An interesting legal development in USA involving a law suit in physical space over a dispute of a virtual property has attracted attention of Cyber Law specialists. A case has been filed by a Pennsylvania resident Marc Bragg against San Francisco-based Internet game company Linden Lab and its president and CEO for alleged conversion, fraud, unjust enrichment and breach of contract and for allegedly violating several California laws.

The origin of the conflict is through an online game “Second Life” run by Linden Lab. In this game the players can buy, sell, lease land and other assets through a currency created in the game called “Lindens”. Lindens can also be bought in exchange of physical currency such as US Dollars.

In the Game, there was an piece of land owned by Linden Lab which was vacant (in the context of the game). This piece was put up for auction by Mr Bragg in the game’s auction space which earned him lindens worth US $ 2000/-.

Linden Lab now says that the piece of land had not yet been released by the company for auction and hence Mr Bragg had no “ownership title” (i.e. virtual ownership) on the  land. It says that Mr Bragg’s auction is illegal and therefore has seized his land (virtual) and the balance in his account worth US $ 2000/-.

This case will throw up interesting discussions on the nature of virtual property and transactions in which virtual acquisitions are in dispute.

It is clear however that the virtual acquisitions had the requisites of a “Property” since they had a value, could be owned, transferred or otherwise dealt with. If the value of the property was entirely in the virtual currency such as “lindens’, then the dispute would have been entirely in the virtual space and fit for a “Virtual Court” to decide. But in the instance case, the convertibility of lindens to dollars creates a distinct link to the physical world and hence the dispute spills over to the physical space.

Similar problems will arise in the future in several other transactions on the virtual space and we should keep ourselves mentally prepared for accepting new concepts of virtual property and laws relating to virtual property. The initial attempt is of course to extend the known physical society concepts to the virtual space while in due course we need to develop separate Cyber Jurisprudence to deal with such disputes.

For example, if the Bragg’s case is to be decided in India according to physical laws, the nature of the property being “Land”, the transfer should be subject to “Transfer of Property Act” and “Registration Act”. Transfer of Property Act does not however recognize “virtual land” as an immovable property and therefore the transaction would not be valid under its provisions. If however, the piece of “Virtual Land” is considered a “unit of property” created out of the contractual agreement between the player and the gaming company as well as one player with another player, while it enables application of the concepts of  “Contract Laws”, it conflicts with the basic requirement of “Meeting of the Minds” in contracts. The reason is that in this case, the parties dealt with the “unit of property” as an “Immovable Property” and not as any thing else. If the buyer and the seller thought and acted as if thy were buying and selling a piece of land, it would be in appropriate to adjudicate on the dispute ignoring this basic thought behind the transaction and considering it as some thing else. They had the psychological satisfaction of using it as land, perhaps constructed buildings over it, rented it out and experienced all the pleasures and pains of ownership of an immovable property. In fact some characteristics of this virtual property give it an “Intellectual Property Character” since the way the property is used is a “Creation in the minds of an imaginative player”.

It would therefore be neither appropriate to treat the dispute as a “Transfer of Property Dispute” or a “Contractual Property Dispute”. The IPR laws such as copyright could be closest to the property but still does not meet the “Meeting of Minds” test.

It is for this reason that has been advocating that Cyber Laws have to be drafted “By the Netizens” and “For the Netizens” for it to have some meaning. We need a fresh thinking on most of the disputes and we should “Learn to Unlearn” our physical society concepts. This is the first principle in the development of “Cyber Jurisprudence”.


( Vijayashankar )

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