Virtual property is goods and currency purchased and used over the Internet that does not have a tangible form. That means you can't physically hold it. For example, you can hold a DVD in your hands, so if you purchase it the DVD is your tangible property. However if you purchase a movie and download it to a device, whatever rights you have to that movie is virtual. It is not tangible because you cannot hold it in your hands.
Most sellers of virtual property, like downloaded songs and software, will argue that you actually purchased a license to use the virtual property. If this is the case, it is likely that the right to use it cannot be transferred or sold to someone else. On the other hand, if you bought a physical DVD or program disc you could legally sell that physical property on the second hand market. However there are some exceptions to this definition of virtual property. Some courts, both in the U.S. and abroad, say they can have attributes of personal property.
In Bragg v. Linden Research, Inc., "Bragg contends that Defendants, the operators of the virtual world, unlawfully confiscated his virtual property and denied him access to their virtual world." The Criminal Division of the Supreme Court of the Netherlands held that virtual goods are personal property under Dutch law. An appellate court in Canada held that virtual property like domain names are property and subject to criminal penalties for theft if stolen.
Both sellers and purchasers of virtual property need to clearly understand what is involved in the transaction. The terms of service of the website should clearly state whether the virtual goods are being licensed or purchased. They should also establish what happens to the virtual goods if the account is ever terminated by either party. Terms of changing services, refunds, and transferring virtual property to others should also be laid out. Business that fail to do all this are likely to face legal trouble eventually.
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All information on this website is for informational purposes only and is not legal advice. Ninomiya Law, PLLC and Kent Ninomiya only provide legal advice to clients when there is a valid engagement agreement signed by both attorney and clients. The principal office of Ninomiya Law, PLLC is located in Round Rock, Texas. Ninomiya Law, PLLC is responsible for the content of this website.