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«VirtualLife WP 7 Virtual Nation Juridical System D7.4 Research on Specific Legal Challenges of Virtual Worlds AUTHORS UGOE CATEGORY Confidential ...»

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D7.4 Research on Specific Legal Challenges of Virtual Worlds


WP 7 Virtual Nation Juridical System

D7.4 Research on Specific Legal Challenges

of Virtual Worlds


CATEGORY Confidential




INTERNAL REVISION Revised on 28/06/2011 by VU-FC

DOCUMENT NAME D7.4 Research on Specific Legal Challenges of Virtual Worlds Final Public 1 D7.4 Research on Specific Legal Challenges of Virtual Worlds Table of Contents

1.1 General Issues and Introduction to Virtual Worlds

1.2 Personality Rights in a Virtual World

1.2.1 Protection of the Virtual Identity: Users and their avatars

1.2.2 Reputation Systems in Online Environments

1.3 Protection of Intangible Goods

1.3.1 The Concept of Virtual Property; Intangible Assets

1.3.2 Copyright Law: Protection of Virtual Items and the Platform Itself; Infringements.11 1.3.3 Patents and Trademark Rights

1.3.4 Competition Law – In-Game Advertising

1.4 Data in the Virtual World: Data Protection and Authentication/Verification.. 15

1.5 Contractual Relationships in the Virtual World

1.5.1 Among Platform Provider and Users; EULA

1.5.2 Between Users of Virtual Worlds

1.6 Legal consequences of infringements

1.6.1 Law of Torts: Damages, Disturbance Liability and Injunctive Relieves

1.6.2 General Criminal Law; Child Pornography

1.7 Virtual Currency and Payment Systems; Taxation

1.8 Miscellaneous

Final Public 2 D7.4 Research on Specific Legal Challenges of Virtual Worlds Executive Summary Following from the preliminary report on the legal fundamentals, which outlines the legal particularities of virtual communities, further legal research has been conducted in specific areas of law that have proven to be of particular interest within D7.1 and that arose within the following project years. This includes the clarification and interpretation of existing laws as well as the constant monitoring and evaluation of publications relating to law in virtual worlds.

The results of this research have influenced the writing and revision of the legal documents following up the research in D7.1 and the first version of the VirtualLife EULA and Sample Constitution for a first Virtual Nation in D7.2. These documents were D7.3 in which online dispute resolution and monitoring obligations of the platform provider have been a matter of particular interest. In D7.6 contractual relationships between the users of a virtual world have been researched in order to draft sample contracts. Additionally the research concerning the particularities of the specific chosen validation scenario (Virtual Campus), especially regarding its copyright and data protection questions, has been enhanced. In D7.5 a final version of the VirtualLife EULA and Sample Constitution of the first Virtual Nation, the Virtual Campus, are being formulated.

The following document contains a selection of scholarly pieces regarding the researched specific legal challenges of virtual worlds. It gives an overview of possible sources for further information and thus indicates which authors and in which journals relevant analyses of legal questions in virtual online environments may be found in the future. It shall serve as a guideline for deepening research and may be published to an interested audience. It is not limited to sources that analyse European law or national law of Member States, but also considers international analyses and in particular articles from an US-American point of view. This enhances not only the possible perspectives of assessing virtual worlds legally, but is also helpful as virtual worlds due to their internationality may be subject to various different jurisdictions and even in European law there is no harmonisation of the legal rules of its Member States.

The bibliography has been commented so that the reader can get a quick overview of the content of possibly interesting articles which deal with virtual worlds and issues closely related to the legal assessment their legal particularities. The notes and short abstracts shall not substitute studying the articles themselves, but rather give a roadmap of which issues are relevant and which conclusions the particular author draws.

The thematic structure helps finding relevant literature regarding the main topics that are raised if one is engaged in assessing legal questions of virtual worlds: Protection of intangible goods either with regard to the concept of “virtual property” or to general intellectual issues of protecting items and rights in a virtual world environment; protection of the user‟s personal data as well as identity management and authentication; contractual relationships between the operator and the users as well as between the users themselves; legal consequences of infringements with regard to both civil and criminal law; and the questions of virtual currency with its similarities and differences from real world currency. In the general introduction to virtual world issues also non-legal articles are mentioned which are closely connected to the question why and to which extent a regulation of virtual worlds is needed.

–  –  –

1.1 General Issues and Introduction to Virtual Worlds Balkin, Jack M., Virtual Liberty: Freedom to Design and Freedom to Play in Virtual Worlds [2004], Virginia Law Review, Vol. 90, No. 8, 2043 - 2098; Yale Law School, Public Law Working Paper No.

74. Available at: http://ssrn.com/abstract=555683 (last called 30th May 2011).

Content: Basic questions of freedom and regulation in virtual environments Bloomfield, Robert J., World of Bizcraft (2010), Johnson School Research Paper Series No. 8available at: http://ssrn.com/abstract=1486210 (last called 30th May 2011).

Content: The article frames features required of a platform (which Bloomfield refers to as „World of Bizcraft‟) that supports virtual worlds dedicated to research and education on business-related topics. This includes et al certification of players‟ achievements, the ability to control participant interaction, collaboration and creation of game assets; production functions that capture the realities of real businesses; sophisticated property rights that support complex software-enforced contracts; and comprehensive systems for business reporting.

Bradley, Caroline M. and Froomkin, A. Michael, Virtual Worlds, Real Rules (2004); New York Law School Law Review, Vol. 49; University of Miami Legal Studies Research Paper No. 2008-22.

Available at: http://ssrn.com/abstract=1127722 (last called 30th May 2011).

Content: Potential of virtual worlds to experiment with legal rules.

Casati, Rebecca et al, Alles im Wunderland, Der Spiegel 8/2007, 150 - 165.

Content: Introduction to the social and economic chances of virtual worlds – general description of Second Life as the most prominent example of virtual worlds.

Deenihan, Kevin Edward, Leave Those Orcs Alone: Property Rights in Virtual Worlds [2008], Available at: http://ssrn.com/abstract=1113402 (last called at 30th May 2011).

Content: Users interact in a virtual world and thereby develop the legal rules which server their actual needs.

Diegmann, Heinz and Kuntz, Wolfgang, Praxisfragen bei Onlinespielen, Neue Juristische Wochenschrift (NJW) 2010, 561 – 566.

Content: Overview of essential problems in online-games and virtual worlds: the transfer of virtual items; qualification of contracts concerning these development platforms as lease; inclusion of EULA clauses and consumer protection.

Fairfield, Joshua, The End of the (Virtual) World [2010], West Virginia Law Review, Vol. 112, No.

1, 53; Washington & Lee Legal Studies Paper No. 2010-7.

Available at: http://ssrn.com/abstract=1611672 (last called 30th May 2011).

Content: The worth of a virtual world in case of banktrupcy determines the terms of loans that creditors are willing to make; legal impact of digital objects and intellectual property licenses in virtual world bankruptcies.

Fink, Eric M., The Virtual Construction of Legality: „Griefing‟ & Normative Order in Second Life [2011]. Journal of Law, Information, & Science, Vol. 21.1.

Available at: http://ssrn.com/abstract=1669804 (last called 30th May 2011).

Content: Complements existing scholarship on law and virtual worlds, by describing how users of virtual worlds construct and deploy an informal normative order in case of the absence of a formal legal system and official legal institutions within that worlds.

Grimmelmann, James, Virtual Borders: The Interdependence of Real and Virtual Worlds [2006], First Monday; NYLS Legal Studies Research Paper No. 08/09-9.

Available at: http://ssrn.com/abstract=868824 (last called 30th May 2011).

–  –  –

Habel, Oliver M., Eine Welt ist nicht genug: Virtuelle Welten im Rechtsleben, MultiMedia und Recht (MMR) 2008, 71 - 77.

Content: Classification of virtual worlds in contrast to online games – general description of the virtual platform Second Life.

Hamari, Juho, Virtual Goods Sales: New Requirements for Business Modelling? [2009] Available at: http://ssrn.com/abstract=1574791 (last called 30th May 2011).

Content: Business aspects of virtual goods sales.

Kane, Sean F., Virtual Judgment: Legal Implications of Online Gaming [2009], IEEE security & privacy, Volume 7, Number 3, 23 - 28.

Content: The author discusses the problems caused by the fact that legal issues inherent in virtual worlds and massively multiplayer online role-playing games (MMORPGs) are extremely complex but still at a nascent stage; overview of the current legal landscape.

Kaplan, Andreas M. and Haenlein, Michael, Consumer Use and Business Potential of Virtual Worlds: The Case of “Second Life” [2009], International Journal on Media Management, Volume 11, Issue 3 & 4, 93 - 101.

Content: Considerable business potential of virtual worlds as they are seen as an extension of their real lives by consumers.

Klickermann, Paul H., Virtuelle Welten ohne Rechtsansprüche?, MMR 2007, 766 - 769.

Content: Gives an overview of legal issues and possible legal claims in virtual worlds (applicable law; economics (virtual property, virtual goods)) and analyses defects liability on transactions.

Lastowka, Gergory F. and Hunter, Dan, The Laws of the Virtual Worlds [2004], 92 Cal. L. Rev.

3 - 73. Available at: http://ssrn.com/abstract=402860 (last called 30th May 2011).

Content: History of virtual worlds, thoughts on the differences between law in the virtual world and real-world law.

Lastowka, Gergory F., Virtual Justice [2010]. Available at: http://ssrn.com/abstract=1702427 (last called 30th May 2011).

Content: Illustration of recent lawsuits and controversies; overview of history and business models of today‟s virtual worlds.

Levine, Alec, Play Harms: Liability and the Play Conceit in Virtual Worlds [2010], 41 McGeorge L.

Rev. 929.

Content: The economic and social values of virtual worlds deserve more protection than the current regime of self-governance affords.

Mennecke, Brian et al, Second Life and Other Virtual Worlds: A Roadmap for Research [2007], 28th International Conference on Information Systems (ICIS).

Available at: http://ssrn.com/abstract=1021441 (last called 30th May 2011).

Content: Outlines the topics and challenges of research in virtual world legal issues.

Mayer-Schoenberger, Viktor and Crowley, John R., Napster's Second Life? - The Regulatory Challenges of Virtual Worlds [2005], KSG Working Paper No. RWP05-052.

Available at: http://ssrn.com/abstract=822385 (last called 30th May 2011).

Content: Real-world law concepts should be implemented in nascent virtual worlds in order to avoid a Barlowian virtual space which cannot be regulated anymore.

Naone, Erica, Ein Avatar für viele 3D-Welten, Technology Review, 1 May 2008.

Available at: http://www.heise.de/tr/artikel/Ein-Avatar-fuer-viele-3D-Welten-275126.html (last called 30th May 2011).

–  –  –

Naone, Erica, 3D-Welten im Peer-to-Peer-Verfahren, 5 May 2008.

Available at: http://www.heise.de/tr/artikel/3D-Welten-im-Peer-to-Peer-Verfahren-275144.html (last called 30th May 2011).

Content: Advantages of peer-to-peer infrastructure of virtual worlds.

Naylor, David and Jaworski, Andrew, Virtual Worlds, Real Challenges [2007], Entertainment Law Review 18 (8), 262 - 264.

Content: General introduction to virtual worlds; summary of the Bragg vs. Linden Lab case regarding the usage of CopyBot in Second Life.

Ondrejka, Cory R., Escaping the Gilded Cage: User Created Content and Building the Metaverse [2004-2005], 49 N.Y.L. Sch. L. Rev. 81.

Content: Amount of items created by users in Second Life; definition of “crafting” and “atomistic construction”; on the creation of objects and the differences between virtual worlds, such as Second Life and World of Warcraft.

Ondrejka, Cory R., Education Unleashed: Participatory Culture, Education, and Innovation in Second Life [2008], The Ecology of Games: Connecting Youth, Games, and Learning, Katie Salen, ed., MIT Press.

Available at: http://ssrn.com/abstract=1079245 (last called 30th May 2011).

Content: Differences of virtual worlds and massively multiplayer online role-playing games.

Poian, Michele and Cagnina, Maria Rosita, Business Models and Virtual Worlds: The Second Life Lesson [2010].

Available at: http://ssrn.com/abstract=1847893 (last called 30th May 2011).

Content: Role of virtual worlds in innovating business models.

Risch, Michael, Virtual Rule of Law [2009], West Virginia Law Review, Vol. 112, No. 1, 1 - 52.

Available at: http://ssrn.com/abstract=1463583 (last called 30th May 2011).

Content: Theoretical and practical barriers to implementation of the rule of law in virtual worlds;

discussion of different way of regulating virtual worlds; practical failure of current regulation approaches and suggestion how to enhance legal rule in virtual worlds; interdependencies of rule of law and business development in virtual worlds.

1.2 Personality Rights in a Virtual World

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