appended to the original article dispute the possibility that this reached thousands of real dollars so the lawsuit seems frivilous, but this sounds like a form of insider trading or something Halliburton gets to do. And they should be dragged behind horses down Main Street as well.

Furthermore, the implication that this treatment will scare away Alpha & Beta testers is ridiculous and smells like sour grapes. A&B testing is always done with a grain of salt, and if a tester is foolish enough to be paying real money for items/gifts in an Alpha or Beta version not likely to be carried on to production then that tester deserved to be parted from his or her cash. Finding bugs is not equivalent to coding the thing in the first place.

There is an invisible badge of pride in being a tester if not some sort of in-game rewards involved, and if a product is worthy the line will be long to be of that group. However, the Developers should keep in mind that the product needs to be worthy and that no one is infallible.
[ link to this | view in thread ]
Normski, 10 May 2006 @ 8:04am

Sort it out virtually
The obvious answer is to get a virtual judge, two virtual legal teams and a virtual jury to decide. That way it'll be just like real life... the only people who gain are the lawyers (in virtual cash), an extreme judgement (millions in virtual compensatation) as a result of a biased jury decision (come on, which Second Life citizen isn't going to find against an in-game scammer) would make it just like the real thing!
[ link to this | view in thread ]
Heather, 10 May 2006 @ 8:45am

"Possible" does not mean "legal"
The article reads, "[S]ome might argue that, even if it was by accident, the game is free-form enough that what's in the game is in the game -- whether Linden Lab intended it or not. Given Linden Lab's earlier proud announcement in 2003 that players in the game are given actual ownership of goods within the game, it's entirely possible that a judge may point out that they set themselves up for this."

The thing is, the real world can be exploited in the same way--but that doesn't mean it's okay. Just because something is possible does not make it right. That's why there are laws against it in the real world.

There are probably laws against it in the gaming world, too. I'm guessing that there is such a rule in the game, probably in the user agreement. If the lawyer clicked through the user agreement, then under contract law he is obligated to follow those rules or lose his account. He broke the virtual law and must pay for it.
[ link to this | view in thread ]
Are comments screwed up across the board?, 10 May 2006 @ 9:48am

Let's find out.
[ link to this | view in thread ]
MAX, 10 May 2006 @ 9:49am

Boundaries
[ link to this | view in thread ]
Mike (profile), 10 May 2006 @ 9:59am

SORRY!
Hey everyone,

Sorry, we were making a backend change and accidentally screwed up the comment code. It should be working again.

Very sorry for the inconvenience...

Mike
[ link to this | view in thread ]
ChronoFish, 10 May 2006 @ 12:03pm

Seems simple to me
Here is a case where two wrongs does not make a "right". The lawyer dude found an exploit - i.e. a loop-hole. 2nd Life creators freaked and stole his money.

The proper solution in 2nd Life, as in the 1st Life (real world) is to patch the hole (close the loop-hole) so that the exploit can not continue to be "exploited".

This is what congress does - it doesn't throw the dude in jail for doing something illegal (because it's technically not illegal) - but they prevent him from continueing down the same road by changing the law (rules/code).

Since my 1st Life is plentyful and busy enough I have not found the need to get sucked into 2nd life - and so I have no vested intrest in the game one way or another and admittedly I'm sure I'm missing some part of the story.

-CF
[ link to this | view in thread ]
csven, 10 May 2006 @ 2:09pm

I was aware of this when it first came to light on the SL forums. Like others, I went to see the "closed auctions" that signaled someone was scamming the system. Where the website clearly spells out that auctions for sims (a computer Linden Lab maintains and which hosts a section of the virtual world) begin at US $1000, I saw closed auctions indicating the winning bid was US $2.01, $5.01, aso. As I've stated elsewhere, I doubt thousands of dollars in cash was spent since had that been the case, hundreds of sims would have likely been sold at those prices. I'm unaware of this occurring as such a large number of sims would have triggered the developers attention - not some lone voice on the SL forum. It's worth noting that the "Land Store" system is quite new, so this would have had to occur over a relatively short period of time. What I suspect is that this individual included his own time (calculated at lawyer's fees) in with the rest to make the damages sound worse than they are (which then gets more attention from the media and gives his legal firm plenty of free publicity).

I don't know. But that's what I'm thinking based on what I've seen and read.

With regard to Linden Lab granting intellectual property rights, apparently people aren't aware that a computer game coded entirely within Second Life has migrated to the handheld market and the objects built by residents inside the world have been fabricated by the same rapid prototyping machines used by manufacturers (and product designers like myself). If not for this first step, there'd be little incentive for people to push the limits. By all means there should be virtual spaces which remain segregated from the real world. However, this doesn't mean everything should be. Variety is ... you know the saying.
[ link to this | view in thread ]
Andrew Strasser, 10 May 2006 @ 8:06pm

Think of it like this when you first figured out U U D D L R L R B A B A select start did you think of it as a fault in the game or a bonus. I personally like my current games attitude of bonus until proven bug. Carnage Blender
[ link to this | view in thread ]
|333173|3|_||3, 10 May 2006 @ 11:50pm

International Rules
IMHO, there should be international rules for virtual worlds, separate from the real world. They should include
- The creators have dictatorial powers, unless a specific Constitution is included in the Original liscence agreement. the oly way to change the Constitution should be by the governing body explained in the constitution. Once the Constitution is changed, the new constitution becomes the terms of the liscence agreement, which must then be agreed to by all users.
- Laws are written by the governing body, if present, otherwise by the creators of the world, and should be sent to all user as they log in. If a user has not yet seen the law (which can be easily trached by the server(s)), then it does not apply to him.
- All disputes within the world are to be settled are to be settled within the cours system of the world. If there are no courts within the world's constitution/laws, then the developers form the only legal system.
- Anything which is possible within the engine's coding is legal unless otherwise stated in the laws of the world.
I am sure that others will be able to add to these simple rules.
[ link to this | view in thread ]
thecaptain, 11 May 2006 @ 5:34am

Re: I hardly agree.
First he found a way to use their gaming system that was wrote by them to create something for himself. It's kinda like blowing up 100's of lightbulbs before you actually get the right one sometimes. Then then penalized him for not only finding a problem in their coding for them, but graphically pointing out how it could be utilized to them so they could see blatantly that it needed fixed. Developers need to realize that when they make a game if it has bugs and you release it to the open market then you have left that in your liscense agreement. Where they have this guy is under their gross-misuse of game conduct clause that every game has. It's not hard to see the company has a case.

Bah, I've played many MMORPG and online games and I've seen this argument trotted out by every loser who needs to cheat to make his epeen grow. Usually because if he actually played the game he wouldn't be able to get anywhere on his own merits.

/begin whine

Waaahh its SO UNFAIR! I'm HELPING THEM FIND BUGS..WAAAH.
Its UNFAIR...the GAME LET ME...its not MY FAULT..

/end whine.

The fact is, this person put in the time and effort to FIND A WAY TO EXPLOIT THE GAME FOR PROFIT.
The fact is, he didn't do it to report a bug, or out of the kindness of his own hard, but to cheat the game and other players to line his own pockets.

Frankly, I'm glad he lost his money. Wrong is wrong and as a society we are teaching that lesson less and less.
[ link to this | view in thread ]
oneofyoursims, 18 May 2006 @ 3:51pm

hello to the artistically-technical entrepreneurs
how do you compensate your sims in real life that the 'model' sim is based upon. we're seeking royalties and looking into asking FWCDS and FWTVS to explain their role as well.
[ link to this | view in thread ]
Eep, 24 Jul 2006 @ 2:08pm

object ownership IP rights
Not only is land owned by residents, but their objects (inventory "content") as well, which I am in the process of persuing legal action against Linden Lab for unjustly banning my Second Life (SL) account and not giving me my content I have spent the last 1.5+ years creating. I own the rights to it so I should be entitled to it. See my SL website at http://tnlc.com/eep/sl/ for more info.
[ link to this | view in thread ]