The State of Play conference series, hosted by New York Law School from October 6th to 8th, focuses on the relationship between virtual worlds (often relating to big MMO games such as EverQuest or World Of WarCraft or more user-created games such as Second Life) and physical world laws. Now in its third year, State of Play is gaining the confidence to tackle both the really big questions of legal theory and the practical implications of what cyber-law means to game developers, players and everyone else.

	A panel discussion at State of Play III.

Chilling Effects Reach Into Virtual Worlds?

The first big debate of the conference was titled "Law in Virtual Worlds", and focused on very practical issues facing gamers and developers.

Kicking off with a discussion of the recent Grokster and Brand X court decisions, a number of panelists suggested that virtual worlds are yet another example of the trend for companies with legitimate intellectual property rights and legal muscle are leveraging those rights to restrict all kinds of freedoms that individuals and organizations used to have.

Greg Lastowka, of Rutgers Law School and the Terra Nova blog, suggested that it is both the scale of virtual worlds and the fact that activities within them are visible to intellectual property owners that has given rise to the legal attention they getting.

Discussing the highly contentious Marvel / NCSoft case (Marvel sued Cryptic Studios and NCSoft in November of 2004, claiming that the City of Heroes MMORPG allows players to imitate comic book characters owned by Marvel), panelists mused over whether character creation tools are like coloring books or an Etch-o-Sketch. Ann Bartow, from the University of South Carolina, argued that a recent case brought by Disney against a day-care center suggests that intellectual property owners seek to maximize control of their property irrespective of the scale of an alleged infringement or the tools used.

	Marvel claimed that City of Heroes allows players to imitate Marvel characters .

The panel also discussed the use of trademark claims between companies. Several of the panel being of the view that aggressive use of trademark law is having a detrimental impact on the industry as defending a claim can suck huge amounts of project time and budget, and often services to stifle certainty rather than giving just rewards to creators - which was one of the original intentions of intellectual property law.

These trends seem to spell bad news for developers. Anyone is open to an aggressive trademark case and a small developer might not survive the legal costs. Developers whose software can, even in theory, be used to create digital assets that could be seen to infringe an organizations intellectual property may also be vulnerable to legal action.

The Great Debate

Next up was the centerpiece of State of Play III - the grandly titled 'Great Debate', in which 6 eminent scholars went 3-on-3 to debate the proposition: "A legal system based on geography, territory and physical force is inappropriate for virtual worlds" (the debate can be streamed in full here: http://www.nyls.edu/pages/3903.asp). Here the moderator Dan Hunter (University Of Pennsylvania) shifted focus from the way that companies might challenge virtual world developers to the rights that nation states have to intervene in virtual worlds.

Developers will be happy to hear that one point on which both sides agreed was that legislators are unlikely to be concerned with regulating questions of pure in-world game mechanics (e.g. how many XP a character should get for killing a mob). Where disagreement really broke out was over the role that states should have in regulating in-game activities that have out of game consequences; especially consequences that a particular country sees as detrimental to its citizens (particularly relevant in light of recent restrictions on MMOs in China).

Those opposing the motion, Viktor Mayer-Schoenberger (Harvard), Joel R Reidenberg (Fordham) and Tim Wu (Columbia), took it as self-evident that, as servers, infrastructure and people are situated in countries, and (for the most part) countries have a legitimate form of government, then those countries have a natural right to govern in-world events that have out-of-work consequences that they see as illegal or harmful to society in some way. The only question that seemed to remain for those opposing the motion was what kinds of consequences mattered and exactly what criteria (e.g. server location and / or player location) counted.

	Second Life, an open-ended virtual world.

In previous years, similar discussions have forensically analyzed the law of intellectual property and its relationship with virtual light sabers and the like. This year, panelists focused on gritty cases from Internet law such as the issues of Nazi memorabilia and child pornography. Those opposing the motion adopted the pragmatic position that if, say, Germany found a virtual world being used for the distribution of Nazi memorabilia to Germans (which is outlawed in Germany) then they have every right to take action against that virtual world wherever the servers happened to be located. Similarly any country would the right to take action against virtual worlds used to distribute child pornography.

The team supporting the motion, David Post (New York Law School), Richard Bartle (developer of MUD1, TerraNovan and author of Designing Virtual Worlds) and David Johnson (New York Law School), deployed a range of arguments to suggest that virtual worlds should be largely self-governing. The case of child pornography was rejected by Post as being so exceptional that it does not prove any general rule. Bartle, on the other hand, argued that a virtual world should have the same "right" to allow child pornography within its space as any real country, but that it should expect the same response in terms of sanctions and direct action that any real country could if it did that - in other words, war. To be clear, Bartle was not advocating child porn worlds, but was suggesting that if virtual worlds were treated as self-governing states then other countries would still have effective regulatory powers because when it came to a "war" a physical state would always win. The only issue was how much a rogue virtual world would have to misbehave before some real-world state attacked it, and what other real-world states might come to its defence.

In the case of Nazi memorabilia, Post suggested that it is not clear that any transaction is occurring in Germany, so while a country can regulate what its citizens do in that state, he saw no 'right' to dictate what goes on in the virtual world. Johnson, like many others at the conference, argued that virtual worlds have a profound effect on society. For Johnson, "law is a story we tell each other" and "virtual worlds break the narrative" - but in a positive way. As Bartle also argued, if designers are free to set up virtual worlds how they choose, then people will choose among a competing set of regulatory environments, giving them a richer set of life choices.

Michael Froomkin (Miami), acting as the debate's judge, juror and executioner declared the winning team to be Post, Bartle and Johnson, the prospers of the motion, as ultimately they are optimists and without them there would be no argument. What this means, from the point of view of legal scholars, is that there is at least an argument to support a designer's freedom to design any virtual world under whatever rule system they want - as ultimately, individuals will decide if they want to inhabit that space and if physical world governments object sufficiently they can declare 'war' on it.

Invited To The Skirmish?

Under the guidance of Beth Noveck of New York Law School, the three year old State of Play has now ably broken down some of the barriers between legal theory and development reality. Virtual worlds, it seems, are becoming one of the sites of a pitched battle between those that argue for possibility of greater freedoms and those that warn of the danger of greater abuses. Any MMO developer interested in being part of the discussion should check out the video streams and book a ticket for NYC in 2006.

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