Home – Actual Legal Questions Now Being Asked in Virtual Worlds

Actual Legal Questions Now Being Asked in Virtual Worlds


Contributors: Zachary S. Heck, Faruki Ireland
Julian War, Hamlins
Po Yi, Venable
Jessica Borowick, Venable
Andrew P. MacArthur, Venable


Imagine an online virtual reality version of championship boxing, and that you are one of the boxers, well, an avatar of a boxer. And imagine you wear gear on your head and torso that simulates the feeling of getting punched. Your opponent—who is in another state or even another country—has the same gear, so that when you throw a left-hook to his ribs he feels a left hook to the ribs. When you stick a stiff jab to his nose, he feels a stiff jab to his nose.


Now imagine he throws a counterpunch that is right on the button, that is, your chin, and knocks you out. You fall backward and crack your actual head on an actual coffee table. You are now, actually injured in the actual world. What if he is able to keep virtually punching your online avatar when you’re down, exacerbating your actual injuries—potentially crippling or life threatening.


Zachary Heck, an associate at Faruki Ireland & Cox P.L.L., in an article posted by the American Bar Association, asks: are we prepared to charge the user with assault?


Is someone to blame here? If so, whom? Which laws would apply? Which jurisdiction? “If the courts agree that these are indeed crimes, how does the state meet its burden of proof when criminals behind a computer have the advantage of greater anonymity?” Heck asks.


Replace the boxers with poker players who use digital money, or a virtual space where you spend digital money for digital designs or improvements to your virtual home. Or, what if a human-driven avatar breaks into your virtual home and steals virtual money?


Julian Ward, a partner in the London law firm of Hamlins LLP, says in a recent article that legal issues have or will arise in several categories. As in the hypothetical we provided, he said there will be questions around liability for health and safety, whether real rights extend to virtual goods, choice of law, application of criminal law for acts committed in virtual space, and intellectual property rights. In addition, Ward predicts issues with ratings and age classifications of games, as well as moderation of user comments and user-generated content.


With regard to liability, Ward write: “Expect the lawyers of virtual reality (VR) publishers and platforms to go overtime with ‘Warning’ stickers and disclaimer language to try and limit claims as much as legally possible. Allegedly there were a raft of personal injury claims against Nintendo® for sprained wrists and dislocated shoulders arising from gamers overdoing it on Wii® Tennis and Wii® Boxing. It wouldn’t surprise me if we see this tenfold from nausea, headaches, stress and worse with VR.”


Ward noted that Linden Lab, whose virtual world is Second Life, is working on a new VR space in which users will lease virtual land to other players where they can then build and sell virtual items and services within the games. In other words, worlds within worlds.


“This raises the interesting question of whether the ownership of virtual goods should be treated as being akin to ownership of property and goods in the real world,” Ward writes, “as opposed to a licensed service provided by the operator of the VR world and governed by the End User License Agreement.” Of course, he says, the reason all of this matters is money.



Continuing with the Second Life scenario, Po Yi, Jessica Borowick and Andrew P. MacArthur at Venable ask whether the user would have recourse against the platform should it terminate the user’s right to use the platform. “Even if the terms of use or participation agreement clearly stated the Platform’s right to terminate the User’s account or the VR world itself, it is feasible that such termination would probably carry at least some risk of false advertising, fraud and unfair competition-type claims, based on existing laws that have general application,” the attorneys write.


The Venable attorneys say it is possible that “User rights will evolve in VR such that Users get to own and control virtual property analogous to IP protected by copyright and trademark regimes; however, ownership and control will be meaningless unless there is an established value of VR property in the real world or VR that transcends just a single platform. As VR becomes more commonplace and more people participate in VR economies with significant investments at stake, the law will need to catch up with the technology, and there may eventually be legislation to regulate property rights and investments in VR.”


Asserting real world rights to IP created in VR, the Venable lawyers say “it is likely that copyright and trademark laws will apply in a manner similar to how they apply to IP created in the real world, with a few twists. One twist under trademark law is whether a User creating virtual products, such as virtual apparel, could satisfy the ‘use in commerce’ requirement for trademark registration and obtain trademark protection for such virtual apparel. It remains unclear whether a trademark used on such apparel could qualify for real world classification as a good. If the apparel is not used as apparel in the real world, the User may be limited to seeking classification as a service, which could limit the User’s ability to compete and protect against real world apparel that is similar to the virtual goods the User controls.”


Justin Bieber?

“If a program allows participants to walk around as a user-created avatar,” Heck asks, “can someone be liable for false light, defamation or identity theft claims if the avatar looks identical to someone from the real world? Your virtual Justin Bieber could make you liable for real-world tort claims.”


Heck said user privacy is also an issue, one that has been litigated in the actual world. Companies that collect user data will need to take “adequate precautions to safeguard that information from inadvertent disclosure or breaches,” Heck wrote. “Given the different ways that information could flow in VR, protection of that information could prove nearly impossible, and the courts may take differing views of a user’s expectation of privacy in VR.”


Copyright law protects original work, but what is original and protectable in VR if some of the work is based on intellectual property from the actual world?


“Unlike trademark and right of publicity laws, copyright infringement does not require a commercial tie-in,” the Venable attorneys wrote. “Any reproduction, public display, public performance or distribution of another’s photograph, video, music, etc., in VR is sufficient for a copyright infringement. However, copyright protection is not absolute, and use of certain copyrighted material in VR is likely to generate vigorous discussions on fair use, a legal doctrine that specifically permits use without permission from the copyright owner . . . . As in the real world, determining whether a particular use in VR falls under the fair use exception will require an extensive analysis of the applicable facts and circumstances in each instance. Moreover, given the novelty and enormous potential of the VR technology, it will probably take several court cases (and maybe even a further amendment to the existing copyright laws) to establish the scope of copyright protection in VR.”


Secondary Liability

“Neither the current laws nor potential litigants regard Platforms in the same way as Users,” the Venable attorneys say. “Platforms can be held liable for infringements committed by Users, even where the Users themselves are not sued, by virtue of a doctrine called secondary liability. Platforms can shield themselves to some extent from secondary liability in the contexts of trademark and copyright, depending on the type of infringement alleged, by applying appropriate enforcement policies pursuant to constructs that already exist in the User Generated Content (“UGC”) space—e.g., secondary liability and the standard defenses, such as the Digital Millennium Copyright Act (DMCA), Community Decency Act (CDA), etc. These constructs generally shield a platform from liability where the platform (1) did not materially contribute to or induce the infringement; (2) did not receive direct financial gain from the infringement; and (3) did not continue to provide its service to a person or entity that it knows or has reason to know is engaging in infringement.”


“It is not entirely settled whether an internet service provider, including a VR Platform, could be held secondarily liable under a right of publicity claim, but that appears to be the case in at least some jurisdictions, based on cases that have been decided to date,” the Venable attorneys say.


“Similar to the real world, in many ways, Brands may face the greatest liability when sponsoring or providing VR experiences,” the Venable lawyers continue, because using brands or a person’s identity will be considered having a “commercial purpose,” because brands have money, and because they risk reputational harm. “Moreover, unlike a VR Platform, which is likely content-neutral as long as Users are drawn to the technology, a Brand using VR for marketing or promotional purposes will want to create a more controlled VR environment, even dictating what content the Users should create.”


Links to original posts

By Po Yi, Jessica Borowick, and Andrew P. MacArthur at Venable

By Zachary Heck, an associate at Faruki Ireland Cox Rhinehart & Dusing P.L.L.

By Julian Ward, a partner in the London law firm of Hamlins LLP


This article was edited for LexisNexis by Tom Hagy, managing director of HB Litigation Conferences and former publisher of Mealey’s® Litigation Reports.