[Excerpt] “Many Americans use “it” every day. Although it is intangible, it may be worth thousands of dollars. Because we can both control it and prevent other people from controlling it, we assume, without much thought, that we own it. Sometimes we pay someone a monthly fee to hold it for us. Sometimes, simply by using it, we increase its value. When we finish using it, we often sell it.
“It” is virtual property, and it may take the form of an email address, a website, a bidding agent, a video game character, or any number of other intangible, digital commodities. If it were to be damaged or stolen, the immediate questions would be: (1) how should a court identify it; and (2) what degree of legal protection should it receive? Because no court or legislature in the United States yet has recognized virtual property interests, a combination of contract and custom currently controls the relationship between Internet users and service providers. […]
The question therefore becomes, how should courts identify protectable virtual property interests? Partially due to the dramatic success of Massively Multiplayer Online Games (MMOGs)9 and the rise of secondary markets for virtual characters and treasures from those games, a recent frenzy of legal scholarship has struggled to resolve this question. This note supports the legal recognition of virtual property interests, as already convincingly justified by the legal analogy to traditional property interests set forth by Professor Joshua Fairfield, buttressed by the practical reality that virtual property has significant economic value.
Building on these rationales, this note proposes five indicia, common to most forms of virtual property, which a court should use to identify legally protectable virtual property interests on the Internet. These indicia are: (1) rivalry; (2) persistence; (3) interconnectivity; (4) secondary markets; and (5) value-added-by-users. This note cautions, however, against applying this newfound definition indiscriminately against the interests of the very entities without whom the property would not exist: the businesses hosting the remotely accessed computer resources (i.e., the service providers). […]
Part III of this note applies the five indicia to the well-established framework of traditional property to illustrate this balancing process. Throughout the development of the law in this area, courts must retain the freedom and flexibility to craft appropriate equitable remedies on a case-by-case basis, and special attention should be directed to the practical issues commonly faced by Internet service providers. The ultimate purpose of virtual property jurisprudence should be to strike a balance that provides legal redress to users whose legitimate virtual property interests have been violated while simultaneously reducing liability and disincentives to service providers who promote and sustain the growth of the Internet.”
Charles Blazer, The Five Indicia of Virtual Property, 5 Pierce L. Rev. 137 (2006), available at http://scholars.unh.edu/unh_lr/vol5/iss1/8