I am pleased to announce that the ABA’s Section of Science and Technology Law recently formed a new committee on Virtual Worlds and Multiuser Online Games. I have the honor of co-chairing this committee, along with Sean Kane, of Drakeford & Kane, and Cristina Burbach, of Fried Frank. From the Committee’s initial “who we are” statement:

The Virtual Worlds and Multiuser Online Games Committee (“VWMOG Committee”) of the Section of Science and Technology Law of the ABA will focus on the legal issues raised by the existence of virtual worlds and massively multiplayer on-line role playing games. [...]

The VWMOG Committee’s immediate work plan includes creation of a website, an email listserv, and a facility in the virtual world of Second Life. Longer term goals include organizing programs for future ABA meetings and facilitating the publication of research articles and texts addressing legal issues related to virtual worlds and multiuser online games.

ABA members who are interested in virtual law are encouraged to join the committee, or contact me, Sean, or Cristina directly for more information.

Readers may recall that World of Warcraft operator Blizzard is involved in a suit with MDY Industries over the popular World of Warcraft automation program “WoW Glider” (recently renamed MMO Glider). MDY brought this lawsuit seeking a declaratory judgment that MDY does not violate Blizzard’s intellectual property rights by selling the Glider program. There’s a good summary of the case up to now over at Patent Arcade if you’re not already familar with it. So far, the filings have mainly been preliminary in nature, and most are about as interesting as… well, as leveling a WoW character without automation software.

The documents that are worth the click at this point are MDY’s amended complaint, Blizzard’s answer and counterclaims (adding MDY owner Michael Donnelly to the suit as a counterclaim defendant), and MDY and Donnelly’s answer to Blizzard’s counterclaims. Also potentially of interest to readers watching this case: a case management order has been entered setting January 25, 2008 as the close of discovery, and making dispositive motions due February 29, 2008. Finally, a protective order was just entered, which clears the way for sensitive discovery.

VB will continue to run only irregular updates on this case until it gets further into discovery and motion practice, at which point readers can expect more substantial coverage.

Many debates over the legality of various transactions in virtual worlds and MMO games come down to this question: is the currency really money? Most of the time, providers load their Terms of Service with language designed to distance in-world currency from real world currency. One company, however, appears to be taking a decidedly different approach. In Kwari, a new first-person shooter that is now in beta testing, real money changes hands. In fact, the movement of money from one player to another is the whole point. So when somebody sneaks up behind you with a railgun and drops you like a sack of hammers, your real money becomes his real money, just like that.

The folks that run Kwari are straightforward about the fact that this is cash you’re playing for. And if their Ayn Rand-meets-Starship Troopers logo is not enough to convince you, they lay it all out on their site:

Every time you hit another player in Kwari you make money. Every time you are hit by another player it costs you. Every shot counts. How much is down to the stake level you play in. But this is not the only way to win.

Doing damage to yourself, breaking crates, use of certain map features or picking up additional weapons, pickups and health packs may have a fractional cost attached. This cost is transferred between a series of jackpots, prizes and awards available in the game, all of which can be won by any player, regardless of the skill or stake level of game they prefer to play.

At no point, however does Kwari take any of this money. 100% of the cash generated through playing the game goes back to the players in the form of prizes.

Wait. 100%? Well, 100% of the cash generated through playing the game. But you can’t exactly shoot people without bullets, can you? And bullets, my trigger-happy friend, are going to cost you real money too. Kwari says:

Think of us as your virtual arms dealer – we supply you with ammo (which works in all weapons) for a fixed cost. Depending on your style of play the amount of ammo you need will vary.

This whole system, obviously, is not going to appeal to everyone. It not only breaks the magic circle, it breaks it, then stands back firing cash-fueled rocket-propelled grenades at the pieces until there’s nothing but a magic smoking crater. Critics are already coming down fairly hard on Kwari following a post on Joystiq, though the game has some supporters too. Kwari’s developers address the more obvious issues regarding cheating, team play, and monitoring in advance in the Kwari FAQ and forums.

That discussion, and VB’s take on the legality of this whole thing, below.

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Plaintiff Eros has submitted a second motion for leave to serve subpoenas (.pdf) in its copyright and trademark infringement case against a defendant currently identified as the Second Life avatar “Volkov Catteneo” for the alleged misuse of intellectual property associated with Eros’ sexual animation software and in-world products.

If the motion is granted, subpoenas will issue to AT&T and Charter Communications seeking identifying information based on IP address records which were apparently obtained in response to previous subpoenas issued to Linden Lab and PayPal. The information sought in these subpoenas includes the user’s name, address, and payment information, as well as Media Access Control (MAC) and Ethernet Hardware Address (EHA) numbers.

From the motion:

In connection with its ongoing investigation into defendant’s identity, Eros has obtained information relating to defendant’s purported real name from various sources. Nevertheless, Eros is not yet certain whether this information is correct, especially in light of defendant’s comments [to Reuters, that he had no permanent address and had provided false information to Linden Lab].

[September 6, 2007 Update: The motion was granted. Subpoenas will issue to AT&T and Charter Communications.]