Acquisition of ownership inside virtual worlds* 

Wian Erlank
BA Hons (Classical Literature), LLB, LLM (International Trade Law), LLD (Stell)
Senior Lecturer in Law, North-West University (Potchefstroom Campus) 
OPSOMMING
Verkryging van Eiendomsreg in Virtuele Wêrelde
Die artikel het ten doel om as kort inleiding te dien tot die manier waarop eiendom binne in ’n virtuele wêreld verkry kan word. Die Suid-Afrikaanse sakereg word as agtergrond gebruik om die nuwe veld van virtuele goederereg te bespreek en binne in die konteks van die reg in die regte wêreld te plaas. Ondersoek word ingestel om te bepaal of daar ooreenkomste is tussen die oordrag van eiendom in die regte en die virtuele wêrelde. In sommige gevalle blyk dit te wees dat eiendomsregte afgelei word deur middel van standaard kontraktuele bedinge wat deur die ontwikkelaar van ’n virtuele wêreld bepaal word. Soms is hierdie bloot gebruiksregte, maar in ander gevalle, en spesifiek binne-in virtuele wêrelde wat die regte wêreld simuleer, kan gebruikers eienaarskap verkry van hul virtuele goedere. Vanuit die voorbeelde is dit duidelik dat daar sterk ooreenkomste tussen eiendom in die regte en virtuele wêrelde is. Eiendom kan onder andere deur beide oorspronklike sowel as afgeleide wyses verkry kan word in die virtuele wêreld en eiendomsreg in ’n virtuele item kan onder andere gesedeer, verkoop of ge-erf word of selfs verlore gaan in ’n insolvente boedel. 
1 Introduction
The field of virtual property1 is still one that not many people are aware of.2 Even if they have heard about it, their concept of it is often

*1 Paper presented at the International Property Law Conference 2010 hosted by the University of South Africa and held on 2010-10-27–29 in Pretoria.
1	For a concise introduction to the concept of virtual property see Erlank “Lecture: introduction to virtual property” 2009 SSRN available at http:// ssrn.com/abstract=1491118 (accessed 2010-10-10); Erlank “Introducing property in virtual worlds” 2012 Social Sciences Research Network (SSRN) available at http://ssrn.com/abstract=2241030 (accessed 2012-10-31). See in general Fairfield “Virtual property” 2005 Boston U LR 1047 1102; Blazer “The five indicia of virtual property” 2006 Pierce LR 137 161; Deenihan “Leave those Orcs alone: property rights in virtual worlds” 2008 SSRN available at http://ssrn.com/abstract=1113402 (accessed 2009-05-22) 1 51; Lastowka & Hunter “The laws of the virtual worlds” 2004 Calif LR 1 74. For a more exhaustive discussion of how property inside virtual world functions in the real world legal system, see Erlank Property in virtual worlds (LLD dissertation 2012 Stell) available at http://ssrn.com/abstract=2216481 (accessed 2012-10-31).
2	This article is intended to be an exploratory and introductory article to the fields of virtual law, virtual property and virtual worlds. It is the first of a number of forthcoming articles dealing with both law and property regarding and inside of virtual worlds. 770
unformed, imprecise and mostly out-dated.3 While virtual property includes well known intangibles like domain names and email addresses,4 it also refers to property that only exists inside virtual worlds.5 This type of virtual property is a common feature of modern multiplayer internet based virtual worlds. The virtual property found in virtual worlds is usually created from computer code that is implemented to fulfil the same function in the virtual world as it would in the real world. For example, a virtual chair would be used to seat a virtual person.
For the purpose of this article, the term virtual property will be used to refer to the objects of virtual property as found inside a virtual world.These objects are the items that players encounter and use by means of interaction between themselves, their avatars and the virtual world. One category of the objects of virtual property would refer to things, or rather movable (in)tangible virtual items. Other categories include (amongst others) virtual immovable property or things like houses, castles and land. In certain virtual worlds there are even slaves that are
3	This is possibly due to the changing understanding of the virtual property concept and the constant development of the virtual world phenomenon.
4	See Van Erp “Servitudes: the borderline between contract and (virtual) property” in Towards a unified system of land burdens (eds Van Erp & Akkermans ) (2006) 4; Fairfield 2005 Boston U LR 1047 1049 1055.
5	Fairfield 2005 Boston U LR 1047 1058 1064; Lastowka & Hunter 2004 Calif LR 1 29.

deemed to be the property of the player.13 Even more challenging from a real world property perspective, is the fact that a player’s avatar could also be defined as an object of a property right.
Although there are various levels in which one can perceive virtual property, the focus in this article will be on the intra-virtual world level. In other words, the cross-border transactions that occur between the real and virtual worlds will be ignored. This article will specifically not deal with the player’s virtual world account as an object of virtual property. Acquisition of ownership inside the boundaries of the virtual world will be illustrated by a number of virtual world examples. Because of these exclusions, a number of assumptions will be necessary. These assumptions are that a player can have possession of a thing in a virtual world and that the concept of ownership is also taken for granted inside the virtual world.
12	worlds, see the online marketplace in Second Life Linden Lab “Second Life marketplace” 2011 Second Life Marketplace available at https:// marketplace.secondlife.com (accessed 2011-10-10).
13	For example Second Life contains an area called Calana Mount where players can (amongst the usual available occupations) act as slaves or slavers: Hsu “Virtual world, real college class” 2008 Las Vegas Sun at http:// www.lasvegassun.com/news/2008/apr/07/virtual-world-real-college-class/ (accessed 2011-10-10). There are also players participating as willing sexslaves for other player’s in Second Life: Wagner “Sex in Second Life” 2007 InformationWeek at http://www.informationweek.com/news/199701944 (accessed 2011-10-10).
The aim of this paper is to take an introductory look at acquisition of ownership inside a virtual world. A brief summary of the methods of acquisition of property in South African property law will provide the background against which to discuss the new field of virtual property and give it some real world context. In most instances ownership will be derived from the terms of a contract, where a developer gives a user a right to use or own an object of virtual property.17 Sometimes this is just a right of use, but at other times, and specifically in virtual worlds that emulate the real-world, users are able to acquire ownership in these items. There are also a number of other methods of acquisition that closely resemble those found in the real world. Ownership in a virtual
17 The issue of the allocation and regulation of virtual property rights falls outside the scope of this article. For a discussion about the intellectual property and real world contractual implications of property in virtual worlds see Fairfield 2005 Boston U LR 1047 1049; Deenihan 9; Adrian “Intellectual property or intangible chattel?” 2006 J Int Comm Law & Tech 52 61. See in general: Chheda “Intellectual property implications in a virtual reality environment” 2005 The John Marshall R IP Law 483 508; Dibbell “Owned! Intellectual property in the age of dupers, gold farmers, eBayers, and other enemies of the virtual state” 2003 available at http:// www.nyls.edu/docs/dibbell.pdf (accessed 2008-03-12); Eriksson & Grill “Who owns my avatar? – Rights in virtual property” 2005 Proceedings of DiGRA 2005 Conference: Changing Views – Worlds in Play available at http:// www.digra.org/dl/db/06276.23429.pdf (accessed 2009-10-02); Kunze “Regulating virtual worlds optimally: the model end user license agreement” 2008 North Western J Tech & IP 101 118; Miller “Determining ownership in virtual worlds: copyright and licence agreements” 22 Rev Litig 435 471; Reuveni “On virtual worlds: copyright and contract law at the dawn of the virtual age” 2007 Indiana LR 261 308; Westbrook “Owned: finding a place for virtual world property rights” 2006 Michigan State LR 779 812.
item can be ceded, sold, inherited or lost in an insolvent estate.21 It can even be acquired in an original form. 
The relevance of this field of property law becomes apparent when one realises that virtual property ownership has far-reaching consequences from both an economic and social viewpoint. Because of this importance of virtual property from an economic perspective, it follows that whoever has ownership of these virtual assets are able to exert control over and derive financial interest from them. Due to this fact, knowledge of how ownership in virtual property can be acquired and what the corresponding rights should be, quickly become relevant to the practice of the law of property.
2 Acquisition of Real World Property
Before investigating the ways in which virtual property is most often acquired, it would be good to take a brief look at the ways in which one is able to obtain ownership of things in South African private law. This
21 For a discussion about the problems associated with ownership of digital information and virtual property after someone’s death see: Miller “Virtual inheritance” 2008 Economics of Virtual Worlds available at http:// economicsofvirtualworlds.blogspot.com/2008/09/virtual-inheritance.html
(accessed 2011-10-20); Cha “After death, a struggle for their digital memories” 2005 Washingtonpost.com available at http://www. washingtonpost.com/wp-dyn/articles/A58836-2005Feb2.html (accessed 2011-10-19); Staff Writer “Digital privacy after death – What will happen to your online profile when you're gone?” lifeinsurancefinder.com.au available at http://www.lifeinsurancefinder.com.au/infographics/what-happens-onlinewhen-you-die/ (accessed 2011-10-19).
will provide a real world frame of reference when discussing acquisition of ownership inside a virtual world. In the real world, acquisition of ownership is usually divided into two broad categories, being either original or derivative. The main difference between the two relate to the question of whether the ownership is acquired independently or in the alternative, derived from and dependent on the ownership of a predecessor. Hence, original acquisition of ownership is usually said to occur when there was no predecessor, and derivative acquisition takes place when ownership is derived from a predecessor. Original acquisition is the result of a unilateral act and a new right is created in respect of the property being acquired. Derivative acquisition on the other hand, follows after a bilateral transaction requiring the cooperation of the predecessor in title. 
Some of the more prominent examples of original acquisition of ownership (with similar counterparts in virtual worlds) are occupation; treasure trove; accession; specification; acquisition of fruits; expropriation; forfeiture to the state and appropriation of minerals. 
Examples of derivative acquisition of ownership (with similar counterparts in the virtual worlds) are delivery (in the case of movables) and registration in the case of immovables.
3 Acquisition of Virtual Property
3 1 Introduction
In a virtual world there is no meaningful distinction between software and law. What the software does not allow, is impossible. This leads to an area of law in virtual worlds where “there is no room for mediationbecause any ‘legal’ mediation embodied in the software immediately becomes part of the ‘natural’ world.” This means that a player’s property rights are guaranteed by the programming. As the “owner” of a virtual sword, an avatar is guaranteed that the rights that he or she has in the sword would be protected and enforced against any other player by means of the game-code. While the player “owns” the sword, no other player can interfere with his right, or even make use of the sword. However, as in real life, no property rights are totally absolute or totally exclusionary in a virtual world. A player’s property rights will be guaranteed to be protected only insofar as the software allows for it.For example, in the virtual world Ultima Online, one of the features is that players are enabled by the software and game-design to “steal” from one another. In other words in such virtual worlds the software explicitly makes allowances for the action of lawfully “stealing” the property of another player. 
3 2 The concept of virtual world ownership
The concept of “ownership” inside a virtual world is a problematic one and it is easier (and probably more correct) to describe players’ property rights towards the things that they “own” in virtual worlds as being possessory. The reason for this is that the concept of ownership is normally inferred from the factual question of possession. Because a player is not enabled by the game’s code to possess an item “belonging” to another player, the mere fact of possession equates to ownership inside the virtual world. In many virtual worlds property rights attach to a holder of an object for as long as the item is carried around by the avatar. As soon as the avatar drops the object, it constitutes abandonment and the item immediately becomes res derelictae. The next person to pick up the item will then become the new owner. The example mentioned here is a very simplistic use of the ownership concept in a virtual world and many worlds are far more sophisticated in their approach to the ownership concept as well as in the implementation of it via code. This is due to the pressure on developers to implement more detailed code-based property rules and not only a simple “possession-is-all-rule”. An example of a more complex codebased property system may be found in the area of virtual homeownership. The default rule in virtual worlds is that all players have access to all areas at all times. The next more developed rule is to allow only the owner of a house into his virtual home, which is counterintuitive if a home-owner wishes to invite guests without giving them a full run of the house. To solve this dilemma, developers have created a nuanced system of levels of exclusionary capacity that they build into the code-based property system. Grimmelmann refers to this as a “virtual fee simple” with a new estate carved out called the “right to visit”. This so-called “right of visit” is perpetual, non-transferable and subject to revocation by the owner of the house at any stage. 
This right to visit has a measurable effect on the ability of both owner and visitor to interact with their own property as well as the property of others. In the example above about ownership being lost by the dropping of an item, the rules of the acquisition of the object in question was clear. However, if one was to integrate that example into the context of a virtual home in a virtual world, a number of problems arise. One such problem (and a main reason why players would wish to own a virtual home), would be to have a secure environment where they could store their collected virtual items without losing their property rights in it. Apart from this, homeowners would also like to have guests over for functionsand other social visits. However, what would the consequences be of inviting visitors to a player’s house? Would an item dropped by a guest become the property of the homeowner, or would any guest that picks up or uses an item in the house become the new owner of that item? It is clear that in this case the general rule of possession equating virtual ownership is not satisfactory. In order to solve this problem, the nuanced system of exclusion mentioned above incorporates a number of new options. A homeowner is able to choose between certain categories of access that he or she wishes to assign to a visitor. Depending on the category that a homeowner assigns to a visitor, that visitor will not only be able to access certain areas of the home, but the visitor’s interaction with the items in the home will also be defined. For example, one visitor might have access to enter the house, but not to pick anything up, while another visitor might be given certain permissions to be able to carry off any items in the home.
3 3 Original Acquisition Inside Virtual Worlds
From the discussion above it is clear that the most important form of acquisition of virtual property is derived from having possession of a virtual thing. How then does a player acquire possession and/or ownership of an object of virtual property? As mentioned above, the methods of acquisition would usually depend on the allowances made for transfer and possession by the code and by extension the laws of the virtual world itself. Similarly to the real world, original acquisition is usually achieved by means of occupation of property (occupatio). In the virtual world occupation of property frequently happens by means of capture of wild animals or monsters.
In most virtual worlds the best way to increase one’s virtual patrimony is by occupation, or as it is commonly referred to in virtual worlds, as “the taking of wild monsters”.53 The capture and killing of wild animals or monsters inside virtual worlds often represent the best way of acquiring treasure or “loot”. Although it is legally significant to be the player who slays a monster, the possession of the monster’s corpse is only of legal significance for a short time because it is not the monster’s corpse that is important, but rather the perceived value of the objects that these monsters drop when they are killed. Grimmelman notes that 
[i]n the large crop of quasi-medieval games, with their strongly fantastic overtones, the capture of wild animals is nothing less than the principal source of wealth. The single most profitable ‘industry’ is hunting monsters and looting their corpses.
In the case of capture and killing of the monsters, the property rules contained in the game-code are highly worked out, but do not provide for all the available circumstances that presents itself in the game. For example, a game like EverQuest automatically awards experience points to the player who kills a monster. If a group of players work together to slay a monster, the experience points are distributed by the game amongst the players, usually in proportion to their contribution to the killing. However, the loot that the monster drops when killed is not automatically assigned to any specific players and becomes res nullius as soon as it is dropped. The first player to pick up the treasure then becomes the owner of it. Although the game-code would seem to create certainty as to the ownership of the picked-up treasure, the player community has developed a set a normatively binding rules relating to who is allowed the pick up the treasure. Players will often deviate from the code-based rules to follow rules based on their own social understandings.
Apart from the capture and killing of wild beasts as a method of obtaining virtual property, certain other interesting methods are available to the player. Mining and farming are given as examples of how things are taken raw out of “nature” and then transferred into useful and saleable things. Take this account of one player’s labours for example:
In addition to the four hours of clicking, Stolle had had to come up with the money for the deed. To get the money, he had to sell his old house. To get that house in the first place, he had to spend hours crafting virtual swords and plate mail to sell to a steady clientele of about three dozen fellow players. To attract and keep that clientele, he had to bring Nils Hansen's blacksmithing skills up to Grandmaster. To reach that level, Stolle spent six months doing nothing but smithing: He clicked on hillsides to mine ore, headed to a forge to click the ore into ingots, clicked again to turn the ingots into weapons and armor, and then headed back to the hills to start all over again, each time raising Nils' skill level some tiny fraction of a percentage point, inching him closer to the distant goal of 100 points and the illustrious title of Grandmaster Blacksmith.
Certain games also provide mechanisms for combining already existing things into new things (accession), and others have mechanisms for creating new things from a code level. Apart from ownership of the virtual thing, in such a case the creator is sometimes given intellectual property rights in the newly created thing. This is such a prominent aspect of the virtual world Second Life, that there is even an intellectual property office in Second Life.
3 4 Derivative Acquisition Inside Virtual Worlds
Apart from being able to pick up or take an item that is lying around as res derelictae, there is a thriving economy that operates inside most virtual worlds. Players can make use of auction houses, bazaars and other in-game trading facilities like shops, taverns and town commons to transfer property – and consequently ownership. The benefit of using the in-game provided mechanisms for transferring property is that the code usually provides a secure transaction facility. The property is kept by the game-code and only transferred to the buyer as and when funds are transferred. An example of this is found in the World of Warcraft game-guide:
Select a character, and then right-click on its portrait/name. You can also do this for player portraits. This will launch the trade screen with another player. Place your items in the top portion of the screen. Once you are satisfied with the other player's trade, hit “Trade” button. To trade money, open up your backpack and hold down shift while clicking on the money amount. You can then select the amount of money and drag it over to the trade window. You can also drag an item or money from your bags and drop it on another player to initiate a trade window. Make sure the other player gives the correct type of coin in the trade. When you have a trade window open, you can right-click an item to move it to the trade window.
Similar to the real world, immovable property such as houses and virtual land are also tradable in virtual worlds and ownership of virtual real estate frequently changes hands. Most virtual worlds that provide for individual ownership of virtual immovable property also provide some type of registration system that emulates a real world deeds registry.Take for example this extract from the Dark Age of Camelot Manual:
Please note that only Personal Homes can be sold, not Guild homes. Should you decide to sell your home to a fellow player, there are a few steps to follow. The first thing you need to do is to get the title to your home. You can purchase the house title to your home in the housing market area from the deed NPC. Once you have the house title, it works just like any other item transaction. Hand the house title to the player you wish to sell it to, decide on the price, and then both of you hit accept. You can only sell a house to someone who doesn't already own a home. Once you have the house title, it works just like any other item transaction. You must stand on the lot where the house is [, t]hen hand the house title to the player you wish to sell it to[.] Decide on the price[, t]hen both of you hit accept[.] Please note: you can only sell a house to someone who doesn't already own a home.
The example above mentions that the house title is transferred from player to player. This might look like a normal “physical” transfer of a document, but it must be noted that the game-code arbitrates the transaction and immediately records the details of the transaction as well as that of the new owner in a central database. Therefore, it would seem as if derivative acquisition of property occurs in much the same way in the virtual world as in the real one.
4 Conclusion
In this paper I discussed a number of ways in which ownership of virtual property can be acquired inside of a virtual world and illustrated these with a number of examples from virtual worlds. In order to understand the procedure of acquisition of virtual property I briefly discussed how virtual world property based systems operate when they deal with the concept of ownership. The purpose of the paper was to take a brief exploratory look at virtual world acquisition of ownership. This was done against the background of South African property law. It is clear that there are similarities between acquisition of ownership in the real world and that of acquisition inside of a virtual world. Even from the limited examples discussed above it has transpired that one can obtain ownership of property inside of a virtual world via either original or derivative means. The most prominent method of obtaining original acquisition of virtual property is by occupation of a thing that is res nullius, while the most prominent method of obtaining derivate acquisition is through transfer of ownership by means of delivery.