This is interesting stuff. Judge Alex Kozinski of the 9th Circuit Court of Appeals talks, fairly off-handedly, about issues involving virtual worlds. What’s troublesome to me is that Judge Kozinski has a reputation for being a tech-savvy judge, but he’s clearly got very little clue about virtual worlds. Still, I have to say I’m impressed by the fact that he’s apparently engaged in RMT on behalf of his kids, without having any clear conception of what it was he was buying or selling.

Transcript of the most relevant bits, between SCU law prof Eric Goldman and Judge Kozinski:

“ERIC GOLDMAN: When I read the opinion, it really struck me that there were some other situations where this argument that intangible assets can be converted could be applied. By the way, just to be clear, there are plenty of places where we have a law that specifically governs the, quote, conversion of intangible assets. For instance, we have copyright law that protects against the use of copyrighted works. Or we have trade secret misappropriation law, which protects against the misappropriation of trade secrets. But we’re talking now about the law of conversion as a separate legal doctrine and its application to intangible assets. I thought about something like frequent flyer miles. Could those be converted? Are those different from a domain name? Or if the airline was to make a mistake in its record-keeping so that it bumped down the number of frequent flyers that a person had, would that be a conversion? I was having a tough time distinguishing that circumstance from the kind of circumstance that was presented in this case.

JUDGE ALEX KOZINSKI: Well, you said conversion. Just to make a mistake, it might not meet all the requirements of conversion. I don’t know off the top of my head what all the requirements for conversion are. But let’s say, for example, the company president decides to fly to Europe with his family. And so he taps into my account and says, you know, I don’t have enough miles myself. But if I sort of tap into various customer’s accounts, I take a few miles here, a few miles here, I can accumulate enough miles for me and my family to fly to Europe. I’m hypothesizing because it’s preposterous, but just imagine.

Then I think that that probably would be conversion. I mean, it would have been a willful act. It would have been designed to sort of steal the miles. The fact that the miles are nothing but intangibles, it just doesn’t — They’re not widgets; they’re not things that you can actually bring into court under replevin and hand them over to the plaintiff, right? I guess what you have to show, it seems to me, if you want to say an analogy doesn’t work– And sometimes an analogy loses force when you move from the physical world to the intangible world. It loses some material thing that makes that kind of conversion difficult or questionable. But in this case I haven’t seen any reason why it shouldn’t be applied directly.

ERIC GOLDMAN: One of the other places it comes up that I deal with is in the area of what I’ll call virtual worlds. I don’t know if you’re familiar with them or if you’ve dealt with them. These can be things like online games where people are interacting with each other, and they might be building characters in that game. They might be building assets within that game, things like weapons if they’re in a war simulation, or they might be building things — Like in a game like Second Life, they might be building virtual property, locations in that space or chattel within that space. It’s all electronic, but it has –

JUDGE ALEX KOZINSKI: I’ll give you a very good example. My son used to get on this game online and get points and sell them on eBay. I sold a bunch of his points on eBay, so this is — you get so many life points. I don’t even know what these points were. But people who bought them knew what they were. And the way it works is they buy them from you. And the deal is that you then make a date with someone in the game and the two characters meet. And then the selling character hands over to the buying character so many life points or so many wealth points or whatever. So what can be sold can surely be stolen. I don’t have any difficulty at all in saying, if you’re in a situation like that and you’re playing this game and you’ve got these sort of life points accumulated and then somebody comes along and steals them other than as permitted by the rules of the game — As you know, there are games where part of the game is protecting yourself from robbers and from being stolen, and it has certain life aspects to it. And if it’s within the rules of the game that you might get attacked by robbers and probably taken away from you, that’s the game. But if somebody circumvents the rules of the game and somehow you log in one day and instead of having 150,000 points, all of a sudden you only have 50 points because somebody has taken those points away, well, those are points I can sell on eBay. I can turn into US dollars, or at least PayPal, which is even better in some ways.”

No specific opinion on this from me. I just thought it was interesting. He’s very matter-of-fact in how he views RMT.

Thanks to Greg Lastowka, assistant law prof at Rutgers, for the link and pointing out the interesting part.