Chris Bennett Discusses Virtual Assets in Business in Vancouver Article

Published: Friday, 8 February 2008

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Business in Vancouver February 5-11, 2008; issue 954 | Andrew Petrozzi

Courts wrestle with virtual assets

The status of virtual assets acquired in online video games remains a virtual unknown to Canadian courts – but the increasingly popular form of gaming could soon force judges to reconsider what defines an asset.

With Vancouver serving as home to the lion’s share of Canada’s video game development industry, it is a question that could fundamentally impact the wording of user agreements that local developers of massive multiplayer online role-playing games (MMORG) could implement.

In one of the first public cases of its kind, a 2005 divorce case involving a Chinese couple centred on the possession of joint online game accounts, according to the Chongqing Business Post. The report indicated that the husband wanted to keep the game accounts and virtual items and give his wife the couple’s shared apartment. His wife, on the other hand, was reported to want to split the apartment and the game items equally.

According to Chris Bennett, a partner with Davis LLP who specializes in intellectual property law, video games and interactive entertainment law, the legal status of virtual assets has not yet been directly dealt with by Canadian courts in the context of an online game.

He believes courts would deal with virtual assets in much the same way as they currently deal with tangible family assets.

“The test is whether this is a family asset, and normally the question there, is: Was it normally used for a family purpose?” he said. “The other part of the test that probably would apply is if one spouse spent a bunch of time developing virtual assets during the marriage, and the other spouse facilitated that by taking care of the household and the kids.”

Most online games, excluding Second Life, have specific online terms and conditions that indicate any items acquired in the game, are the property of the game company and not the user. But, added Bennett, there is a pretty good argument that someone using family money to conduct transactions to improve a character or buy virtual items, generates a valued asset even if the game company says it is not. “If it’s an asset that has value, and if it was created in the course of a marriage, it should be split.”

Examples are becoming more frequent in Asian countries such as China, Japan and South Korea.

“I think there is precedent around the world for virtual property in games to be considered something that is tangible and valuable and something you can sue for. And game companies are going to try and protect themselves with contracts,” said Bennett.

“But when this comes up in Canadian courts, it is going to look at this like any other asset and apply typically Canadian laws to it. The laws are not going to be specific to virtual property.”

apetrozzi@biv.com