I’m pleased to announce that I’ll be discussing virtual law (and Virtual Law) with the always-engaged and always-engaging crowd at Sophrosyne’s Salon this Saturday, May 10 from 1:00-3:00 Second Life time (Pacific). This is usually a fairly free-form event, and I am looking forward to an active discussion covering many aspects of virtual law from both a practical and philosophical perspective. Hope to see you there!

Pacific Epoch reports that two Chinese virtual item and currency traders were recently arrested.  The pair had been plying their trade within Blizzard’s World of Warcraft, operated in China by The9 Limited. Chinese police arrested them after one partner reported the other for unfair revenue distribution. In business since last August, the gold farming operation had 20 employees and generated nearly RMB 1.6 million (US $228,915) in only nine months of dealing.

What happens next is up to the Chinese authorities, but we can bet the pair are hoping for just a game ban. Hopefully their penalty is less severe than some of the recommendations for gold farmers that I’ve heard shouted in Ironforge.

I’d say the moral of this story is that crime doesn’t pay, but is gold farming even a crime? Maybe in China. And it also seems to have paid pretty well for this pair. Real moral…don’t forget to share with your partners! Sharing means caring.

Digital rights advocacy group Public Knowledge (“PK”) recently filed an Amicus Curiae (“friend of the court”) brief regarding Blizzard’s copyright claim (.pdf) against MDY Industries, maker of the popular World of Warcarft bot “WoW Glider” (now “MMO Glider”). Although the brief ostensibly supports neither side and is filed “in the interests of preserving the balance between buyer and seller; reader and author,” the core of PK’s argument is that Blizzard’s copyright counterclaim is not justified.

Public Knowledge argues that while Blizzard may have a contract law claim (PK offers no opinion on that), “Blizzard’s attempt to use contract to alter and displace those aspects of copyright law it does not like, while using copyright penalties to construe and enforce the terms of that alteration, is untenable, and the Court should not endorse it.” The brief goes on:

Blizzard has options for addressing cheaters, including disabling their accounts and bringing actions for breach of contract. It may also have remedies against MDY based on tortious interference with contract or other non-copyright causes of action. However, in seeking to curb MDY’s allegedly perfidious behavior, Blizzard may not undo Congress’ work in establishing statutory rights for the rest of the WoW users or for digital consumers more generally.

For the background of this case, see VB’s complete coverage of MDY v. Blizzard. Very briefly, Glider is a program that users run along with World of Warcraft. It automates key tasks in World of Warcraft, making it possible to play the game essentially unattended. Glider users can thus both harvest resources and generate high level characters without actually playing. Blizzard claims that Glider violates Blizzard’s copyright in World of Warcraft when it copies the game into the computer’s memory as part of its loading sequence.

The Electronic Frontier Foundation weighed in this morning as well, with a blog post praising Public Knowledge’s move. From the EFF post:

Blizzard’s theory is wrong, because it confuses a copyright holder’s intellectual property rights in the software it develops with a buyer’s rights in the actual copy of the software. An owner of software has a right to copy it if that copy is essential to the customer’s use of the software. (See Section 117 of the Copyright Act.) This rule is a crucial part of the balance Congress crafted between the rights of the copyright holder to manage and benefit from its expressive work, and the rights of the public to innovate, recreate and otherwise use and build on that work.

Blizzard argues that players aren’t owners but merely software licensees, so section 117 doesn’t apply. But court after court has held that the question of whether a user is an owner for purposes of Section 117 depends the substance of the transaction, not just how one party wants to describe it. For example, if you buy the software, keep it on your own computer and don’t have to return it when you are done, you probably own it.

Public Knowledge is represented on the brief by Sherwin Siy and Jef Pearlman, as well as by Connie Mableson of Phoenix law firm Dodge Anderson.

Kristan J. Wheaton, an assistant professor of intelligence studies at Mercyhurst College, recently published a note regarding original research into potential Jihadist use of virtual worlds at Sources and Methods. The findings are far less hyperbolic than the usual coverage of this subject, and seem sound. From Wheaton’s post:

A group of five students in my winter Strategic Intelligence class were asked to take a look at “the nature, volume, and likely current use of YouTube, other hosted video sites and Second Life by jihadist networks and individuals, and what will the likely future use of these mediums be over the next 12-24 months?”

Interesting stuff here. From the key findings regarding Second Life:

• “Jihadists are likely currently very minimally using Second Life.”

• “…over the next 12-24 months jihadists will likely begin to explore the ability and utility of the virtual world’s applications for money laundering, communication, and recruitment through propaganda…Use will likely be limited to merely exploring due to currently existing alternatives…”
  

• “The most effective countermeasures will likely rely on a close, working relationship with Linden [Lab] due to the systems in place to monitor financial transactions, avatar activity, and communication.”

The students’ original research and analysis is available via a course wiki.