Virtual property from the perspective of the Brazilian and Dutch legal frameworks Master’s thesis June 2012 Tilburg University Law School Tilburg Institute for Law, Technology, and Society (TILT) Master Law & Technology Author: Bernardo Barcelos Administration number: 514016 Supervisor: prof. dr. E.J. Koops Second reader: mr.ir. M.H.M. Schellekens Table of Contents 1. INTRODUCTION ............................................................................................................ 02 1.1 Aim of this thesis .....................................................................................................03 1.2 Methodology . ……………………………………………………………………………………………………… 03 1.3 Research Questions .............................................................................................. 04 2. SOCIAL VIRTUAL WORLDS AND ONLINE GAMES: OVERVIEW ............ 06 2.1 Concepts and features of virtual worlds ........................................................... 07 2.2 The relation between the “Magic Circle” and the “real world ..................... 12 2.3 Remarks .................................................................................................................... 15 3. END-USER LICENSE AGREEMENT (EULA), TERMS OF SERVICE AND USERS: A DIFFICULT RELATIONSHIP ............................................................... 18 3.1 End-user License Agreement (EULA): Definition and characteristics .... 18 3.2 Consequences of the contract termination and ways for the settlement of disputes ........................................................................................................................ 20 3.3 Enforceability ............................................................................................................ 23 3.4 Real Money Trading (RMT) Clause and real-world commodification: How EULA handles this issue .................................................................................... 25 3.5 Remarks .................................................................................................................... 27 4. VIRTUAL PROPERTY RIGHTS WITHIN THE CONTEXT OF THE CIVIL LAW TRADITION: THE DUTCH AND THE BRAZILIAN LEGAL PERSPECTIVES ............................................................................................................ 29 4.1Virtual property ......................................................................................................... 29 4.1.1 Definition and main features .................................................................... 29 4.1.2 The code as an object of protection within virtual worlds ................ 32 4.1.3 The relationship between virtual property and intellectual property ..................................................................................................................... 33 4.1.4 Ownership in virtual worlds ...................................................................... 34 4.1.5 Virtual property within the context of virtual worlds ........................... 36 4.1.6 Industry’s criticisms towards virtual property rights .......................... 37 4.1.7 Virtual property rights through Utilitarian, Lockean and Hegelian perspectives ............................................................................................................. 40 4.2 Aspects of property under the Law outlook .................................................... 42 4.3 Analyzing property under the Civil Law ........................................................... 44 4.4 Analysis of the virtual goods from the perspective of the Brazilian Civil Code and Criminal Code ............................................................................................. 45 4.5 Analysis of the virtual goods from the perspective of the Dutch Civil Code and Criminal Code ............................................................................................. 51 4.6 Remarks .................................................................................................................... 61 5. CONCLUSION .......................................................................................................... 64 6. REFERENCES .......................................................................................................... 74 LIST OF ABBREVIATIONS EU European Union EULA End-user license agreement FTC Federal Trade Commission GVW Gaming Virtual World IPR Intellectual Property Rights MMO Massively Multiplayer Online Game MMORPG Massively Multiplayer Online Role-Playing Game MUD Multi-User Dungeon OECD Organisation for Economic Co-operation and Development RMT Real Money Trading STJ Superior Tribunal de Justiça STF Supremo Tribunal Federal SVW Social Virtual World VW Virtual World TOS Terms of Service UCC User Created Content 1. INTRODUCTION The Technological development of the ICT sector brought us many innovations that not only aid to optimize ours tasks results, but also improves mankind’s ability to expand their social relations beyond borders in this globalized and interconnected world. With millions of players connected, persistent computer- mediated environments called virtual worlds 1 play an important role. If on one hand virtual worlds such as Runescape and World of Warcraft are used for entertainment purposes, on the other hand virtual worlds can be used as platforms for socialization, educational or training purposes like Second Life. In these virtual environments, the users are often symbolized by graphical representations called “avatars” that are not only used to interact with other users, but also to interact with virtual objects (such as virtual houses, virtual helmets, virtual clothes, etc.) which can be exchanged among users of the same virtual world. In 2005, a Chinese online gamer has been given a suspended death sentence for killing a fellow gamer because the victim sold his virtual sword for £473 2; In 2011, a hacker was convicted in the UK for stealing $12 million in virtual currency chips from an online company 3 and The Dutch Supreme Court, in 2012, upheld the theft conviction of two youth who stole another boy's possessions in a popular online fantasy game 4. These cases might indicate that there is a type of computer code that shares similar characteristics of physical objects. This specific type of computer code that behaves like a real-world object is defined as virtual property. Among so many discussions, the issue regarding virtual property in virtual worlds still is a recurring theme. Some 1 Bartle, Richard A. "Virtual Worldliness." The State of Play: Law, Games, and Virtual Worlds. Ed. Jack M. Balkin and Beth Simone Noveck. New York: NYU Press, 2006. 31-54. Print., p. 31. 2 Chinese gamer sentenced to life. BBC News, 8 June 2005. Web. 20 June 2012. <http://news.bbc.co.uk/2/hi/technology/4072704.stm>. 3 Purewal, Jas, ed. The first virtual currency crime: hacker jailed after $12m Zynga theft. Gamer/Law, 17 Feb. 2011. Web. 20 Feb. 2012. <http://www.gamerlaw.co.uk/2011/02/first- virtual-currency-crime-hacker.html>. 4 Dutch Supreme Court: Forcing teen to drop virtual objects in online game was real-world theft Read. Global News, 19 Jan. 2012. Web. 17 Feb. 2012. <http://www.globalnews.ca/world/dutch+supreme+ court+forcing+teen+to+drop+virtual+objects+in+online+game+was+realworld+theft/6442570452 /story.html>. 2 countries are experiencing recent judicial answers regarding this topic which is bringing the virtual world much closer to the real one. 1.1 Aim of this thesis The objective of this thesis is to analyze the law´s response of the Brazilian Civil and Penal Code, and Dutch Civil and Criminal Code in regard to main elements and attributes existing within the virtual property. I will also provide a comparison between the Brazilian and Dutch legal frameworks having as a main reference the recent Dutch Supreme Court ruling regarding the theft of virtual goods. 1.2 Methodology This thesis will be based on literature review, law cases and the Dutch and Brazilian Civil and Criminal Codes. Since that virtual goods are a type of code that is designed to act like a physical object, I will analyze this issue as follows: Under the Brazilian legislation, my focus will be article 83, I, of the Brazilian Civil Code (related to the concept of chattels by legal means) and, article 155, § 3 of the Brazilian Penal Code (regarding to crime of theft of electricity and other economic valuable “energies”); Concerning the Dutch legislation, the emphasis will be on the definition of “things” by the article 3:2 of the Dutch Civil Code and the study of the article 310 of the Dutch Criminal Code (which is related to the crime of theft of “goods”). Moreover, the Runescape case (LJN no. BQ9251 of the Dutch Supreme Court) will be examined along with the aforementioned article 310 of the Dutch Criminal Code. It is important to point out that this novel jurisprudential positioning of the Dutch Supreme Court courts concerning the possibility of possessory right of a user over virtual items (which were considered as “goods” in the meaning of the article 310 of the Dutch Criminal Code) in Gaming Virtual Worlds is a paradigm shift in the relationship between companies and users within the magic circle 5. Considering that virtual worlds’ 5 Magic Circle “can be considered a shield of sorts, protecting the fantasy world from the outside world”. Castronova, Edward. Synthetic Worlds: The Business and Culture of Online Games. Chicago: The University of Chicago Press, 2005. Print. p. 147. 3 users are growing worldwide, it is an excellent