Virtual rule of law

• 3. Virtual rule of law

Michael Risch*

• 1. INTRODUCTION

The rule of law generally requires that governments announce and follow the laws of land. This allows citizens to know what to expect from their government and to make investments accordingly. Entrepreneurs want to know what activities are legal, whether the government can interfere in business, whether agreements are enforceable, and whether harmful actions by others will be stopped.

For this reason, many consider the rule of law a catalyst for economic development, and there is reason to believe that it will be equally important in virtual economies, despite their differences with the real world. As more people turn to virtual worlds for both fun and livelihood, the rule of law will become prominent in encouraging investments in virtual business.1 2

This chapter considers whether virtual worlds provide a rule of law that sets expectations for virtual life. It is not surprising that—for the most part—they do not; virtual worlds currently lack many of the elements of the rule of law. Which aspects fail is more surprising, however. Provider agreements and computer software, the sources of regulation that are most often criticized as “antiuser,” provide the best theoretical hope for achieving the rule of law, even if they currently fail in practice. On the contrary, widely proposed “reforms,” such as community norms, self-regulation, and importation of real world law, face both theoretical and practical barriers to implementation of the rule of law in virtual worlds.

These conclusions follow from a four-step analysis. Section 2 is a brief introduction to virtual worlds. Virtual worlds allow their users nearly unlimited choices in their actions and interactions with other users and the virtual environment. As a result, business and social interactions permeate virtual worlds just as they do elsewhere. If a user can deliver something of value, other users will trade something else of value (including real money) for it.

Section 3 introduces the rule of law and its importance. However, the analysis does not attempt to determine just how important the rule of law might be; virtual worlds are not conducive to such normative determinations. Instead, this part examines the literature and abstracts a generalized positivist test of ten rule of law indicia. Rule by law must be: (1) nonarbitrary, (2) stable, (3) public, (4) nondiscretionary, (5) comprehensible, (6) prospective, (7) attainable, (8) consistently enforced, (9) impartially applied, and (10) adjudicated in a factually neutral way.

These indicia, however, do not include traditional notions of “liberal” rule of law, including democracy and personal rights. Just as normative measurements of the rule of law’s impact on virtual business are unhelpful, so too is an examination of liberal ideals in the context of virtual worlds. Technical limitations and user preferences render notions such as democracy and legitimacy difficult to apply in virtual worlds. Furthermore, to the extent that setting expectations is the most important feature with respect to business, liberal values are less important. Thus, the analysis is descriptive and formalistic, such that providers and users can objectively determine whether the rule of law is present in a world and make decisions based on such determinations.

Section 4 examines law and sovereignty in virtual worlds. The four primary sources of law follow from general cyberlaw principles developed by Professor Lessig and others. Law is a constraint on behavior, and such constraints are imposed by four sources: the market (such as provider agreements), code (the virtual world software), norms (community defined rules), and real-world law (legislation and case law). Three potential sovereigns impose this law: real government, the virtual-world provider, and the virtual community. Further, the law is imposed on both the user and her online persona—her avatar.

While these dimensions imply that law may come in 24 different flavors, this part narrows the consideration down to a single question: “How does the law, from whatever source, affect the end user?” This analysis focuses on human, rather than avatar, wellbeing.

Section 5 draws upon the previous discussion to critically examine the rule of law in virtual worlds. The chapter argues that agreements and code offer the best possibilities for implementing the rule of law in virtual worlds, even though they currently fall short. Provider agreements and code can exhibit all of the indicia of the rule of law. They can be nonarbi-trary, stable, and public. However, these sources often fail in practice. Agreements are not consistently enforced, and amendments might be arbitrary or retroactive. Code, on the other hand, is perfectly enforced but is frequently hidden and potentially arbitrary and unstable.

Other sources, such as norms and real-world laws, are unlikely to provide the rule of law in virtual worlds either in theory or in practice. Community norms are often unwritten, unspoken, and partial. The very nature of community enforcement is based on vigilan-tism, the antithesis of rule by law. The application of real-world rules is also unlikely to fulfill the indicia, especially in the short run. The nonphysical nature of virtual conduct, as well as game rules that allow activity that would certainly be disallowed if perpetrated among humans, means that determining which laws should apply is impossible. Many have suggested looking to sports rules for the answer, but the analogy is too attenuated to provide hope that the rule of law will be present in theory or in practice.

Based on the general finding that the rule of law is currently absent but theoretically achievable in virtual worlds, the chapter concludes with some suggestions about how the rule of law might be enhanced. The suggestions focus on some of the key shortcomings that might practically be changed, such as neutral factfinding, more detailed in-game rules with finely tuned penalties, and contract enforcement by users. It may be, however, that time may best improve the rule of law. As more disputes are resolved, a body of law will grow that can apply more faithfully to conduct in virtual worlds.

• 2. VIRTUAL WORLDS

For the uninitiated, a virtual world is an interactive computer software program running on a central server (in modern times, over the internet). Many human users control characters—called “avatars”—in the game software from any computer attached to the network. Participating in a virtual world is like playing a video game, except that the other characters are also humans who control their own avatars.3 A more recent version of such worlds is “augmented” reality worlds, in which computer-generated elements overlay real ones.

Virtual worlds allow avatars to do a range of things: walk, fly, build virtual buildings on virtual real estate, and otherwise interact. Figure 3.1 shows several avatars enjoying a live concert played by another avatar in the virtual world Second Life.4 Second Life's software allows users to transmit live or prerecorded performances to the virtual world, which are then broadcast to other avatars in the same virtual location. And children

Figure 3.1 Virtual concert in Second Life

everywhere play Minecraft, a pixelated world where a primary goal is to build and destroy structures.

Many worlds have some form of virtual money. Many allow avatars to obtain virtual property and to transfer that property to others. Many also incorporate varying levels of social status, especially worlds that involve combat with computer-controlled enemies; the more enemies killed the higher the “level” an avatar might achieve. Rarer property and higher levels are valuable to those who do not want to spend their own time appropriating them.

Virtual worlds are home to serious business.5 One study suggests that virtual economies may reach the size of small countries.6 Businesses are varied, from mining virtual gold to real gambling and anything inbetween.7

As a brief example, the concert depicted in Figure 3.1 might include a few types of businesses. A concert promotion business might pay the virtual land owner for the right to use the space for a concert. A fledgling musician might pay the promotion company for the right to play a show—advertising for real-world music. Conversely, the promotion company might pay an established musician to play in the venue, so that the patrons might pay for the right to listen to the music. All of these payments are made using either real money or virtual money (which can be exchanged for real money or other items of value).

• 3. THE RULE OF LAW AND VIRTUAL ECONOMIES

  • 3.1 The Tie between Law and Virtual Business

It is relatively well settled that economies thrive under the rule of law.8 Some commentators go further, arguing that economies will fail without the rule of law.9 Regardless of how strong the tie may actually be, governments throughout the world favor the rule of law as a harbinger of economic stability.10

Virtual economies are no different in theory, and the rule of law will become more important as virtual commerce expands.11 When planning business investments, every entrepreneur will ask questions: Can I operate this business now? Will I be able to do so in the future? What are the penalties if I break a rule? Will the rules be enforced against others? How do I ensure that my customers follow the rules? Professor Post adds:

How many people are going to give their hard-earned money—real money!—to Chiaretta Charron [a virtual banker] without some assurance that she (or he, or it) will behave reasonably with it? How many people will extend credit to anyone else without some way to enforce the obligation? How many people will invest large amounts of time or effort or money in any substantial undertaking—building a law school, say, or organizing a recording studio—without some assurance that it won’t be destroyed by other participants in the “game,” or by the operators of the virtual world themselves, for “no good reason” at all.12

The presence (or absence) of the rule of law helps answer these questions.13

However, this chapter is unconcerned with just how important the rule of law might be in a given virtual economy, because there are so many to choose from. Virtual-world providers are free to establish the type of system they deem best. Providers have done so—there are hundreds of virtual worlds, ranging from free-for-all worlds targeted at fraud and fighting to tightly controlled worlds targeted at children.

Similarly, users are not burdened with any particular world by birth and may choose which virtual world to join, if at all. User wellbeing is determined in large part by individual happiness-maximizing choices in the market, of which only a small portion might relate to business income.14 Thus, users choose worlds based on their own perception of the rule of law, among other things.15 As a result, normative considerations about the level of rule of law have no place in this particular discussion, for four reasons.16

First, users might well prefer a lawless virtual society for many reasons, including the reckless abandon that comes with shedding real-world risks. These users should not be told that their choices are morally wrong or socially nonoptimal,17 nor should the virtual-world provider be criticized for offering lawless outlets.18

Second, in this market context, it is difficult if not impossible to normatively balance the needs of users and providers.19 One author, for example, argues that—for the good of the world—providers must have carte blanche to change game rules and code at any time, and with retroactive effect.20 This suggestion is contrary to the rule of law, but may be normatively superior for worlds that harbor the goals the author discusses, namely world evolution, user achievement, and exclusion of the real world.21

Further, while efficiency-maximizing economic analysis might yield normative answers about the entire market, such analysis is less helpful in assessing whether the rule of law in any particular world is normatively justified.22 Similarly, use of the rule of law to further moral rights is difficult in virtual worlds. For example, the formal rule of law described below might be present in authoritarian regimes where some rights are impinged.23 As discussed below, many—and perhaps most—virtual-world providers might be considered rights-limiting authoritarians.

However, stripping providers of the right or ability to act authoritatively in the name of moral rights might mean that certain worlds close or never even open. Whether user “rights” outweigh the moral good that comes from the ability to be users in the first place is an unanswerable question.

Third, a little lawlessness may be a preferable way to encourage innovation and improve wellbeing in virtual worlds. Schumpeter, for example, argued that innovation thrives with disruptive activities by entrepreneurs.24 Presumably, some lawlessness and breaking of pre-existing norms encourages Schumpeter’s “creative destruction.” For example, lawbreaking can create efficiencies and help identify unjust and inefficient rules.25 Further, use of others’ creative work can increase creativity as a whole.26 Because lawlessness may have a positive effect on entrepreneurship, categorical normative pronouncements about the rule of law would be incomplete.27

Fourth, in any event, there is no consensus about which aspects of the rule of law are normatively superior.28 In some societies, for example, preannounced rules may not be normatively superior.29

Therefore, this chapter focuses on the positive, rather than normative, aspects of the rule of law in virtual worlds.30 The question is not whether the rule of law should be implemented, but rather whether the rule of law is implemented. Armed with that information, providers, users, legislators, and judges can make their own choices.31

• 3.2 Defining the Rule of Law

There are innumerable ways to define the “rule of law.” Some formulations require more than others do, and some conflict with each other.32 Thus, defining the rule of law is the subject of many books. One commentator recently noted: “Read any set of chapters discussing the rule of law, and the concept emerges looking like the proverbial blind man’s elephant—a trunk to one person, a tail to another.”33

The analysis here begins with the trunk and the tail—two possible definitions of the rule of law: (1) government must follow the law, or (2) rules must be announced beforehand and applied nonarbitrarily.34

While one could argue for either of these two formulations, among others, this chapter opts for the latter, for two reasons. First, examination of rulemaking provides for a richer examination with respect to virtual worlds. Second, focus on rules arguably incorporates the requirement that the government follow those rules. Hayek describes the combination:

Stripped of all technicalities, [the rule of law] means that government in all its actions is bound by rules fixed and announced beforehand—rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one’s individual affairs on the basis of this knowledge.35

• 3.3 Indicators of the Rule of Law

Hayek’s combined definition is a blunt instrument; the most insignificant failure would technically negate the rule of law. Indeed, any sweeping definition is insufficient to fully consider the presence or absence of the rule of law.36

Fortunately, many have identified elements of the rule of law that might contribute to an analytical scalpel. Unfortunately, this chapter cannot examine every element, nor can it resolve every conflict between political philosophers about which elements are most important.

Thus, the chapter aggregates several points of view, treating a variety of considerations as indicators of legal rule. The analysis thus assumes that no single element is either necessary or sufficient to prove that law rules in a virtual world. Rather, the more indicators, the more a virtual world is governed by law.37 38 Multifactored analysis makes intuitive sense as well; many readers might be surprised by the absence of several factors in their own countries that were previously thought to follow the rule of law.

While there are theoretically dozens of indicators, the following ten provide a reasonable foundation for examining virtual worlds:

• (1) Nonarbitrary:31 Laws should not be arbitrary or contradictory.39 Methods of measuring arbitrariness will differ from person to person,40 but rules should usually be general rather than ad hoc.41 For example, bills of attainder directed at a single person or small group have no place in a sovereignty governed by the rule of law.

• (2)  Stable: Changes should be infrequent; frequent changes render laws arbitrary.42

• (3)  Public: The rules must be publicly available and, in modern times, written.43

• (4)  Nondiscretionary: Further, laws must be applied with minimal discretion.44

• (5)  Comprehensible: Regulations must be discernable and understandable.45

• (6)  Prospective: The sovereign must not punish an offense without a law proscribing that offense, and new laws should not be applied retroactively.46

• (7)  Attainable: The law must not require more than the affected parties have the power to accomplish.47

• (8)  Consistent Enforcement: Laws must be enforced regularly, accurately, and in accordance with their text.48

• (9)  Impartial Application: Regulations must be applied impartially, such that similar circumstances are treated similarly.49

• (10) Neutral Factfinding: A neutral arbiter of the truth should determine when the law has been broken. Some argue this indicator requires an independent judiciary,50 but the minimum is an independent and impartial factfinder.51

• 3.4 Liberty and the Rule of Law

Missing from the foregoing ten traditional indicators of the rule of law are several values52 that many have come to associate with the rule of law. The following are five concepts that this chapter does not consider part of the rule of law:53

• (1) Democracy: Dictators can—though they often do not—live by the rule of law;54 the Magna Carta shows that a nonelected sovereign can obey the law.55 Further, Madison’s “tyranny of the majority” implies that democracy does not equal rule of law.56 As de Tocqueville pointed out:

A majority taken collectively is only an individual, whose opinions, and frequently whose interests, are opposed to those of another individual, who is styled a minority. If it be admitted that a man possessing absolute power may misuse that power by wronging his adversaries, why should not a majority be liable to the same reproach?57

Finally, the definition of democracy itself is slippery. Federalist voting concepts such as the US Senate and the winner-take-all Electoral College might seem highly undemocratic to citizens of a parliamentary state. Parliamentary systems are undemocratic to those who desire direct democracy. If democracy is ambiguous, then laws emanating from a democracy might be considered arbitrary, but no one takes the view that the US is lawless for this reason.58

• (2)  Freedom: Rules that violate personal autonomy might still satisfy the rule of law.59 Of the rights guaranteed by the US Bill of Rights,60 most are about personal freedom,61 not about whether the sovereign preannounces and follows rules.62 A country could make, for example, a law allowing search warrants to issue upon any application by law enforcement.63 So long as all knew the law and the government undertook no search without an application, the rule of law would be satisfied despite the abandonment of probable cause.

• (3)  Legitimacy: That the lawmaker has the consent of the governed is helpful for enforcement and political stability,64 but the rule of law might persist without legitimacy.65 Further, the rule of law does not necessarily follow from the legitimacy of lawmakers. As Hayek notes: “The fact that someone has the full legal authority to act in the way he does gives no answer to the question whether the law gives him power to act arbitrarily or whether the law prescribes unequivocally how he has to act.”66

• (4)  N oncoerciveness: Even if everyone follows the law, the sovereign could—and, some would argue, should—still have coercive machinery.67

• (5) Happiness: Laws need not improve citizen welfare.68 Every country that purports to follow the rule of law has a variety of laws that might hinder the welfare of some part of the population.69

These five points fly in the face of a rule of law interpretation that incorporates a requirement of liberty.70 This is a modern and decidedly Western view of the rule of law.71 Many countries have varying levels of civil liberties, yet still govern by preannounced and impartially applied rules.72

This is not to say that the liberal rule of law is normatively bad; it is certainly morally good in most cases, including in virtual worlds.73 Take, for example, the termination of Peter Ludlow’s account because of his blog “newspaper” in The Sims Online. The newspaper reported the abuse of community norms, such as new users cheated out of their cyberproperty and purportedly underage users running cyberbrothels.74 Such reporting provided important information to users, and the authoritarian world provider did not want such information disseminated because it discouraged users from joining. From a rule of law perspective, a rule banning all newspapers might satisfy the rule of law despite the moral good associated with the press. However, to the extent that banning this particular user was arbitrary and not in accordance with existing rules,75 the action would violate the rule of law.

The newspaper example might imply that liberal rule of law should be a goal for virtual worlds.76 Nonetheless, applying liberal democratic principles to virtual worlds is infeasible for four reasons.

First, gameplay in the virtual world may not lend itself to freedoms.77 For example, many worlds are dedicated to player versus player combat, and concepts such as “citizen happiness” depend on who wins the battle. Also, the computer sees all—and indeed must do so in order for the software to work properly. As a result, guarantees that the provider (as sovereign) will not “search” a user’s virtual possessions are pointless.78

Second, requirements of democracy and legitimacy cannot apply because virtual worlds are democratic dictatorships.79 Providers are in power by fiat,80 because they invest in the hardware and software to build the world.81 They gain sovereign rights only by attracting subscribers who vote with their feet and their wallets.82 While providers may listen to input provided by their users,83 the laws providers impose are not, with few exceptions,84 put in place by majority vote or any other form of democratic representation.85 Further, users cannot revolt to depose the provider’s rule if they disagree with how they are regulated.86 Thus, subscribers choose to have their avatars be subject to dictatorial laws.87

Third, freedom is further limited because virtual lives and property are not portable.88 Once an avatar lives in a world, it cannot leave except by death.89 The democratic choice of a particular dictatorship is locked in, and the more time and effort one spends in a world, the more it hurts to vote for another world.90 While some have suggested mandatory portability of virtual possessions as a way to improve avatar rights,91 at present these complications make analysis of modern liberal ideals virtually impossible in this context.92

Fourth, to the extent that the rule of law fosters investment by setting expectations, liberal ideals are less important. So long as expectations are fixed, users can allocate time, attention, and investments appropriately. Of course, liberal governance may maximize total wealth as compared to nonliberal governance, but given the other limitations discussed previously, fixed expectations are the most that can be achieved.

• 4. DEFINING “LAW” IN RULE OF LAW

The two primary components of the rule of law—sovereigns and rules—take on new meaning in the context of virtual worlds. For example, just who is the sovereign? Is it the virtual-world provider or the real-world government? Both? What are the rules? Are they set by contract? Through user democracy? By real-world legislatures?

Answering these questions must precede consideration of the rule of law.93

• 4.1 Sources of Law and Sovereignty

As Professor Lessig and others have pointed out, four different forces regulate behavior in virtual worlds:94

• (1)  Market: The demand for services offered by and uses for each virtual world will affect what users can do in that world. Contracts thus define many of the rules that provide the basic framework for conduct in and relating to the virtual world.95 If consumers want a particular set of rules, they will flock to worlds that provide the preferred combination and away from worlds that do not.96 If providers attempt to change the rules, users may leave, or just threaten to do so.97 For example, with respect to the concert depicted in Figure 3.1, the Second Life terms of service do not forbid the playing of live music. However, if Linden Lab ever modified the agreement to ban live music, users might leave for another world.

• (2)  Architecture (Code): The ability for virtual world providers to control what avatars can and cannot do by fiat is a perfectly enforceable regulation.98 As Professor Lessig notes, “Code is law.”99 Code provides private parties with a previously unavailable coercive force.100 For example, Linden Lab may disable the software that allows for transmission of live music to the Second Life servers.

• (3)  Law: These are rules announced by and enforced by some sovereign with coercive power. Unlike code, enforcement may not be perfect. For example, copyright laws may forbid the public performance of someone else’s musical work in Second Life.

• (4)  Norms: These are rules, written and unwritten, followed by avatars in a particular community.101 Other users may or may not enforce the rules, and the sovereign may even enforce them.102 For example, gatherings with live music are unlikely events in worlds featuring player versus player combat.

Each of these sources of regulation can theoretically come from two sovereigns—the real and the virtual—both of which can effectively regulate behavior.103 Even though community is not really a sovereign, community-based enforcement of norms might constitute an additional source of regulation.

Of course, some types of regulation go together more naturally with a particular sovereign. It is unlikely that providers will pass any binding legislation, just as it is unlikely that the United States will write software code. However, overlap is not as farfetched as it may sound. A government could set, for example, default rules about required or banned contract terms and software functionality. Furthermore, a virtual world might enforce the laws of a government (for example, exacting in-world punishment for defamation).

Thus, there are potentially 12 sources of enforced rules in any given world: three sovereigns (including the community) multiplied by four sources. These enforced rules might have an effect on both real users and virtual avatars, bringing the total number of potential applications to 24.

Table 3.1 The dimensions of real / virtual law and real / virtual sovereignty

	Real sovereign	Virtual sovereign
Real law	Fraud	Penalty for defamation
Virtual law	Breach of contract	Penalty for rule violation

• 4.2 Simplifying the Analysis

Despite apparent complexity, these 24 combinations can be simplified in two steps. First, they can be categorized in two dimensions. Second, the two dimensions can be collapsed into one test.

• 4.2.1  Two dimensions

The combination of sovereigns and sources might be expressed as two dimensions: Real/ Virtual Law and Real/Virtual Sovereignty. Table 3.1 illustrates how these two dimensions work to create four possible applications of the rule of law. Each sovereign has the potential ability to enforce each type of law:

The case of a Japanese Maple Story virtual-world user illustrates these dimensions.104 Distraught about the “divorce” of her and her virtual spouse’s avatars, she decided to exact revenge by logging into the virtual world using her virtual spouse’s username and password and deleting the spouse’s account.

The deletion of the avatar potentially falls under all four combinations.105 First, the deleted avatar ceased to exist in-game, and thus a virtual murder was committed in the virtual world, even if no human was injured. Second, assuming that such virtual murder violates the provider agreement, a real sovereign might enforce virtual law in a breach of contract suit. Third, the unauthorized account access and destruction of (presumably) valuable electronic assets violates a real law enforced by the real sovereign. Fourth, to the extent that the provider agreement bars unauthorized account access, then the virtual sovereign would be enforcing real law.

There are subtle differences between the second and fourth combinations. In the second (virtual murder enforced in real courts), the “law” that is broken is in-game—the virtual murder. In the fourth (real tampering enforced by the virtual sovereign), the “law” that is broken is outside the game; further, even though the provider might need to sue for breach of contract in a real court, in this abstraction the real-world law is still being imposed by the virtual sovereign rather than by a real-world government.

• 4.2.2  Collapsing the dimensions

It is tempting to consider each of the 24 or even four possible permutations with respect to the rule of law, but, in the end, such complexity is neither warranted nor fruitful. Because the law applies to individual entities, it should be examined from the standpoint of individual entities. For example, when considering the rule of law in America, we consider the effect of state and federal law together, even though laws of one jurisdiction are often enforced in the courts of the other, and even if the laws might conflict. What matters is the cumulative effect of the law on its subjects.

Thus, this chapter considers a projection, to continue the geometric metaphor, of multiple dimensions into one question: “What constraints are imposed on real people in their activities relating to virtual worlds?” These constraints are surely overlapping, such that questions of conflict and preemption must be considered to determine which regulations will govern the user.106

A focus on the user is consistent with the effect of the rule of law, or lack thereof, on digital entrepreneurship.107 Humans are a better focus than avatars for three reasons. First, humans, not avatars, make decisions based on rules.108 Even automated decision processes must be initially programmed by humans. As a result, humans direct much of the debate and political deliberation about virtual worlds both inside and outside the virtual world. Inside the world, avatars perform protests, while outside they complain to customer service (and threaten to take their business elsewhere).109 The observation that most of the “democratic” discussion about what users want in their virtual world occurs in the real world reinforces a human focus.110

Second, human wellbeing is more important than virtual wellbeing,111 though perhaps some might disagree.112 As a society, we care about what happens to people, not what happens to their avatars.113 If Linden Lab closed Second Life, millions of avatars would “die.” Their owners might be unhappy, but their wellbeing would suffer little more than losing at a video game.114 If, however, such a shutdown meant that real people would lose real money (and productive time) invested in Second Life, then those negative effects are worth considering.115

Third, humans might control several avatars, in the same or multiple virtual worlds.116 The rule of law in one world might counteract lawlessness in another, and the net effect on the user (and the user’s choice to participate in multiple worlds) is the important and interesting point of study.

Thus, if code, norms, law, or markets exert control on real people, then this chapter questions whether the rule of law governs those controls.

• 5. VIRTUAL RULE OF LAW

The foregoing background provides a foundation to consider the rule of law in virtual worlds. As a starting point, the fact that regulation comes from multiple sources should not alone vitiate the rule of law. Given the complexity of virtual worlds, regulation from multiple sovereigns is to be expected.117 Real-world jurisdictions are subject to multiple levels of jurisdiction as well; US residents are subject to federal laws, federal administrative regulations, state laws, state administrative regulations, county ordinances, city ordinances, and local rules imported from other sources, such as building codes. Just as the rule of law might be present in the United States, it might still be present in virtual worlds.

As discussed above, the analysis considers the constraints (from whatever source) on users. The results are unexpected. Maligned sources of law such as agreements and code hold the most theoretical hope for the rule of law, despite often currently falling down in practice. Lauded sources of law, such as community norms and importation of real-world law, appear to fail not only practically but also theoretically.

• 5.1 Market Regulation via the User Agreement

For better or worse, provider agreements define almost all of the rules that users must obey. Many object to the notion that such agreements—which are undoubtedly contracts of adhesion—should govern behavior within the worlds.118 Despite objections, contractual sovereignty is the fact of the matter.119 If an agreement states that users do not own the “virtual property” that their avatars “possess,” then users do not own such virtual possessions, no matter how seemingly unfair, inefficient, or unfortunate the announced rule might seem.120

In theory, contractual regulations may exhibit the ten indicators discussed in section 2. Contractual rules can be general, announced in advance, nonarbitrary, neutral, and so forth.121 Further, contracts fulfill the simpler definition that rule of law only requires the sovereign to behave in accordance with law. Real courts of law will almost certainly hold providers to the explicit terms of their agreements.122 While it is the case that many users agree to such agreements without reading them,123 this does not change the result;124 most people have not read the US Code, state codes, and court cases that will affect them.

• 5.1.1 Contract modification

Of course, in practice the rule of law may not apply. For example, the provider can modify most agreements at any time,125 but even this does not negate the rule of law.126 The question is whether such modifications are frequent, arbitrary, ex post facto, or targeted at specific users or groups.127 Anecdotal evidence suggests that modifications do not suffer from such problems much of the time. Indeed, providers seem to respond to the desire of their users (and the corresponding market pressure) to make no changes that will upset a large portion of the population, but there are also exceptions.128 Four such modifications illustrate the point.

First, Second Life decided to start taxing virtual property.129 A tax made great business sense; as virtual property proliferated, revenues on such property would grow. Of course, users did not want to pay additional money, and their avatars staged virtual protests to make the point. Second Life eventually rescinded the change.

Second, in 2007, Second Life outlawed gambling.130 On its face, this would appear to violate rule of law principles because those who joined Second Life to start a gambling business were now out of business,131 but closer examination reveals the opposite.

The ban was not a “frequent” change; it was not as if Second Life banned entire lines of business and then reinstated them on a regular basis. The contract amendment was not arbitrary; gambling is illegal in many jurisdictions. The rule had no ex post facto effect; it imposed no penalty for past gambling. Additionally, the change was not targeted; it was a general rule with general application. Based on these changes, the contractual law against gambling was no different from any legislative ban on real-world gambling, in accordance with the rule of law.

Third, in March of 2009 Blizzard announced new rules regarding the use of software “addons” used in its World of Warcraft world. These rules purport to limit who can use addons and how. Addon developers may not charge for addons nor may they seek donations in-game, they must make the source code visible to all, and Blizzard may disable any addon at any time.132 This rule has a definite ex post facto effect—time, effort, and money used to develop this software is now worthless if the addon cannot be sold as anticipated.133 Further, though apparently general, the rules may target specific users.134

Fourth, modification may be arbitrary and targeted at specific individuals. As discussed previously, The Sims Online banned Peter Ludlow because of a particular newspaper blog he published.135 To the extent that the provider agreement did not allow such a ban, the action was arguably a modification of the agreement as it applied to Ludlow and, as such, it was arbitrary. By extension, every action that a customer service agent takes with respect to a user, if not specifically allowed by the agreement, is a potentially arbitrary “modification” of that agreement.136 Even where a company modifies the agreement in response to customer requests,137 such frequent changes violate one of the rule of law indicators.

• 5.1.2 Vagueness

A bigger problem than modification—indeed, a critical problem in practice—is that provider agreements are notoriously vague.138 These agreements become even vaguer when they incorporate community standards as enforceable promises.

For example, the Second Life terms of service state that violation of community norms, including lack of “tolerance” and “respect,” is punishable by account termination.139 In other words, the potential penalty for “intolerance” is death of the avatar.

The rule of law problem with this is not the death penalty—if announced beforehand, users can avoid Second Life if they want to avoid penalties. Instead, the problems are: (1) intolerance is ill-defined;140 (2) there is no way that such a contract term can (or will) be enforced neutrally and consistently; and (3) there is no independent factfinder to determine whether behavior is intolerant. Even so, these shortcomings may not negate the rule of law if the provider could announce that the contractual rules are never enforced—users would know what the likely outcome is and plan accordingly.141 Of course, other users might attempt to enforce the terms, which would dilute any provider announcement.142

Vagueness detracts even further from the rule of law when the penalty shifts from unenforced avatar death to enforced real-world imprisonment. Criminal liability for violating the Computer Fraud and Abuse Act by breaching a user agreement is subject to continuing battle in the courts.143 Thus, an avatar’s intolerance and lack of respect—conduct that could never be criminalized in the real world—might lead to jail time if expressed in breach of a provider’s user agreement. This outcome—even the uncertainty generated by its mere possibility—is contrary to any number of the rule of law indicators discussed above.144

• 5.1.3 Lack of enforceability and enforcement

These vagueness concerns highlight a more general practical problem: provider agreements are not enforced or enforceable consistently or equally, such that users cannot rely on agreement-based law, even if announced beforehand.145 One explanation for uneven enforcement is that providers do not include a wide variety of sanctions in their user agreements in case of breach.146 This means that any wrongdoing receives the maximum penalty: avatar death. Providers are loath to terminate user accounts, especially paying accounts, for every little transgression that might not comply with the terms of the provider agreement.147 Providers have even less incentive to enforce contractual terms in real-world courts, for cost and publicity reasons.

Furthermore, it is quite difficult for users to enforce provider agreement breaches against other users, because users do not enter into contracts with each other—only with the provider. Some argue that such enforcement is impossible;148 at the very least, it is difficult,149 and it is inefficient.150 Further, even if a provider agreement is enforceable by users, equitable relief may not be available.151

As a result, if the virtual-world provider does not enforce the contract, at best the “laws” might be enforceable, and at worst they will remain unenforced.152 Contractual regulations with limited and uncertain enforceability fail several enforcement-related indicators of the rule of law.

Further, lack of enforcement means that provider agreements are almost never tested in court. In turn, lack of testing provides no pressure to write clear contractual rules with varying penalty levels for varying misconduct. If there were a variety of penalties short of avatar death, providers might be more willing to define and enforce contractual rules in-game.

• 5.2 Community Norms as Law

Lack of contractual enforcement has led to community enforcement of norms.153 Community enforcement can be anything from a decrease in status, to gossip, to harassment, to attacking the offending avatars.154 Some have applauded community efforts as a successful response to what would otherwise be lawlessness.155 For example, some suggest that laws in virtual worlds might mimic rules relating to sports. Professor Fairfield uses hockey as an example; the rulebook disallows fighting, but community norms supplement background tort law by allowing some amount of fighting without being legally actionable battery.156

From a rule of law point of view, however, matters are hardly so simple. First, enforcement of community norms, even if effective some of the time, does not provide sufficient widespread stability to be considered the rule of law.157 Players have no coercive power to enforce the rules, other than through player versus player harassment.158 Furthermore, norms may simply be arbitrary.159 Thus, while community enforcement can shape user behavior, it is often discretionary, inconsistently enforced, partial, and not determined by a neutral factfinder.160 As a result, community enforcement fails six of the ten indicators based on enforcement alone.161

Second, community norms are, overall, more vague and more secret than provider agreements.162 New users have no idea what the community expects,163 vague notions of tolerance and respect are often unspoken,164 norms do not effectively propagate to noncentrally located users,165 and norms shift over time based on new user influx,166 as well as complaints that are not aired publicly.167 Additionally, it is unclear what level of violation of community norms will rise to the level of independently actionable torts.168 Thus, users certainly consent to being governed by community norms,169 but they often have no idea what they are consenting to and, more importantly, no ability to find out other than through trial and error.

Thus, there are no preannounced, publicly available, attainable, written, forwardlooking, impartially enforced rules. Using the hockey-fight example, new players may not know how much fighting is acceptable, and many players will be unaware that the fight has gone too far until it is too late.170

Selective community enforcement through online violence might seem like the right idea in the absence of other law, but the real world calls such behavior mob vigilantism.171 It may be necessary for enforcement, but it is hardly the rule of law. Further, it does not encourage more business in the virtual world.172

These concerns may transcend practical difficulties to present a theoretical bar to the rule of law. Communities shift by nature, and enforcement will always be at the whim of the group. Unless community norms can be “codified” in some form (such as an agreement) that is enforceable in a regular, consistent, and impartial manner, community norms will always be a barrier.

• 5.3 Factfinding

An overriding problem with enforcement of market- or community-based regulations is the lack of any factfinding, let alone neutral factfinding, with respect to in-game viola-tions.173 To be sure, parties can obtain a neutral determination in the real world, but there is no real-world right of action for many in-world wrongs and there are few real-world checks on the provider’s ability to terminate an account or otherwise to curb activity through software programming.174 Additionally, uncertainty about the enforcement of provider agreements may divert focus away from important regulation issues.175 Even if communities perform their own factfinding, there is no guarantee that providers will take any action based on the findings.176 Finally, the cost of obtaining a neutral real-world factfinding will likely outweigh the benefits of such adjudication even if the harm is actionable.

However, difficulties in factfinding should be separated into those that affect the rule of law and those that do not. Factfinding that is absent due to lack of adjudication and enforcement mechanisms implicates the rule of law.177 Factfinding rendered impractical because the cost of obtaining resolution is higher than the harm at issue concerns the rule of law far less. Access to justice can sometimes be costly, whether real or virtual. While inexpensive or even free adjudication may be normatively preferable, in most cases cost should not negate the rule of law, so long as it is not the sovereign imposing the cost. Thus, filing fees might negate the rule of law while attorneys’ fees would not. This distinction is relevant to provider agreements that require costly arbitration; where the providersovereign requires a large upfront cost such as arbitrator fees, an arbitration clause may negate the factfinding and enforcement indicia.178

• 5.4 Code as Law

Provider-implemented code that constrains behavior in the virtual world suffers from few of the shortcomings just discussed. There are no vague contract terms. The community neither defines nor enforces the rules.179 There is no need for factfinding. Instead, the provider defines exactly what avatars can and cannot do—a reality often called the “wizard” or “god” phenomenon.180

• 5.4.1 Code and the rule of law

The rule of law problem here is the inverse of user agreements as law. Instead of being vague, partial, and unevenly enforced, code is the ultimate impartial rule: It is clear, unambiguous, perfectly enforceable (if there are no bugs),181 treats everyone equally, and lacks all discretion.182 If a world disables the software that allows avatars to transfer virtual property to others, then avatars can no longer transfer virtual property inside the world.

In itself, unilateral code is not a problem under the rule of law; as discussed previously, even a dictator can follow the rule of law. Indeed, depending on the administration, in theory code could be the perfect rule of law.183

Unfortunately, in practice code will often fail several indicators. Code changes are frequently hidden,184 unannounced,185 and potentially very arbitrary.186 These traits are potentially exacerbated if users provide the code.187 If administered in this way, code, too, would violate the rule of law.188

• 5.4.2 The interaction between code and agreements

If a world’s code disallows an activity expressly permitted by contract, the rule of law will suffer from the provider not following its own rules. This renders the law contradictory/ arbitrary, vague, and nonpublic. Of course, there may be debate about whether an action is expressly permitted, though a vague agreement diminishes the rule of law as well.

The opposite scenario, where code allows avatars to take actions otherwise barred by agreement, raises concerns, too. For example, a world may bar player versus player combat in its agreement, yet the software design may allow one avatar to attack another.189 Similarly, the code may allow an avatar to obtain another avatar’s virtual property through fraud. Stopping barred activity through code varies in difficulty; for example, stopping player combat is far simpler than programming against deception.

The rule of law becomes relevant because many believe that if the software allows something, then it must be “legal.”190 Such users would argue that the rules are arbitrary because they are contradictory: one source of regulation bars an activity while the other allows it. The answer lies in the complexity of code—it is impossible to both predict and effectively block every type of action that might occur in a virtual world.191 For example, game rules and code provide almost no method for making complex agreements between avatars.192

The real world has an analog: door locks and fences.193 These codelike devices keep humans from entering real property, but their existence does not mean that one breaks no law by entering someone’s unlocked home. The rules are not contradictory simply because both locks and laws regulate behavior. Thus, the fact that code and agreements might allow different things is not a real problem for the rule of law. Both constrain users, and users must look to both as the source of regulation.194

There are exceptions, of course. For example, where code allows an action due to a program error—an action not otherwise barred by agreement—the provider might “undo” the results of the “exploit” retroactively.195 This retroactivity may be illustrated by two examples. First, a user of Second Life sued the provider for revoking property the user purchased through an auction based on its suspicion that the user exploited a loophole in the software.196 Second, a provider in South Korea reverted possession of a virtual castle to prior owners, claiming that the battle for that castle should not have been allowed by program code.197

To the extent that these actions were not barred by agreement (that is, the auction and battles were “proper” under game rules and the users were unaware of the program errors), then the retroactive changes were surely contrary to the rule of law. Then again, for the users who lost property due to computer bugs, the errors were arbitrary application of code as law.198 As a result, exploited program errors will likely diminish the rule of law in one way or another.199

• 5.5 Legislated Lawlessness and the “Rules of the Game”

It is common for virtual worlds to allow unconstrained behavior—even behavior that might harm others. In such worlds, fraud, theft, avatar combat, and deception are “part of the game.”200 Professors Lastowka and Hunter analogize claims of actionable harm to a basketball player suing for “theft of a basketball on the court” and argue that avatars of a given world accept mandated lawlessness.201 The question is whether one can have a law that there is no law.

This chapter concludes that mandated lawlessness is not rule of law. First, it is unlikely that new users would know before joining that what might otherwise be actionable wrongdoing, such as fraud, is legally acceptable within the game.202 Second, even if such “rules” are announced in some form, they are not concrete enough to plan affairs by. Instead, they increase costs and unsettle expectations just like vague and arbitrary rules.203 Mandated lawlessness is still lawlessness—few argue that the rule of law governed the Wild West.

• 5.5.1 Legislated rules and the magic circle

Presumably, real-world conduct can be regulated by real-world laws,204 such as the case where a user logged in using another person’s password and sold his virtual property.205 Logging into another’s account is a real-world act that might be punishable regardless of what the game rules are.206 For example, hacking into a computer to steal gold might be punishable, even if stealing gold within the game is allowed by the game rules.207 However, where the conduct is in-world and not clearly allowed by game rules, the analysis becomes murkier208—especially because of the complexity relating to hardcoding in-game rules.209

Vague agreements and norms exacerbate the conclusion that wide open game rules do not comport with the rule of law;210 regulation is either incomprehensible or nonexistent. To overcome these shortcomings, virtual worlds must either engage in much more thorough legislative activity with respect to allowable conduct in the virtual world,211 or more specifically rely on real-world background law.

• 5.5.2 In-world legislation

A few sites have even attempted more thorough in-world legislation.212 LambdaMOO, for example, at one time had a detailed set of rules based on majority voting.213 Other sites have instituted detailed community standards rules that are different from real-world law.

These efforts show that nonvague, nonarbitrary lawmaking is possible, but even this lawmaking is not without problems. Neutral factfinding and impartial enforcement, for example, continue to elude, and online communities may exhibit arbitrary and kneejerk reactions to perceived wrongs.214

More important, despite the fact that in-world regulation may be normatively preferable,215 legislating an entire criminal and civil law for each virtual world is doomed to fail. World-specific laws can effectively capture the vagaries of that world,216 but no provider or population has the time, energy, or will to create a detailed set of laws.217 Those laws would be exceedingly complex, including real and personal property, tax, insurance, torts, contracts, secured transactions, governance, and dispute resolution, among other things.218 These varied areas keep dedicated real-world governments busy; game players are unlikely to pay for the opportunity to work at creating, managing, and enforcing such a detailed legislative system.219 Furthermore, providers cannot effectively implement rules that the majority may want, because such rules might lead to a disproportionate amount of abuse by those who take advantage of such rules.220

These concerns are more than mere practical hurdles. The complexity of an entirely self-legislated world, especially when combined with the inherent problem that desired rules might incentivize behavior by a few people that can significantly harm the world, renders autonomous self-regulation theoretically defunct.

• 5.5.3 Importation of real-world law

The failure of complete virtual legislation means that providers and users must rely, at least in part, on well-developed real-world laws.221 Many sites do so, outlawing activity that would otherwise be illegal in the real world. This satisfies several rule of law indicators, even if the enforcement-related indicators are unmet.

However, real-world laws are often ill-suited to game rules.222 Laws against murder, for example, are irrelevant where player combat is the norm.223 Even simpler crimes, such as theft, have no relevance in a world where theft is encouraged.224

The challenge is for each world to legislate exactly which real-world laws might apply to in-world wrongdoing, and how.225 A world might outlaw defamation but accept theft, for example.226

However, world-by-world compromises about which law to import, though facially helpful, solve few rule of law problems inherent with a permeable barrier between real and virtual worlds—a broken magic circle.227 This is most true where behavior is allowed in-game, but where such behavior has real-world consequences.228

For example, even if in-world rules allow false statements about avatars, such statements might cause real harm to the avatar’s user that real-world defamation law will vindicate despite game rules.229 Game rules will not provide real-world immunity, because they only apply to in-game harm. Indeed, arguments that users cannot sue the provider for actions of other users,230 or sue other users for breach of the provider contract,231 make the problem worse. If users are not contractually bound to each other, then the game rules cannot immunize conduct outside the game vis-a-vis other users.232

More generally, the mechanism by which public law values might regulate private world behavior is exceedingly complex.233 It is unclear whether and which real-world laws will preempt game rules and provide a cause of action for an aggrieved user.234 This highlights one of the most pressing concerns: nobody seems to have a firm understanding about how real-world laws will apply to virtual wrongdoing.235 Many have contributed outstanding work toward answering this question, but actual legislation and court decisions are insufficient to determine what laws will apply.236

Until the laws applying to virtual worlds are far more developed, behavioral crossover with the real world will reduce the rule of law to a shambles.237 No matter how well developed a game’s rules might be (whether through agreement, code, or norms), the user will not know what their rights, remedies, limits, or penalties are. This is by definition an arbitrary rule.

In a sense, this is both the easiest and the most difficult point of analysis. It is easy because the lack of any clear rules makes a finding of no rule of law straightforward.238 It is difficult, though, because simply dismissing the potential for real-world laws is not a terribly palatable answer. Surely, there must be some possible ironclad analysis applying laws to behaviors in virtual worlds: harassment, theft, spam, conversion of intangible property, and so forth. Such analysis is the subject of many books and chapters but, other than a smattering of cases internationally, few rulings have provided answers. As virtual worlds grow, more answers about whether the real world will provide the rule of law for virtual-world participants may appear.

• 5.6 Jurisdiction and Real-World Law

Some have argued that real-world territorial uncertainty violates the rule of law. For example, Professor Post argues that participants in cyberspace—and virtual worlds in particular—face this uncertainty.239 Post describes cases in which a foreign country imposed laws on noncitizens who had no contact with the country other than online activities about which the countries seemed to care.240 This, he argues, violates the rule of law: “It’s a strange kind of law being served up by the Unexceptionalists—law that only gets revealed to the interacting parties ex post facto, and which can therefore no longer guide the behavior of those subject to it in any meaningful way.”241

It is certainly true that countries might apply their laws in an arbitrary way against noncitizens. This, however, is not a problem of the rule of law in virtual worlds, but rather a problem of rule of law in those specific countries. Countries that try noncitizens in absentia for activities that do not touch on the country surely fail several of the indicia of the rule of law with such arbitrary, targeted, and partial enforcement of laws. To be sure, virtual worlds make user conduct more visible to the authorities in such countries, but real-world television, radio, publishing, and banking activities will result in the same uncertainty with respect to knowing which country might claim jurisdiction over activities. Iran’s fatwa calling for the death of Salman Rushdie due to his publication of The Satanic Verses is a prominent example.

More relevant are the effects of territorial uncertainty where conduct might legitimately affect a certain country. To be sure, uncertainty about the laws that might apply to an activity is not helpful guidance.242 But here, too, such uncertainty relates to the nature of overlapping sovereignty rather than the specifics of virtual worlds. To the extent that jurisdictional uncertainty weighs against the rule of law, it does so generally with respect to any medium that crosses borders, and such uncertainty existed long before the internet. Indeed, this is why there are treaties about service of process, intellectual property, child custody disputes, and a myriad of other potentially border-crossing disputes.

It may be that certainty about which sovereign will claim jurisdiction over a matter is unattainable, but people live with this type of uncertainty every day. Blue-sky laws in securities regulation are a good example, but even making a telephone call or sending a letter by international mail can implicate the laws of several states and even countries.

To be sure, users will likely not know which country other avatars come from, but anecdotal evidence suggests that most users congregate in locally provided worlds—language barriers alone encourage locality. Even if they did not, people often do not know when their activities might implicate the laws of other countries, especially in modern commerce.

• 6. CONCLUSION

This chapter’s analysis shows that virtual worlds exhibit—in practice, at least—few of the indicators of the rule of law. The reasons for the failure depend on the source of regulation. Market-based regulations, such as contracts, lack neutral and consistent enforcement mechanisms. Code-based constraints are often implemented arbitrarily and without notice. Community norms are often vague, unwritten, and enforced by mob rule. Autonomous self-regulation is too complex and costly. Real-world laws, no matter how clear and impartial in real-space, do not have a history that gives any confidence about how they might apply to virtual activity. The chapter also shows that academically popular sources of regulation—community norms and autonomous self-regulation—are the least likely to achieve the rule of law.

Whether providers, users, or lawmakers should do anything about these failings depends on normative judgments that this chapter expressly avoids. If, however, providers want to attract paying customers, they might choose to do so by enhancing the rule of law as it applies to their users. Of course, this is easier said than done; what they might want to do and what they can actually achieve are two different things. The following are a few potentially achievable reforms.

First, providers should provide more specificity about allowable activity in their agreements, with defined penalties that match the offense.243 Further, community norms—especially those enforced by the provider’s agreement—should be written and published.244 Many sites already do this, but most postings are vague.

Second, this specificity might explicitly incorporate which real-world laws apply (or not) to in-world behavior. Common torts and crimes have fairly well-defined elements, and these can apply consistently to in-game behavior. Such incorporation will more precisely clarify what game rules allow and what they do not. Of course, real-world laws may still preempt the agreement, because (1) some in-game activity may be intolerable even if the parties agree, and (2) some in-game activity may cause real-world harm that is preempted by real-world law.

Third, providers could incorporate explicit third party beneficiary clauses into their agreements to allow users to seek relief against other users for breaches of the rules. While such provisions are arguably unnecessary, they would provide clarity about actionable claims.245 This is especially important to providing enforcement where the provider has no desire to enforce its own agreement. Furthermore, to the extent that providers want to provide rule of law without losing central enforcement responsibility, the provider can enumerate exactly which types of claims are actionable while expressly reserving breaches that only the provider can enforce.

Fourth, providers could institute some neutral arbiter of fact, especially when they resist third party beneficiary claims.246 For example, avatar arbitrators that hear argument and make factual findings could judge in-world wrongdoing.247 Nonvirtual wrongdoing, such as exploiting a system bug in breach of contract, could involve real-world arbitrators (hopefully cheaply) making factual findings.248 Neither option need be a full-blown arbitration so long as a neutral party can determine whether the claimed offense occurred before the contractual penalty is issued by the provider.249

These are just a few of the ways to implement a more robust rule of law. There are surely other methods that can better satisfy the ten indicators. Further, these methods can and should be targeted at the specific shortcomings that this chapter identifies. However, some problems, such as uncertainty about real-world laws, can only be improved with time and experience.

SOURCES

Cases

Bragg v. Linden Research, Inc., 487 F. Supp. 2d 593 (E.D. Pa. 2007).

United States v. Lowson, No. CRIM. 10-114 KSH, 2010 WL 9552416, at *6 (D.N.J. Oct. 12, 2010).

United States v. Nosal, 676 F.3d 854, 863 (9th Cir. 2012).

United States v. Nosal 844 F.3d. 1024 (2016) (access without permission can constitute violation), https://cdn.

ca9.uscourts.gov/datastore/opinions/2016/12/08/14-10037.pdf.

Statutes

U.S. Const. Amends I-X.

47 U.S.C. § 230.

• 4. Mixed reality: how the laws of virtual worlds govern everyday life Josh A.T. Fairfield*

• 1. INTRODUCTION

Imagine a museum. The museum has statuary pictures, and a fountain located in the atrium. As you enter the museum, you adjust your glasses that offer you four different experiences. You select the first channel. A virtual docent appears and begins to provide a lecture accompanied by multimedia presentations of each of the exhibits.250 251 You can also see wiki-style notes and comments on each note written and rated for usefulness by former museum visitors.252 Curious, you flip to channel two—intended for children. There, you experience conversations with the artworks themselves, which animate and engage you in entertaining banter. The third channel contains entirely virtual exhibits that occupy physical spaces in and around the museum. The fourth and last channel displays an avant-garde mash-up in which artists from across the city have experimented with and built on the exhibits, altering pictures in subtle ways, adding lighting to statues to change the effect, or outrightly modifying the exhibits so that they are half real, half virtual.253 Although this type of technology may sound like science fiction, New York’s Museum of Modern Art (“MoMA”) has already featured such an installation.254

Now, let us interject reality. The scene described above will never be the future. In the future rather than four channels there will be thousands of channels offering experiences in the museum from the fantastical to the statistical, and everything in between. The merging of the Internet with the physical world around us—“realspace”—is called Mixed Reality. Mixed Reality technology is already in use and its adoption is only accelerating.255

Imagine a world in which your clothes are free but your clothes carry shifting advertisements on smart fabric. Imagine a world in which your communication and interaction with others are so extensively digital that you can choose to edit your ex-husband out of your existence—you won’t have to see him, hear him, see anything he has written, hear any phone calls, nothing. The future of Mixed Reality, where virtual world technologies govern our everyday life, is already here.256 Through mobile technology, computing has finally come out from behind a desk and into the street.257 As a result, the laws that govern virtual worlds have a greater and greater impact on our everyday lives.258 However, the law is playing a desperate game of catch-up in order to adapt as disputes and lawsuits over Mixed Reality arise.259

Most scholarship to date has assumed that modern society is increasingly virtualized.260 It is more accurate to note that virtual data is increasingly realized as it becomes tied to realspace features and geography.261 Yet while virtual experiences are entering real life at an ever-increasing pace, the legal literature on virtualization technologies lags badly. The bulk of virtual worlds research focuses on the impact that real world regulatory regimes have on online spaces and communities.262 This chapter proposes that the traditional focus is backwards—that the legal regimes governing virtual worlds are increasingly coming to govern real world day-to-day life. This trend is accelerating as Mixed Reality applications integrate virtual objects and experiences into the real world.263

The growing application of online law to realspace is a problem because offline and online law have significantly diverged. Consider the simple act of purchasing a book. If you purchase a book offline, you own the book. If you purchase an e-book, you own nothing.264 As Mixed Reality technologies merge real and cyberspace, the critical question is whether online or offline law will determine consumers’ rights over property and data. There is a very real risk that courts will continue to reason from online analogies for offline issues, rather than turning to offline common law rules to determine consumers’ rights.

This chapter proposes rebalancing the law governing Mixed Reality by using analogies to real world situations rather than limiting legal analysis to intellectual property and online licensing law. Because the common law proceeds by reasoned progression based on the closest available analogy, it seems more in line with the American legal tradition to look to “real world” law for Mixed Reality, despite the increasing virtual enhancement enabled by Mixed Reality applications. For example, imagine that a disgruntled neighbor defaces your home with an obscene word that appears when your house is viewed using a Mixed Reality application. The most appropriate analogy may be to the law of property and trespass rather than referring to the online licensing agreements of the application creator.

In proposing a rebalancing, this chapter bridges serious gaps in two sets of legal literature. First, there is a gap in the legal literature with respect to the impact of Mixed Reality applications. Over 200 articles have been published on law and virtual worlds or virtual reality in recent years.265 To date, none have focused on the legal impact of Mixed Reality applications266 even though Mixed Reality is far more common and commercially important than are pure virtual worlds.267 This gap is all the more important because computing has begun a great migration away from desktop computers and towards laptops, tablets, and most of all, smartphones.268 Mobile computing has led to the augmentation of real people, places, and things with virtual experiences and data.269 For example, when you compare prices on eBay or Amazon from your desktop, there is not a pressing need to tie the data to a specific location. But if you use a smartphone barcode scanner to compare prices as you shop in the local supermarket, the actual physical location of competing products at lower prices matters. Stores that augment their brick-and-mortar locations with virtual data to assist tech-savvy shoppers will gain a competitive advantage.270 With the advent of smartphone technology, the importance and depth of adoption of Mixed Reality applications far outstrips that of pure virtual reality applications.

The second gap lies in the legal literature of pervasive computing (“PerC”). PerC is the predicted future embedding of computer chips into the physical environment. In the future, PerC theorists predict that there will be microprocessors—such as radio frequency identification (“RFID”) chips—in credit cards, shoes, toasters, walls, ceilings, and refrigerators.271 But the PerC literature has missed the mark because data tagging of realspace has preceded PerC by at least twenty years.272 While implantation of chips into people and the environment is still in its infancy, Yelp, Google Latitude, Hidden Park, Parallel Kingdom, and other mixed reality applications are already here, and from these applications will come the next wave of great internet successes.273 Thus, the PerC literature assumes a legal environment based on the prevalence of physical objects that transfer information embedded throughout our everyday lives, when the reality is that technology has developed in a different way, and much more quickly. This reality—that of Mixed Reality here and now—has not been addressed in the legal literature discussing PerC.

While the World Wide Web revolutionized human knowledge by linking it together, indexing it, and making it searchable, today a far greater revolution is underway: the real world itself is becoming hyperlinked and indexed. One example of hyperlinking the real world are quick response codes (“QR-codes”)—tags in the real world that can either link to a website or contain information about the location or object near which they are found. Once a smartphone recognizes the QR-code, it provides the user with access to websites, free e-books, streaming videos, or even three-dimensional (“3-D”) overlays onto the physical reality perceived by the smartphone user through the device.

Thus, the Mixed Reality revolution is already happening. The real world is already alive and crawling with attached data. Data is routinely attached to real-world people, places, and things, and mobile devices permit users to experience this local data in the place to which it is attached. Well in advance of the advent of the pervasive computing world, data tagging has already hyperlinked and virtualized the real world—our world today.

The remainder of this chapter proceeds in four Parts. Part II explores and defines Mixed Reality technologies and demonstrates the gaps in the legal literature on virtual worlds and the legal literature on pervasive computing. Part III analyzes the legal implications of the ongoing extension of virtual governance regimes into realspace and projects future trends. Part III also anticipates several legal problems including a Mixed Reality land rush274 similar to the domain name rush of the late 1990s,275 the advent of new forms of cyberdefamation or reputation poisoning, and dignitary harms based on false information propagated through Mixed Reality applications.276 Part IV modestly

proposes that as real and virtual worlds converge, the best available analogy for governing Mixed Reality are the background principles of the common law, not the law of online intellectual property licensing. Part V offers a brief conclusion.

• 2. MIXED REALITY

This Part places Mixed Reality experiences on a continuum between virtual and real worlds. It first describes the various technologies and techniques for creating Mixed Reality experiences and then offers a more developed taxonomy for describing the various types of experiences that the technology can create.

• 2.1 The Technology

Mixed Reality is exactly what it sounds like—the mixing of “virtual” and “actual” reality.277 The core of Mixed Reality is not new. The central element of Mixed Reality is the tying of data to an anchor in the real world, be it a person, geographic location, or structure. Some early examples of data tying are gossip circles in medieval villages or land records that indicated property ownership. In gossip circles, the act of gossiping “tagged” a person with information about that person. Land records—although much less accessible in medieval times—similarly linked a person to an ownership interest in property. Today the same type of data can be tied to a person or property through virtual technology. For example, circles in Google+278 now give information about a person, much like a medieval gossip circle.279 Mobile applications that list land ownership and property values when the user snaps a photo of a house with a smartphone now link that information to the property.280 In both of these examples, information that had always been tied to an object (a person’s reputation through gossip, or real estate ownership through land records) is now being made available seamlessly through technology. What makes Mixed Reality significant is the scale of this new data-enriched realspace.

One new aspect that Mixed Reality introduces is the combination of mobile computers with geotagged data and the extent to which this combination is a part of our everyday lives. Through mobile devices, users see data that is tied to particular places, objects, or people that they encounter.281 Smartphone technology and other miniaturized computers permit a more mobile and interactive experience with our surroundings.282 Coupled with the growth in mobile computing is the growth in Mixed Reality applications. Now, a husband who goes shopping can peer through his smartphone camera at a product and immediately see tagged locations of local competing stores with better prices.283 A lost tourist in London can look through her smartphone and see virtual arrows overlaid on top of the real world that guide her to the nearest Underground station.284 A potential Boston bar-crawler can use his cell-phone to examine the virtual tags that other patrons have left behind describing the best drinks served at a given hotspot.285 Parents can install geolocation devices in cars that mentor overzealous teenage drivers and provide parents with instant information about their teen’s driving.286 In short, Mixed Reality takes computing out from behind the desk and into the real world.287

As we do so, what matters is not that computers are everywhere, but that they are with people. Given that a person can carry a smartphone in her pocket and access data that other people have tied to a given location, object, or person, people now move through a world augmented with data tags.288 In the same way that people can click the “like” button on a Facebook comment, they can now click the “like” button for a restaurant, or a colleague, or a neighborhood. Popular apps like Yelp and Foursquare have already turned this practice into a runaway business model.

Thus, data tagging—the tying of information to a specific geographical location or real-space anchor—not embedded computing, is driving the virtualization of realspace.289 Data tagging can be done in a number of different ways. Global Positioning System (“GPS”) tagging, other Location Based Services, tagging through what will be called Identification Services (“IDS”), mobile tagging, and Near Field Communication (“NFC”) are all forms of data tagging. Each of these data tagging methods add to Mixed Reality in a unique way.

By far the most common data tagging method is GPS data tagging (colloquially, “geotagging”).290 A GPS-enabled smartphone knows to overlay a given reputation bar on top of the local eatery because a global positioning system has identified the location of the restaurant.291 When the smartphone knows its longitude and latitude, it can display information relevant to that location. A simple example and common application of GPS tagging comes from the world of outdoor hiking.292 Geocaching has become an international phenomenon.293 A geocacher is a hiker who hides a small object for other hikers to find by using a GPS tag left by the original geocacher. With their smartphones or GPS device, hikers find these objects in the real world by relying on the data that is tagged to the physical location of the geocache. They can then log their visits online with the rest of the tech-savvy hikers that located the geocache before. Geocaching takes a simple activity like hiking, augments it with data tagged to real-world physical locations, and transforms it into a hidden world of treasure hunting.294

Due in part to the success of GPS, it has been coupled recently with another type of data tagging, sometimes called Identification Services.295 The difference between GPS and IDS is that, while GPS relies on GPS coordinates, IDS relies on some visual or audio cue within the local environment, be it a corporate logo, a face (for facial recognition software), or even a fragment of a musical tune (as in the case of the popular Shazam music-identification app). The real and virtual worlds connect through the smartphone’s lens or audio pickup.296 This requires the user to be in front of the real world cue. For instance, a user must be in front of a Starbucks and view the Starbucks logo through the camera lens before the application will “check in” using an IDS.

Mobile tagging also hyperlinks reality. While closely related to IDS it relies on barcodes or other machine-readable codes to retrieve virtual information. Mobile tagging, such as QR-codes, is more involved than IDS because information is not tagged to a visual or audio cue but rather embedded within the barcode or image itself. The mobile tag contains the code that creates the virtual experience, whereas IDS merely identifies the point where information is tagged. Mobile tag data can be a web address, a connection to a wireless network, a free e-book, a Sudoku puzzle, or even an animated graphic of a tank bursting through the wall.297 The most prevalent examples of mobile tagging are QR-codes that act as a link to an online web presence, but there are numerous other applications.298

Near Field Communication299 is yet another form of data tagging. With NFC, the application is closer to the vision of the pervasive computing literature. NFC relies on computer chips embedded in the environment or objects that are able to communicate information to one another via extremely short range radio fields (separated by mere meters). An example of NFC technology might be an application that allows a mobile device to function as a credit card and that could be waved near a receptor in a store in order to be “swiped.” However, because NFC requires two sets of embedded chips in order to function, it is a far less commonly used method of geolocating data than GPS, IDS, or mobile tagging.

• 2.2 A Taxonomy of Experiences along the Reality-Virtuality Continuum

As will be seen, infra, understanding where a given communication lies on the continuum between virtual and real will be of some help in understanding what legal analogy should apply to a given phenomenon. This Section provides a practical set of terms for discussing the technology. As a baseline, the chapter uses Milgram’s Reality-Virtuality continuum (“RV continuum”) as one potentially useful scheme for measuring out the steps from the virtual to the real.300 As can be seen below, the term “Mixed Reality” sometimes refers to the various experiences between fully virtual and fully real. This Section therefore builds out the continuum to provide a more complete picture of the range of experiences offered by virtualization technologies and explains how Mixed Reality—as used in this chapter— is used much more narrowly than the broad concept of Mixed Reality as a description of experiences on the RV continuum, as seen in Figure 4.1.

Mixed Reality (MR) H----------—--1

Real Augmented                 Augmented Virtual

Environment Reality (AR)               Virtuality (AV) Environment

Figure 4.1 Milgram’s Reality-Virtuality (RV) Continuum301

Mixed Reality occupies the space between virtual worlds and realspace.302 Like any inbetween technology, Mixed Reality is defined both by what it is and what it is not. The first problem in defining mixed reality is how to keep a definition from spilling over into generalized network technologies. Overuse of the word “virtual” exacerbates this challenge.303 Virtual has come to mean anything electronic.304 Thus, without care, it is easy to expand the definition of Mixed Reality to include almost all data used by people in the real world—that is, all data. A definition that broad is unlikely to be of much use.

A more accurate definition characterizes a virtual object or experience as a digital representation of something that we would typically expect to find in the real world.305 Mixed Reality then re-injects or repositions that virtual object back into our real world experience. For example, consider a table. One can build a virtual table in a video game or virtual world, but it does not appear in the real world. But with Mixed Reality technologies, one can experience a virtual table in the real world; one can see an image of it manifested in the real world through mobile computing technologies and perhaps decorate it with virtual flowers as well. A table is an overly simple example but the point remains clear: Mixed Reality involves the injection of virtual places, objects, experiences, or other data into real-world contexts.

The second problem with defining Mixed Reality is how to locate Mixed Reality in the range of technologies from virtual worlds to pervasive computing. Over-breadth is again a real risk. Simply defining Mixed Reality as any application of mobile or pervasive computing, when coupled with the “virtual” fallacy above, would mean that one might classify nearly any mobile phone app as a Mixed Reality experience. In fact, the term means something quite specific: it means the projection of virtual objects and experiences into our physical lives.306

Mixed Reality and PerC fundamentally differ with respect to where data is stored and processed.307 Pervasive computing implies that the processing power is embedded in objects all around the user. Instead of tagging data on the cloud to virtual points in the real world, PerC stores and processes this information in computers in the physical environment around you. Unlike PerC, Mixed Reality utilizes data stored on the cloud globally but accessed locally; it is tied to real places, people, or objects through wireless connectivity and location based services. Mixed Reality and cloud computing go hand-in-hand.308 With these definitions in mind, the following Sections explore the broader range of experiences that virtualization technologies offer and attempt to locate Mixed Reality technologies within that spectrum.

• 2.2.1 Virtual reality

One end of the virtualization spectrum is marked by pure virtual reality. Virtual reality is virtualization at its most profound because the goal is to immerse the user in a virtual environment as completely as possible.309 Virtual reality is the “goggles and gloves” technology that attempts to capture every sensation possible.310 Due to bandwidth and processor constraints, as well as the required gear that tends to be expensive, cumbersome, and complex, the technology has not progressed far past the experimental stage or the occasional appearance in movies like Tron, The Matrix, or Lawnmower Man.311 The technology is visually interesting and full virtual reality is often the first thing to spring to the layman’s mind when contemplating virtual experiences.

Yet full goggles-and-gloves reality does not capture the current flowering of virtual experiences—known in somewhat passe technological parlance as “Web 2.0.” The reason is simple: the current digital revolution is social, not technological.312 Virtual experiences matter because they are shared,313 not because they utilize exceptionally rendered 3-D computer graphics.314 There exists a sweet spot where the technology is simple enough to be widely adopted, yet complex enough to offer a compelling virtual experience.315 This explains why smartphones—not virtual reality goggles and gloves—are the current carriers of Mixed Reality experiences. The reality is that more people will have these shared experiences if they are enabled by readily available and relatively inexpensive mobile devices. Shared experiences, not completely immersive experiences, are driving the current push into the most successful mobile apps.316

Consumers have clearly indicated that they seek socially rich virtual experiences. But mobile computing depends on smaller computers.317 Thus, virtual worlds have become simpler, isometric social spaces that can be effectively accessed through a smartphone, rather than the fully-rendered immersive 3-D spaces that require bleeding edge (and large) computers.318 Mobile means smaller, and smaller means more social and less graphically intensive.319 Thus, in considering virtual worlds technologies in the following Section, this analysis includes those highly social but graphically simple virtual worlds that are based on mobile and browser technology.

• 2.2.2 Virtual worlds

A virtual world is a persistent, interactive, avatar-mediated, simulated 3-D space (much like virtual reality), but with more social and fewer immersive features than pure virtual reality.320 Virtual worlds facilitate social interaction and enrich it with a shared graphical context.321 At the nexus between social networking technology and 3-D game environments, virtual worlds follow a very different aesthetic from virtual reality. Virtual worlds do not place the user directly “inside” a virtual environment. Rather, virtual worlds often make use of avatars—characters viewed in the third person that represent the players in the virtual world. Avatars permit an increased range of interaction within the world by indicating a user’s focus of attention and that of other players.322 Judge Posner illustrated the unique ability for avatars to convey user focus when he conducted an interview in the virtual world of Second Life entirely through his virtual avatar.323

Although graphically engaging and immersive, virtual worlds continue to utilize the lower end of graphics capabilities in order to capture as many users as possible. Some virtual worlds remain graphically rich and only run on high-end computers, but the number of players in such worlds has been rapidly outstripped by browser-based games, such as those running on Adobe’s Flash platform. Thus tension exists between the immersiveness of the environment and accessibility to large numbers of users, many of whom may not have high-end computers.324

The trend towards ease of access has led to the popularity of several flash games, in particular, Zynga Networks’ Cityville and Farmville, which run on Facebook.325 These games have exploded both in the traditional computer setting and in mobile computing with smartphones and tablet PCs. These games demonstrate the principles outlined in the following Sections: they are graphically simple and run over social networks.

• 2.2.3 Augmented virtuality

Augmented virtuality is the point at which realspace begins to enter virtual worlds. Virtual worlds—such as Second Life—include the capacity to import real events into the virtual space for virtual world denizens to view. A real-world presidential debate can be imported and streamed live to those virtual world denizens.326 Avatars can sit in an auditorium within an entirely virtual environment and watch events unfolding in the real world.

Google Maps and Microsoft’s Bing Maps provide other examples. Both now include a “drill down to reality” function.327 Whereas before a Google Maps or Bing Maps user might have ended her journey with a real world photograph of her destination (taken by the Google Streetview cars or geographically tagged photos taken by passers-by), the currently evolving functionality augments the virtual world with a drill down to a live camera view. Thus the drill down of a motorist using Bing Maps might be to a traffic camera, or the drill down of a remote viewer might be to a handheld camera that is currently active in the location. One example of this technology is the subject of Blaise Aguera y Arcas’s TED talk, in which he demonstrated the ability to drill down all the way from a virtual world into realspace real-time live handheld cameras.328 These technologies permit users of virtual worlds access to the real world. In so doing, they begin to mix even more reality into the virtual environment.

• 2.2.4 Mixed/Augmented Reality

This leads to the narrow definition of Mixed Reality within the RV continuum. Although the term “Mixed Reality” can broadly encompass all stages of data-enriched real or virtual environments (i.e., the entire RV continuum), for purposes of this chapter Mixed Reality represents a narrow point in the spectrum where near-field technology,329 geolocation services,330 identification services, mobile tagging, and other data tagging techniques enrich the real world with virtual data through the use of technology. This technology is also sometimes called “Augmented Reality.”

The November 2009 issue of Esquire Magazine contains one example of Mixed Reality. It contained Mixed Reality tags such that the magazine cover and several internal advertisements contained virtual elements that only appeared when the magazine was viewed through a computer or smartphone camera.331 Another Mixed Reality application called Hidden Park permits children to see fantastic dragons, trolls, and fairies when specific areas of the park are viewed through a smartphone.332 A child might look at a tree through the smartphone camera and see a goblin face peering out, or a child might look over a field to see elves dancing. Beyond opening up fantastical opportunities for play, these Mixed Reality apps have tremendous potential as educational tools.333 The combination of an app like wikitude334—one of the most popular augmented reality applications—and Hidden Park may fulfill a goal of many parents and teachers: getting kids to enjoy learning. With technology that provides an interactive experience, otherwise boring topics like math or history may become more social, fun, and educational. Children might be more likely to learn math if it involved counting virtual dinosaurs in the park and might be more likely to learn American history with a virtual world overlay of revolutionary-era Boston life.335 This blending of education with fun using technology is not new. The difference now is that mobile computing combined with data tagging and the resulting virtually enriched realspaces are far more social and dynamic than these earlier media.

Mixed Reality applications sit at the midpoint of the RV continuum. They are grounded in real objects and space but augment those objects or places with computer-generated data. For example, some greeting cards now contain a virtual enhancement.336 The card includes a code that the sender can customize with an animated message and the receiver can scan it with a cell phone or web-cam and see the cartoon. The computer layers the 3-D representation onto the object. Often identifying which image to display does not even rely on server architecture. Rather, in many cases, the augmented reality object contains a mobile tag that provides sufficient data for the computer to render a three dimensional image.337 In these instances the real world mobile tag provides the data for the virtual application; the mobile tag augments realspace with data that links directly to that physical printed code.

• 2.2.5 “Reality+”

The final point on this continuum is Reality+. I borrow and use the term reality plus— rather than simple reality—because realspace has always been enriched by information ever since the first fisherman told the second which fishing holes were especially good.338 What is worth noting about realspace is that we have always augmented reality with crude data tagging. Maps and charts have served as crude data tagging devices tied to latitude and longitude. The revolution is in the accuracy, availability, and accessibility of such markers339 and of the propagation of information on a global scale.

It is important to remark on what reality has always shared with information-enriched environments because of how law works. Much of law is a primitive form of augmenting real spaces and objects with data tags. Think about the title recording system for land. Land is not naturally divided into three-acre parcels. An entry in a paper or (increasingly) an electronic database tags specific land as “yours.” Property is, therefore, a form of information-enriched geotagging.340 Like all of law, property is a consensual fiction based on information-enriched reality.

• 2.3 The Gap between the Legal Literatures of Virtual Worlds and Pervasive Computing

Having discussed the technology and terminology of Mixed Reality, the chapter now turns to the two closest legal literatures: virtual worlds and pervasive computing. There is an extensive legal literature on virtual worlds and a less extensive, but still fascinating, legal literature on pervasive computing. This Section examines the gaps within and between these literatures and then demonstrates that a developed legal theory of Mixed Reality fills those gaps.

• 2.3.1 The legal literature of virtual worlds

Legal academics have written several hundred articles focusing on virtual worlds in past years.341 This rich literature has addressed issues including virtual property,342 democracy,343 control over land,344 the use of contracts to govern virtual worlds,345 the impact of policing and surveillance in virtual worlds,346 the taxation of virtual currency,347 and the sales of virtual goods.348 The articles share an intuition that virtual worlds are not only an interesting and novel technology, but that they also represent a compelling example of the law’s development through the common law process.349 As new communities encounter new technologies, they first develop norms, then they develop practices that are adopted by courts and eventually the practices are codified by statute.350 The way that communities respond to emerging technologies drives, in significant part, the development of the law.351

However, one notable lack of the otherwise extremely successful virtual worlds literature is the failure to address issues of mobile computing and Mixed Reality.352 There are several reasons for this. First, virtual worlds have been traditionally defined as graphically rich 3-D persistent spaces in which social groups can gather. But a hidden criterion of virtual worlds is that they be both synchronous353 (interaction within the world occurs among users who are logged in continuously and at the same time) and persistent354 (the world exists without the user’s presence). Most Mixed Reality applications do not seem at first blush to map to the synchronous or persistent nature of virtual worlds and they use many fewer processor-intensive graphics.

The failure to fully address Mixed Reality leaves a significant gap in the virtual worlds literature. Synchronicity and persistence are, in fact, traits of Mixed Reality experiences, although the “world” that provides the experience in Mixed Reality is the real one. Thus, although the technology itself may not create synchronicity or persistence, Mixed Reality does share these characteristics of a virtual world. This is unsurprising; a virtual world draws its characteristics from the real one.355 But what has eluded commentators to date is that virtualized applications, even though they themselves are asynchronous or impermanent, or do not include avatar-based interaction, in fact do form part of a virtual world experience—one that straddles the divide between the virtual and the real.

This chapter broadens the virtual worlds literature by examining a new use of virtualization technologies: the augmentation of the real world with rich sets of virtual objects and data. This immeasurably widens the subject matter. Virtual worlds articles are most often about games. Mixed or augmented reality applications can be games, but they are just as commonly shopping, travel, health, or fitness apps. This results in an enormous number of applications. The offerings in the Apple App Store are growing by leaps and bounds and Mixed Reality applications are among the most popular offerings.356 Services like Foursquare and Yelp, which offer game-like rewards for providing information about locations, goods, and services, have transformed nightlife and fine dining.357

Finally, it is possible that Mixed Reality applications may realize certain goals of virtualization technologies before virtual worlds or virtual reality do. For example, although many elements of virtual worlds—including badges, ranks, experience points, and layered fantasy elements—have entered the real world through Mixed Reality, the real world sense of touch has struggled to enter the virtual. Because it is difficult to import touch into virtual worlds, it may be possible to build fantasy worlds on top of real world physicality long before we will import kinetics (i.e., the sensation of touch and balance) into a virtual world. The former is cheap and just beginning to proliferate; the latter is still the stuff of science fiction—imagine the Star Trek holodeck, which provides kinesthetic sensation through force fields. A more practical approach would be to take real objects, such as a blank-faced robot or a moving floor panel (both of which have already been the subject of fascinating demonstrations) and use them as the underlying surface on which to layer augmented reality experiences.358 So the blank-faced robot becomes the kinetic element of a knight or fair maiden; a larger robot provides the kinetic surfaces for a dragon, and in fact whole different landscapes could be layered onto the real one.359 Or, another example: one company has explored a Mixed Reality “floor” consisting of tiles that constantly move under the user’s feet, giving the user the perception that she can keep walking infinitely in any given direction.360 Mechanical malfunctions of such kinetic interfaces will lead to broken limbs. From the legal perspective, one simple reason to care that kinetics will come sooner to augmented reality than previously thought is that kinetics lead to personal injury lawsuits.

Even today’s Mixed Reality applications have implications for physical harm and personal injury suits. By integrating virtuality into the real world, Mixed Reality applications create the threat that people will inevitably ignore some of the real-life aspects of Mixed Reality experiences. Consider the recent unsuccessful case against Google for harm to a pedestrian who followed Google Maps’ driving directions and was struck by a car.361 The information provided was accessible on the Internet and the directions came up in other services as well. The cause was the driver and not the directions themselves. Google did not interact with the end user in a one-to-one manner.362 Neither realspace nor virtual reality caused the harm.363 Rather, it was the underlying reality of the car and the road that impacted the pedestrian. While the court rejected the claim in this instance, it is clear that Mixed Reality can have very real legal consequences if users sue for physical harm caused while using these Mixed Reality applications. For this reason alone, a developed legal literature of Mixed Reality will have serious salutary effects for law that is currently in the process of being developed in the courts.

• 2.3.2 Pervasive computing

The fewer than five legal articles that have discussed augmented or Mixed Reality have done so in the context of discussions of pervasive or ubiquitous computing.364 The literature on law and PerC is limited to a few articles that share a common definition. PerC envisions the virtualization of realspace through the actual embedding of small computer processors placed ubiquitously throughout the environment.365 Computers would be embedded in walls, floors, ceilings, and toasters. Your refrigerator would automatically update your shopping list, which would be sent to the supermarket for just-in-time delivery to your house. This embedded pervasive computing presence would run constantly and invisibly, providing computing everywhere. Objects would be linked to the network.366 RFID technology would permit objects to communicate with the rest of the embedded and pervasive computing environment to form the “Internet of things.”367

But pervasive computing is developing unevenly.368 Some elements of pervasive computing have advanced rapidly, others not at all, or only slightly.369 The processors that support mobile phones and the growing stream of user data are in the cloud; they are not present ubiquitously in the local environment.370 Actual computer processors are more remote than ever, rather than ubiquitous and embedded all around.371

On the other hand, the ability to richly augment the real world with data has grown quickly.372 Information is accessed locally but stored remotely. The phenomenon of hyperlocal data has gone hand-in-hand with the development of remote cloud computing. Thus, there is a non-trivial gap in the pervasive and ubiquitous computing literature: computer processors must not necessarily be located locally in order to provide rich hyperlocal data.373 Examples are easy to provide: Google Maps augments realspace with significant virtual data and pushes that data out to mobile phones. But the Google Maps data itself is managed and maintained remotely. And this is necessarily so. Massive data sets still require massive amounts of computing power somewhere. The consumer carries the light client program on a mobile device while remote servers perform the heavy computational lifting elsewhere. Pervasive wireless connectivity replaces pervasive computing power.

Conversely, the nanotechnology or micro-microprocessing technology envisioned by pervasive computing has not, largely speaking, come to pass.374 Computing surrounds us today because it is mobile and moves with users, not because it is ubiquitous, already waiting for users wherever they may go. The difference between mobile and ubiquitous computing carries non-trivial legal implications.

Property law would likely govern a hardware-focused regime like PerC, with the property owner as dominant legal entity.375 An example would be a PerC-enabled mall, in which RFID chips embedded throughout the mall communicate to the shopper.376 In contrast, intellectual property and attendant licenses govern software-focused regimes like Mixed Reality,377 and the application provider or developer maintains control over the servers. The current mobile computing regime is closer to the latter structure. The remote servers that produce Mixed Reality experiences are owned and controlled by the corporate entities378 that also own the intellectual property rights in the virtual objects or experiences.379 Use of developers’ networks, apps, or programs subjects the users to a license regime that can severely restrict users’ rights.380

In short, the literature on pervasive computing has discussed two distinct topics: the first Mixed Reality,381 and the second nanotechnology and infrastructure.382 The literature has focused overwhelmingly on the latter. As such, the current phenomenon of data tagging and hyperlinking realspace (Mixed Reality) remains under-examined. This chapter fills this significant gap and provides a legal foundation for a world dominated not by PerC, but by Mixed Reality.

• 2.3.3 Mixed reality: patching the gap

In place of the converging trends predicted by PerC—that both processors and the data processed will become hyperlocal—Mixed Reality is characterized by divergent trends in the location and access of data. As data becomes available hyperlocally, information is increasingly processed and maintained globally. Data is and will progressively be accessed locally from remote and distributed networks. Whether nanotechnology or pervasive computing ever takes off is of secondary importance. Currently, it is clear that a migration to remote computing, with increased reliance on broadband wireless connectivity, is what lies on the computing horizon. Since developers will continue to create tools that permit consumers to use data maintained and processed on the cloud in hyperlocal applications, this chapter focuses on the legal significance and implications of this technology virtualizing realspace.383

This different approach requires attention to different technologies.384 Prior discussions of pervasive computing have focused heavily on RFID technology: short-range radio that will permit objects to interact with the environment. RFID will play a role, as it currently does, but only in a support role for Mixed Reality apps.385 The relevant technology is the expanding reach of mobile telecommunications broadband networks—Evolution Data Optimized (“EVDO” or “3G”) and Long-Term Evolution (“LTE” or “4G”)—that deliver broadband technology to smartphones and tablets.386

This chapter also fills an important gap in the virtual worlds literature. The virtual worlds literature has not addressed Mixed Reality technologies. This is a significant oversight given that browser and mobile delivery are the fastest growing methods of delivery of virtual experiences. Further, the virtual worlds literature has been characterized by a willingness to treat virtual worlds as a separate reality governed by distinct rules separate from realspace (i.e., the rules of intellectual property).387 Mixed Reality necessarily puts an end to that distinction. Virtual worlds cannot be regulated independently from realspace when virtual objects and places increasingly are a part of realspace itself.

In the Part that follows, this chapter grapples with some of the problems that Mixed Reality applications raise for law, both broadly and as a matter of specific challenges that will arise within individual legal contexts. In so doing, this chapter highlights that the law that governs virtual worlds—mostly intellectual property and licensing law—increasingly supplants or subverts the legal regimes that traditionally govern everyday life.388 What we once owned, we will in the future only license.389 What was once a simple breach of contract may now be a hacking crime or potential copyright infringement.390 The following Sections chronicle the replacement of legal systems designed to secure citizens’ reputational, property, and privacy interests with intellectual property licenses that endanger all of these interests.391

• 3. THE LAW OF MIXED REALITY

The technological revolution of Mixed Reality is well underway. Reality is being hyperlinked, data tagged, indexed, and made searchable in the same way that the bulk of human knowledge was made accessible suddenly and surprisingly through the hyperlinked Internet. The coming legal revolution in response to Mixed Reality will both resolve existing legal debates and raise new, and potentially troubling, questions. For example, a developed theory of Mixed Reality finally puts an end to the enduring and erroneous theoretical idea of the Magic Circle, a metaphorical legal boundary that commentators have supposed separates the real world from virtual ones.392 Virtual worlds cannot be deemed legally separate from the real one.393 All virtual worlds are to some extent mixed: they are experienced by real world people, who interject elements of reality into the virtual world.394 The world may be virtual, but the economic, artistic, and even romantic lives of the participants are quite real.395

Although the Magic Circle is now broken, the legal effects of the Mixed Reality revolution are uncertain. Laws that govern the real world will apply to both elements of the Mixed Reality experience: intellectual property and e-commercial contracts will continue to govern the software and firmware in the devices; real-world property and tort law will continue to govern where users can go and what they can do in the real world. However, the principal issue between these two spheres is the encroachment of IP and e-commercial contracts into realspace via the virtualization of realspace. Will intellectual property law come to govern the extent to which consumers can use their own real and chattel property,396 just as it now governs what applications consumers may use on their own devices? Without a developed theory of Mixed Reality, IP and e-commercial contracts will overtake property and torts in realspace.

To supplement these basic conclusions about the current trajectory of the law, the following Sections analyze the biggest areas of shift by category: contract law, tort law, property law, and privacy law. There are of course other important legal shifts that this chapter must necessarily leave out, if only for space reasons. An example would be free speech: a shift will occur here too, when most of human discourse switches from telephone or email to corporate-controlled social networks, like Twitter, Google+, or Facebook.397 However, the chapter presents selected examples that highlight a pattern in the legal shift: an accelerating trend away from private property and consumer choice in a free market,398 and toward corporate hegemonic control over consumers,399 exercised by the threat of intellectual property lawsuits based on mass-market consumer application End User License Agreements (“EULAs”) or website Terms of Use (“TOUs”).400

• 3.1 Contract Law: EULAs and Intellectual Property Licensing Will Govern Everyday Life

Mixed Reality technologies on mobile computing devices augment our daily lives with rich data. But these technologies also bring the dangerously flawed law of copyright to the real world. The laws governing the licensing of intellectual property were intended to govern intangibles, not the tangible world.401 The basic economic assumption underlying intellectual property law is that expression is costly to produce and cheap to copy.402 This is the foundation of the copyright system.403 Since expressions are so cheap to copy, fewer people would invest time and money in creation. And indeed, many of the early internet fights were about copying.404 The Recording Industry Association of America (“RIAA”) famously sued teens and grandmothers across the nation for copying MP3 files.405

Copying—the driving concern of copyright law—turned out to be a bad paradigm for internet technologies. Internet technologies incentivize users to stream content rather than copy content because it is more expensive to maintain a local copy of a file on your own computer than it is to stream it.406 As a result, the copyright system does little to inform the circumstances surrounding internet technologies. Copyright also serves as a bad paradigm because copyright holders wanted to do far more than restrict their customers from rote copying of copyrighted materials—they wanted control over their customers.407 Beyond the right to control copying, copyright holders often asserted the ability to prevent customers from doing business with the copyright holder’s competitors.408

Unfortunately, copyright law has indulged copyright holders in this regard.409 Early case law in the Ninth Circuit (a critical circuit for online technologies) held that copyright could be used to control behavior in an entirely new set of cases to which it had been previously inapplicable.410 According to these cases, merely loading a computer program for a purpose outside of the software license agreement may constitute copyright infringe-ment.411 Thus, while flipping through a book at a bookstore never implicated copyright law (because no copy was being made), accessing the same material on a Kindle or iPad does implicate copyright law due to the Ninth Circuit’s reading of the copyright statute.412

Shifting a simple breach of contract claim into a claim for intellectual property infringement has several immediate effects. Breach of contract generally generates expectation damages. Copyright infringement, however, entails a statutory remedy system as detailed in 17 U.S.C. § 504(c).413 This statutory regime is the mechanism through which the RIAA can seek millions of dollars in damages from teenagers.414 Each download of a separate registered work constitutes a separate infraction.415 This shift alone significantly increases corporate control over consumer behavior. And the shift from the traditional remedy of expectation damages to statutory damages also changes consumers’ incentives to breach abusive and overreaching online contracts. Where the company’s expectation damages from a consumer’s breach of an EULA are vanishingly small, the statutory damages regime of copyright can turn litigation against one’s own customers from a losing strategy to a profit center.416

The shift away from consumer rights and toward corporate control over consumers’ daily lives via EULAs and TOUs is one of the largest unheralded shifts in law of our generation. Threats of copyright infringement suits417 require consumers to comply with a wide range of restrictions utterly unrelated to the making of copies.418 Facebook provides one example of how copyright law significantly shifts the balance of power to producers from consumers of internet technology. Facebook asserts a perpetual license in all of its users’ private information.419 Facebook also ferociously limits what users can say. For example, a recent academic conference focusing on the use of internet kill switches in stifling speech was itself ironically stifled when it tried to advertise via a Facebook page because Facebook does not permit use of the term “Internet kill switch.”420 One might not be bothered by such decisions were it not that Facebook surpasses email as the means preferred for communication by many Americans.421 Threats of copyright liability—like the threat by Facebook—attach any time someone purchases software, visits a website, or uses a social media site.

As intrusive as copyright licensing is for purely online computing, it is far more so for the next generation of internet technologies—Mixed Reality and mobile computing. Now, there exists the danger that the copyright law dominating online interactions will flow into Mixed Reality and govern its users in realspace. This new breed of online contracts impacts legal regimes across the board because our current system of law permits parties to alter almost any background legal arrangement via consent.422 To enter a digital store a consumer must agree to the store’s terms.423 By remaining on a website, a consumer ostensibly signs a contract. Engaging in online transactions also requires a consumer to agree to the contractual terms and conditions of the site.

For example, on smartphones Google Maps is an indispensable application that permits use of the telephone as a GPS device. But Google Maps, like other Mixed Reality apps, also utilizes GPS technology to track,424 collect, package, and resell the real world physical location of smartphone users to a broad array of third parties.425 To use Google Maps, consumers must consent to Google’s terms, which also effectuates consent to the tracking process just mentioned.426 Under the current legal regime, these tracking activities are protected under the law governing online contracts (EULAs and TOUs) because users have given their consent in order to use the services. But this is a poor legal framework for Mixed Reality because it fails to recognize the “reality” aspect of Mixed Reality and, most importantly, how Mixed Reality applications are coming to affect the real world.

A comparison may clarify: consider the different reactions that Google’s surveillance of its customers received online and offline. Online, Google retains all of its users’ searches, ties them to specific user profiles, and further ties all users’ online browsing habits (whether tracked by Google cookies on the company’s own sites, or tracked through the Google advertising service on third-party sites, or some combination of the two).427 While the practice is met with some criticism, it is generally accepted that users of their services consent to these practices. But a similar practice of data collection, when injected into the real world, got Google into serious legal trouble. Google Streetview cars accessed individuals’ open home wireless networks as the cars roamed around taking pictures for Google Maps, collecting data from those networks.428 Even though the result was basically the same—collection of user data—the fact that the activity took place in a tangible way made a significant difference in the way the practice was perceived. As a result, lawsuits were filed across the United States, and state attorneys general began to investigate the search giant for possible illegal wiretapping and invasions of communication privacy.429 The real difference in this comparison is not between “online” and “offline” collection of data—after all, the Streetview cars tapped into wifi connections—but whether there was the barest figleaf of contractual consent in place. Google ostensibly secures consent for an enormous amount of intrusive surveillance on its customers as soon as users surf to its web page.430 Streetview cars did not have any such contractual figleaf.

The fighting question for Mixed Reality applications will be whether such online contracts of adhesion will finally be pushed down into the real world, such that courts will protect intrusions—like those of the Streetview car—under the theory that consumers have consented to the surveillance.431 Google already engages in online surveillance operations gathering data far more comprehensive than any of the data gathered by Streetview, but it is privileged to do so under a strained reading of contract law.432

We have come full circle. The special set of rules that were originally intended to govern intangible, intellectual property now govern the everyday, walkabout lives of U.S. citizens. American citizens do not functionally own their private information and cannot stop the indiscriminate recording of data about their everyday lives short of refusing to use cell phones and the Internet. What is needed is a robust path forward based on existing, established contract, tort, property, and privacy law. A legal regime not muddled by a strained reading of intellectual property law will protect consumers, scale back untrammeled corporate control of consumer information, and return copyright to its original role of protecting copying of creativity, rather than controlling the economic and intimate lives of citizens. The following Sections explore the issues in other areas of law, before offering proposals for re-balancing the law in Part IV.

• 3.2 Tort Law: Cyberdefamation and Mixed Reality Reputation Systems

The Mixed Reality future will include facial recognition software that is able to access reputational ratings of people the user runs across in her everyday life.433 Tagging real people with data raises obvious issues relating to the law of reputational interests, which acts to protect individuals against the publication of false statements made against their image.434 Where employers now Google applicants, in the future they will merely check the person’s online reputation with a range of online reputation providers and social networks. Once personally-tagged reputation and personal information becomes ubiquitously available to everyone with a smartphone, the temptation to manipulate or poison that information to cause reputational harms will inevitably arise.

Such reputational harms can already be found in the purely online context.435 For example, an early Google bomb—using search engine optimization to prioritize the results of the “bomber” on Google—targeted Senator Rick Santorum.436 Political detractors of the senator created an off-color definition of the senator’s name and then raised the search rank of the alternative result by crosslinking and referencing the neologism.437 The end result was that searches on Google for the senator’s name would find the alternative definition in the first page of results.438

Because the Internet has become the primary purveyor of both personal and professional reputational information, the risk of harm is magnified. Employers Google prospective applicants.439 Social networks like LinkedIn manage professional connections.440 eBay maintains reputation systems for third party vendors, facilitating transactions between parties that otherwise would not trust each other.441

Under the current legal and statutory regime, however, companies that create and maintain reputational networks lack incentive to keep reputational data accurate. This is because § 230 of the Communications Decency Act (“CDA”)442 generally immunizes interactive computing services providers from tort lawsuits stemming from inaccurate data supplied by users of the service.443 Defamation law governs reputational harm offline—where there is no corresponding immunity for providers of reputational information. Thus, online service providers generally avoid liability where offline providers incur liability. This duality makes the existence and proliferation of false or misleading reputational information that much more appealing on the Internet. This Section will explore these problems with online reputation in turn.

An example may help to clarify the current state of the law and the problems Mixed Reality raises. Imagine an online dating website that assures users that its users are unmarried and have not committed a felony. User A lies about her marriage status and criminal record. User B dates user A, and is harmed as a result. Let us also assume that the site knowingly or willfully failed to implement measures that would easily have detected A’s falsehoods. On these facts, the caselaw as to the website’s liability is split.444 Section 230 clearly seems to bar any lawsuit based on the false information that user A entered.445 However, courts are split over whether the site can be held liable for its failure to live up to promises regarding the data added by users.446 Some courts seem to lean toward immunity: since the inaccuracy in the site’s representation was caused by the third party’s false data entry, the site would be immune to any lawsuits for failing to remove false data.447 Other interpretive approaches might lean in the opposite direction, reasoning that the claim that the dates were “safe” was itself a representation by the company, not a representation by a third party user of the site.448

This system of online content management leads to very strange incentives. The corporate curator of a reputation network has immunity from suit based on third party false representations of trustworthiness,449 but also directly profits from a high overall reputation average within the network. For example, new apps in the Android app market appear to receive a five-star rating at the outset.450 This rating is then modified by third party reviews of the software. The overall sense that this generates is that Android apps are high quality and safe, when the reality is that many are merely new. In fact, due to Android’s popularity, dangerous and fraudulent apps are at an all-time high451 and benefit disproportionately from the appearance of trustworthiness that the Android market creates. Legal precedent appears to incentivize the network to make untrue statements about the high level of trustworthiness of the network. This exacerbates the tension between the network’s financial stake in a good reputation and the very point of such a network (to help users detect bad actors). Even if a bad actor’s false inputs into the reputation network render the reputation provider’s statements untrue, there is a high likelihood that network provider will be immune from liability.452

This leads back to the problem of online licensing and increasing control over consumers. At the same time that copyright law has given online service providers unprecedented power over consumers, courts have also granted providers unprecedented immunity against even claims based on the companies’ own promises. Consider a standard online EULA or Terms of Use contract. That contract can impose strict controls on the consumer, on pain of copyright infringement and statutory damages. But the return promises of the company to keep the network safe or to provide accurate reputational information regarding other users of the network may well be largely unenforceable under CDA § 230.453

The advent of Mixed Reality technologies will aggravate this liability imbalance significantly. Again, the core example is mobile technology that can recognize another person and then report reputational data to the user. Facial recognition technology is already being built into mobile devices.454 And such technology does not merely recognize the device’s user, but it can also recognize people in photographs that the user takes. Technologies like Face.com’s facial recognition software are already combing online photo albums and identifying anyone who appears in the photographs.455 Google+’s picture and video uploads are particularly aggressive—if the user is not cautious with permissions, Google+ will automatically upload pictures and movies from the user’s telephone, and all future pictures and videos will be auto-uploaded.456 Facial recognition is a standard mixed reality application, in that it takes indicia from the environment (here, the target face) and augments it with data (here, the person’s reputation). The confluence of facial recognition, reputation, and mobile technologies will push problems of online reputation down to the personal level. Where once an employer had to be at a desk to Google your online reputation or check your social networking sites, now facial recognition will seamlessly integrate the process of online reputation into real life. Without progress in the law, the current legal framework governing reputation networks will replicate the same perverse incentives for Mixed Reality reputation systems that it has generated for online reputation networks. Consumers will bear a disproportionate amount of liability pursuant to the EULAs and TOUs of Mixed Reality applications, while their creators will largely be immune from liability.

• 3.3 Property Law: The Digital Land Wars

Mixed Reality augments real world objects, places, and people with virtual experiences. The augmentation of objects and places necessarily implicates property law. Imagine that someone “augments” your house with a virtual tag that contains an obscene word viewable through a Mixed Reality application. Can you assert rights as a property owner to remove the offensive virtual sign?457 This Section tracks property shifts in response to technology and predicts shifts based on emerging Mixed Reality applications.

One perennial feature of the digital landscape is that of the digital land war.458 The cycle goes as follows. First a range of options for the location of information is proposed. There is a divergence, and many different locations, applications, or networks are considered candidates for the “best” piece of internet real estate. There is then convergence once one address, application, or network becomes the “best,” and people shift attention to it. Once attention shifts to only one address, application, or network, legal battles then follow as the owners of pre-existing property rights try to take the prime pieces of internet real estate away from the people who bet on the right technology.459

For example, early in the Internet’s development, there were a few different top-level domain names. Some of these were restricted, like .mil and .edu. Some were general, like .net, .org, and .com. It was not immediately apparent that a .com domain name would become the most valuable piece of land on the Internet. It was only after the cycle of divergence—multiple top-level domain names existed—and convergence—to the .com domain name as the first choice of the searching consumer—that the legal wars over the .com domain names began. When they did, they did so in earnest, with Congress enacting legislation in support of the rights of trademark owners,460 allowing them to take domain names from people who had registered them. The Anticybersquatting Consumer Protection Act permits the owner of a registered trademark to take a domain name that references the mark away from the registering party.461 This permits trademark owners to wipe out free riding by parties who wish to use the trademark to sell goods, but it also gives the trademark owner another tool to quell critics of the trademark owner, or critics of the goods and services that the owner sells.462

These land wars are far from settled. Another wave of land battles occurred over the use of metadata—mechanisms to drive customers to one site or another via search engine optimization.463 Another modern-day wave is “Twitterjacking.”464 As Twitter became a social networking phenomenon, certain Twitter handles became valuable property. Immediately following the BP Gulf oil spill in 2010, some enterprising individual registered the handle “BPGlobalPR” and began a series of sardonic, self-involved, and hilarious tweets supposedly on behalf of BP.465 It is not immediately clear that BP has the right to any Twitter handle that contains its name, especially ones that are being used for parody, or to convey truthful critical consumer information to the market.

The land wars continue in the sphere of Mixed Reality. For example, land wars are currently being waged over geolocated data tags. Yelp, a company that places GPS-located tags on businesses, includes reviews from ostensible customers. Litigation is now pending in New York against Yelp. The plaintiffs’ goal is to force Yelp to remove negative reviews and stop removing positive reviews that are geotagged to the plaintiffs’ businesses.466 Furthermore, some European countries have voiced unrest because of the lack of control over the virtual representations of houses and property in Google Earth and through Google Maps.467

A coming wave of digital land wars will likely involve mirror worlds. Mirror worlds are virtual worlds that mirror the real world. The full 3-D version of Google Earth is a good example. With the latest software, consumers can see 3-D representations of buildings and view real-time relays from cameras at specific locations.468 Fights over data tagged mirror worlds will be intense. Imagine if a global anarchist protest movement grabbed the mirror world location of local Wal-Mart stores and targeted them for mirror world protests by tagging the GPS location with anti-Wal-Mart facts and slogans; or imagine if members of the Occupy Wall Street movement tagged the locations of Wall Street firms with accusations and criticisms.469 Consider the virtual defacing of a political headquarters in lieu of the more traditional brick through the window.

The land wars leave open a number of legal questions. The first question is whether owners of intellectual property rights—here, generally trademark owners—should be permitted to take prime internet locations away from first movers. Second, and more significantly, the land wars leave open the question of whether intellectual property law is itself the correct legal framework to apply.

The law of intellectual property tends here, as elsewhere, to exacerbate the trend towards increasing corporate control at the expense of protecting individuals. For example, imagine that a user Twitterjacks@Fairfield begins to tweet as this chapter’s author. The author does not have the kind of celebrity that would give rise to a misappropriation of likeness claim, nor trademark or other IP ground on which to assert a claim to ownership of this new internet real estate. Yet Fairfield Inn & Suites would have a reasonable expectation of success in seizing the Twitter designation from a new registrant if someone were to register @Fairfield and begin tweeting hotel deals.470 Thus, while I must register @Fairfield preemptively to protect my online persona, intellectual property owners often have the luxury of waiting to see which emergent technologies become dominant and then moving to secure the most valuable digital real estate. This gives IP holders a significant advantage.

Mixed Reality will only intensify the trend towards corporate control. As Mixed Reality causes real and virtual experiences to converge, there is a serious risk that the “virtual” rights holders (IP owners) will prevail and that “real” rights holders (real people and owners of physical property) will lose out. Further, Mixed Reality is inherently a multi-channel exercise: which applications and which channels within those applications will become dominant is anyone’s guess.471 However, once an application or channel does become dominant, those users who first adopted a technology run the risk of being sidelined in favor of IP holders. And interestingly enough, real property owners—the owner of the hypothetical defaced house in the example above, for instance—do not have any such strengthened rights regarding their real world property.472

• 3.4 Privacy Law: Privacy’s Death and Resurrection

The advent of mobile computing has enabled the totalitarian dream (or nightmare) of tracking citizens at all times. For the most part, however, it is not the government that tracks citizens. Tracking is largely accomplished through the technology consumers themselves use.473 Tracking technology is rampant and widespread. Google Streetview cars captured unencrypted personal data as the cars passed private homes.474 Facebook initiated an open architecture for its developers that permits almost anyone to capture large amounts of information through an app installed by a friend of a friend.475 GPS-enabled cell phones constantly record the real-world locations of their users.476 Internet service providers do the same, tracking their customers across the digital landscape.477 It follows that mobile broadband providers can not only track users’ physical locations, but also correlate those locations with the users’ online browsing habits.

Likewise, even our friends and family can track us using widely available technology. As soon as one person takes a photograph and uploads it to Facebook, facial recognition technology can recognize and tag the people in the photograph with metadata (often including date and real-world physical location).478 The government need not do much more than ask for this information from the mass of third parties who have already collected and indexed it.479

A discussion of online privacy is necessary in the context of Mixed Reality because Mixed Reality technology permits companies and governments to know not only a person’s digital profile, but also his real-world habits.480 There is nowhere to hide. Offline, real-world activity is now coded and recorded, parsed, and re-sold—thanks to the integration of Mixed Reality applications in our everyday lives—just as online activity has

been. Where I drive every day can be cross-compared to my web surfing habits.481 Where a consumer walks during the day is as marketable as which websites she has visited—and a combination of the two is more potent still.

Mixed Reality makes privacy increasingly elusive and unattainable. In fact, some urge that those who care about privacy should give up networked technologies. Former Google CEO Eric Schmidt implied that users who do not want to be tracked by Google all across the Internet, including any site that serves Google ads reporting back to Google, should simply not use the Internet.482 Thus, in more recent years the move by privacy advocates has been to move some activity off the grid, or at least out of the reach of datamining corporations.483 The advent of Mixed Reality technologies forecloses even this option.

3.4.1 Privacy is dead, long live privacy

The ubiquity of technology that constantly tracks consumers’ realspace movements and cross-references them with online activity has caused government and corporate actors to declare that “privacy is dead.”484 This Section explores the questions of whether privacy is in fact dead, whether Mixed Reality and mobile computing killed it, and what can be done about the current bleak situation. This chapter takes the position that privacy is not an end state, but rather a point on a sliding continuum between secrecy and disclosure. Because privacy is a tension point, rather than an absolute category, it is inaccurate to state that privacy is dead.485 Rather, the effects of mobile computing on privacy are a side effect of the nature of information systems used to locate, retain, and distribute information.

Since people will always seek to keep some information confidential and other people will always seek to discover or disclose it, we can quickly dispense with the “privacy is dead” paradigm. “Privacy is dead” is simply the battle cry of consumer disempowerment. To the extent privacy is dead, it is dead because the law has prevented consumers from getting and using the tools necessary to protect their personal privacy.486 For example, it still is nearly impossible to surf the Internet securely,487 or to make use of a cell phone without constantly revealing physical location or personal and financial information.488 The goal, then, should be to provide consumers with the simple, built-in tools necessary to protect privacy.

• 3.4.2 Privacy by design

The FTC has made much of “privacy by design.”489 This is an important meme to explore because it is both widespread and ineffective in securing privacy. Technologies that have been designed from the ground up to collect, package, and sell information cannot “by design” keep that information private. This Section explores the privacy by design meme, critiques it, and then discusses some more viable alternatives in the following Sections.

Privacy by design is an incorrect approach for two reasons.490 First, the idea that privacy needs to be designed complicates a very simple problem. Corporations do not need to design for privacy because corporations do not need to record their customers’ information in the first place. The need for privacy design arises only because the existing technologies have already been designed to gather and sell customers’ information. Once one rephrases “privacy by design” as “designing systems and services with the purpose of collecting and disseminating information to not collect or disseminate information,”491 the futility of the approach becomes apparent.492 Thus, the first reason that privacy by design has not produced privacy online is because the technologies have been designed not to allow for privacy.

The second, and related, reason is that the privacy options that consumers do have are designed to be too expensive in terms of the time and attention required to use them.493 For example, industry advocates continue to argue against regulatory enforcement of a browser “do not track” flag that would follow the model of the quite successful federal “do not call” list.494 Instead, consumers must navigate a different privacy architecture for each application provider, online service provider, and software developer. Drawing an analogy to the telephone context is instructive. Prior to the do- not-call list, each telemarketer was required to maintain and honor lists of people who did not wish to be contacted. Yet the sheer weight of informing each telemarketer (never mind the telemarketers who ignored the rules) made it such that telemarketing was hardly impacted. A unified, simple do-not-call list permitted consumers to express their preferences just once, rather than serially on the phone serially with each one of a thousand different callers.

Privacy by design is to some degree contradictory because the current commercial data architectures are in fact mechanisms for collecting, packaging, and reselling consumers’ private and personally identifiable data.495 Further, the privacy options that online users do have are designed to exhaust and confuse the user by requiring them to understand and address their privacy concerns with each vendor separately.496 Privacy by design is a system designed not to work.

• 3.4.3 Privacy as control

The solution to the privacy problem is simple, default, universal, and legally enforceable consumer controls for privacy. Consumer control is not only necessary; it is an effective solution in light of changing consumer conceptions with regard to privacy. Consumers are coming to treat privacy as a matter of control rather than an absolute prohibition on disclosure.497 A consumer control regime would, as it should, allow consumers to sell their personal information and allow internet companies to use it.498 If implemented, effective consumer-side privacy controls can provide a true market in information.

Additionally, the decision as to whether or not to permit online or offline tracking can more easily and effectively reside in the customer’s hands. This is clear in light of the unworkable alternatives to consumer control of privacy. The current regime of privacy policies (that contain no privacy protections) and EULAs (that bury invasive privacy terms twenty pages deep in electronic documents) has proved unworkable. Similarly, leaving privacy controls in individual companies’ hands has proven to be a longstanding fox-in-the-henhouse type failure.

Implementing a consumer control regime would be relatively easy. A simple, expedient solution such as legally enforcing the “do not track” flag already available in browsers would do the trick. A consumer-side “do not track” option would test the economic arguments of privacy naysayers. These naysayers argue that there is no privacy because consumers do not want it, or at least that consumers want products more than privacy.499 For example, Eric Schmidt has stated in relation to Google Streetview that “[i]f you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”500 Milder versions of the same strange argument include the assertion that consumers who do not wish to be tracked are free to not use Google, or are free not to use the Internet, or are free not to use the telephone. And with the advent of mobile computing technology, we might say that a consumer who does not wish to be tracked and recorded is free not to leave her house.

The market for consumer privacy has yet to be tested because “privacy by design” policies shift all of the transaction costs of privacy onto consumers. To discover what consumers make of privacy online, the transaction costs of privacy should be shifted from consumers to the owners of internet technology. Shifting the transaction costs from consumers and offering consumers simple and legally enforceable control over online and offline privacy would also test the argument advanced by some in the internet technology industry that citizens do not want privacy.501 And if internet technology companies like Google refuse to respect consumers’ privacy settings, companies will have the choice to not offer service to those consumers.

A true market for privacy requires customers to have market choices that are not overwhelmingly burdened by transaction costs. The self-regulating approach to the private information market in the United States characterized by decentralized, complex, and unenforceable privacy controls has resulted in full market failure. Simple, legally enforceable, default consumer-side browser-level protections for consumers will remedy this problem by centralizing decision-making in consumers, rather than in corporations or the government.

Privacy as control represents an alternative to privacy by design.502 Privacy as control assumes that consumers have effective, unitary, and legally enforceable controls in their own hands,503 rather than scattered, complex controls that vary according to each service provider.504 This vision of true consumer control over privacy is particularly important in the Mixed Reality context. Without real control over information, consumers will be every bit as subject to constant tracking in their real lives as they are now in their online habits.

• 4. BALANCED LAW FOR MIXED REALITY

Mixed Reality merges the real world and cyberspace. It presents exciting opportunities for consumers to augment realspace with rich virtual experiences. But the merging of real and virtual worlds also presents a basic legal problem. Law online has ventured far away from its offline roots. There is a very real risk that as virtual and real merge, the law intended to govern intangible assets will come to govern everyday life.505 The law governing intangible assets was not designed to apply to the real world. If and when it is applied to the real world, the result will be extremely problematic. The specialized law of intellectual property and online contracting is not the best rule set from which to draw rules about everyday human life. Real world analogies, not online analogies, are the best source for legal rules governing the convergent technology of Mixed Reality.506

Solutions that have proven useful in law historically should be applied to the emerging legal problems generated by Mixed Reality.507 The law has long-evolved internal checks and balances. For example, the common law has long imposed restrictions on how much control an intellectual property owner may assert once she has sold a product.508 Similarly, the law has long set basic limits on contracts—limits that should be given new life in the online context generally, but also particularly in the context of Mixed Reality. Very little is needed to solve one of the major problems, that of protecting consumers’ data. Here the law need only enforce consumers’ expressed preferences to maintain their privacy and reject the pernicious myth of consent to the sale of personal information. Simple, unitary, default, and legally enforceable privacy controls will generate a much better market in consumer information.509 The following Sections demonstrate through three examples that the law of intangible assets applied online should not be applied to Mixed Reality applications.

4.1 Constraining Intellectual Property

The first and largest problem that this chapter has identified is that as virtual and real legal interests merge, the law appears set to grant far greater rights to intellectual property holders than it does to holders of other legal rights, like personal dignity or real property.510 Copyright law is the main culprit, but other areas of intellectual property are also at fault. For example, as seen in Section 3.3, supra, owners of trademarks have a decided advantage in the race for prime online real estate.511

The law has already developed checks on the ability of an intellectual property holder to exert continuing control over its customers once it has sold its product, but courts have not applied these checks to online law.512 Copyright is meant to prevent copying. Once a copy is sold however, a copyright owner no longer has the power to control the copy. This is the common law doctrine of “first sale,” which has been enshrined in the Copyright Act.513 The doctrine hinges on whether a copyrighted work has been “sold” or merely “licensed.” The answer to this question is complex, and courts rarely get it right. Again, online law has diverged strongly from offline law. For example, although Netflix can buy a physical DVD and rent it out to any customer (thus ensuring that almost any program or movie is available through Netflix’s mail service), Netflix must seek individual license deals on a per-provider basis in order to stream the very same content. Thus, while Netflix’s ability to use the physical copy of the same movie is not restricted, its ability to utilize an online copy is curbed by licensing and copyright law—in this case, the IP holder has much more power over the online version.

There is, however, one interesting development. Courts seem to draw a distinction between electronic data that is recorded or embedded in a physical medium, and data that is merely free flowing.514 This is an improper distinction from a functional point of view: there is no relevant distinction between a song encoded on a CD and a song downloaded as an MP3. Yet courts continue to apply real world physical analogies to digital goods embedded in physical objects and apply the law of intangible assets to digital goods that are not so embedded. Thus, while a consumer may record movies on her TiVo, there is a serious question as to whether she may record a streaming movie with a virtual VCR.515 Similarly, recent cases in the Ninth Circuit indicate that although a seller may not resell copies of a computer program on e-Bay (since the original license agreement purported to prohibit such resale),516 she would be free to sell music CDs that purported to have the self-same restriction.517 The presence of some physical element—here the TiVo physical box or the music CD—seems to provide courts with some comfort that analogies to the law of the sale of physical objects is a better analogy than the law of licensing of intellectual property.

These cases may provide a ray of hope for Mixed Reality. Although the data is tied and not embedded, there is hope that the link to the real world may make courts more likely to use analogies drawn from the full range of law, rather than analogies drawn solely from online intellectual property law.518

• 4.2 Limiting Online Contractual Control

The second step to returning balance to the law as cyberspace and realspace merge is to restore balance to online contract. Reducing the application of intellectual property law and increasing the application of traditional principals of contract and property law can largely restore balance in online contracts.519 This will return contract law to its normal place within the constellation of legal tools as the tool of bargained-for exchange and expectation damages.

As things stand, online contracts often implicate intellectual property statutory damages that have no relation to actual damages. For example, when a user modifies her physical gaming console in violation of an EULA, the console seller can pursue statutory damages for direct and vicarious copyright infringement. However, if traditional principles of contract law applied, the console seller would be limited to contract damages. The latter approach follows logically because the gamer owns her console and should be able to do with it what she will.

A return to basic principles of contract law has also generated promising trends elsewhere in the law. A related area in which intellectual property control over contracts is being scaled back is in circuit courts’ interpretations of the Digital Millennium Copyright Act (“DMCA”).520 Here, the intersection between contract and copyright occurs in the anti-circumvention systems used to protect the copyrighted materials. A click-through contract (the classic “click I Agree or exit”) can serve as both a binding contract and as a technological protection measure,521 since the content governed by the contract cannot be accessed without going through the contract.

If the DMCA’s prohibition on circumvention of such protective measures is relaxed, users can make use of their programs on their own devices despite overreaching contract terms. Interestingly, here too courts have been persuaded by analogies to physicality to relax the prohibitions of the DMCA.522 Whereas hacking into a purely electronic software program seems to be a clear violation of the DMCA,523 bypassing protections embedded into physical objects receives more lenient treatment. Indeed, the Library of Congress recently added anti-circumvention exceptions to the DMCA that would allow users to alter their smartphones to use unofficial but legally-obtained software.524 The Court of Appeals for the Sixth Circuit held that circumventing controls that limited the number of times that a user could refill printer cartridges that she had purchased was not a violation of the DMCA.525 Similarly, the Federal Circuit held that a universal garage door opener that bypassed the garage door manufacturer’s rolling numeric access code did not trigger the sanctions of the DMCA.526 It may seem obvious that universal remotes do not violate anti-hacking laws, but legally speaking the issue is an extraordinarily close one, since software is embedded in the remote. Courts’ willingness to give weight to the consumer’s expectation that a garage door would be compatible with universal remotes over the strict letter of the DMCA affirms the importance of consumers’ property rights and expectations with respect to their own property.

Two ancient but basic limits on overreaching contractual control are slowly coming back into fashion online: consideration and its cousin, illusoriness. The common law has long declined to look into the value of a particular bargained-for exchange, but has instead used the doctrines of consideration and illusoriness to ensure that some bargain was indeed struck—that promises were made on both sides.527 But in the online context it is not clear that enforceable promises are being made on both sides. EULAs and TOUs are lists of promises that the user makes. Ostensibly, the return promise by the corporation is that it will permit the user to access a valued service. But courts are increasingly questioning contracts that contain unlimited modification clauses.528 These are a staple of online contracts, but they are becoming more and more dangerous for companies. Judges have begun to reason that if a company is free to change the EULA or TOU at any time and in any way, then the company has not made any true return promise.529 This is an important legal development since it increases the odds that the contract to which a consumer agrees will state the actual responsibilities that may eventually be enforced against the consumer. Similarly, such legal rulings increase consumers’ confidence that the return promises of the company are equally enforceable.

Constraining overreaching contracts—especially those contracts that forbid the user to customize or accessorize her own property—is essential for Mixed Reality. Mixed Reality devices will increasingly control how users view the world around them. They are the access point for users’ ability to see the data-enriched experiences that augment real places, people, and things.530 The devices that control Mixed Reality experiences must be firmly in citizens’ hands. Owners of Mixed Reality devices must be able to modify those devices in order to control the reality that they experience. The alternative is imaginable but unthinkable: just as Sony now claims that it has the sole right to control what players experience via its gaming console, on pain of criminal sanction and intellectual property infringement, so Mixed Reality providers would claim the ability to control the very reality that citizens experience and share.

• 4.3 Returning Control over Privacy to Consumers

In the privacy context, a very simple but fundamental rebalancing of contract law as applied online will resolve many problems. Privacy is handled as a matter of contract under U.S. law.531 That is not the problem. The problem is that the law of contract as applied online has denied consumers the power to draft contracts. Even in the strangest circumstances, courts enforce contracts written by corporations, including legal language contained on pages that the user has not even seen.

Yet that reasoning ought to cut both ways. Citizens—as parties to a contract—have as much of a right to add binding terms to a contract as corporations do.532 If a consumer sets a “do not track” flag in her browser, courts should enforce it as a matter of contract law. Courts have long held that consumers “agree” to online contracts by continuing to use a website or online service.533 It would be nonsensical not to apply the same logic to a corporation: by continuing to provide service to a customer who has set a “do not track” flag, the corporation should be legally bound by that term.534

This proposal is of course not uncontroversial, but it exposes the poor reasoning underlying the law of online contracting.535 Functionally speaking, under current law only corporations are allowed to draft online contracts. Citizens are only granted the pro-forma right to agree to pre-set corporate terms. Citizens are denied a voice in setting the terms under which their information is gathered.536 It is this perverse state of affairs that we must correct before the law of online contracting can govern everyday life.

Giving consumers control does not mean that control should be complicated. To impose all of the transaction costs of privacy protection on consumers—the current state of affairs—is planned failure. In order for consumers to be able to express their preferences effectively, privacy controls must be simple, unitary (in one place, applicable to all counterparties), default, and legally enforceable.537 Only under these circumstances will the transaction costs of private agreement over privacy be manageable for consumers. The alternatives are significantly less attractive: outright paternalistic government regulation on the one hand, or the current wild west of data protection on the other.

The advent of Mixed Reality technology makes this return to consumer control over personal data of significant importance. Consider the average smartphone, which comes pre-loaded with numerous apps, each of which has different permissions to track the consumer’s real-world location, social network interactions, and even tap into the basic reality that the consumer is experiencing—what she is hearing and seeing.538 Consumers must have control over their own reality, and this includes the ability to control their own information as it is propagated through these networks.

• 5. CONCLUSION

The proposals here are not exhaustive. Rather, they are examples of potential benefits to be gained through application of a method. That method involves applying the common law approach—reasoned, careful, limited, and iterative decision-making based on the closest legal analogy—in order to find potential solutions to emerging technological problems.539

Mixed reality tools are pushing intellectual property regimes into realspace. In some senses, this is nothing new. Books are real, and intellectual property governs our ability to copy them. But the law of intellectual property licensing online has drifted from its moorings. Offline, the law of copyright has generally been limited to restricting the ability of a buyer to make copies, perform unlicensed performances or screenings, or create nonparody derivative works. Not so online, where copyright law has the ability to control the social rules of multiple-million member online communities. Mixed Reality technology brings this online over-extension of copyright licensing back into everyday life.

As Mixed Reality merges virtual experiences with everyday life, there is a very real risk that courts will continue to draw on the law of online intellectual property licensing. The confluence of the judicial acceptance of pro forma corporate contracts coupled with the strength of contracts backed by out-of-proportion copyright infringement damages means that the law of online contracting and intellectual property licensing is a terrible fit for offline, everyday life.

In everyday life, when a consumer buys a car, the consumer expects to be able to paint it any color. Yet when a consumer buys a garage door, there is a non-trivial question of law as to whether the manufacturer of the garage door may force the consumer to buy new remote controls from only the garage door manufacturer. And when a consumer buys a Playstation 3, there are very real legal threats from Sony when the consumer modifies her own property and teaches others how to do the same.

This overextension of copyright licensing and online contracting law is undermining property rights in the real world, providing perverse incentives for online reputation purveyors to whitewash the reputations of network users, and burying consumers under thousands of differing privacy policies, many of which are not enforceable or which may be changed at any time by the software provider.

But there is hope. This chapter proposes applying simple rules evolved in the full context of real-world situations to merged virtual and real experiences. A consumer’s property interest in her goods should permit her to make aftermarket modifications of her own property. A copyright holder’s rights in a given copy should be exhausted when the copyright holder sells a given copy away, never mind that the transaction is spuriously characterized as a license. And history has shown that consumers not only want privacy but can enforce their preferences quite effectively. However, consumers must be granted simple, unitary, and default tools that permit them to have an active say in the information gathering regimes to which they are subject, rather than the option to pick which one of a set of corporate-drafted terms they may agree to.

As Mixed Reality merges virtual and real space, it provides serious challenges to law, but also offers serious hope. The law of intellectual property as applied to the real world is subject to traditional constraints that render it much less problematic than the unconstrained law of intellectual property as applied to Mixed Reality. The law of contracting in the real world grants both parties, not just corporations, the ability to contribute terms to the contract. Consumers actually can police their privacy quite effectively, if given simple, opt-in, and default options to do so. Mixed Reality opens the door to the application of common sense rules that have very effectively mediated the tensions between corporation and consumer, citizen and state. Mixed Reality need not be a dystopian vision. It may be the method by which we can restore balance to the law.

SOURCES

Cases

Barnes v. Yahoo!, Inc., 570 F.3d 1096, 9th Cir.(Or.), 2009

Bowers v. Baystate Technologies, Inc., 320 F.3d 1317, Fed.Cir. (Mass.), 2003

Bragg v. Linden Research, Inc., 487 F. Supp. 2d 593 (e.D. Pa. 2007)

Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121, 2nd Cir. (N.Y), 2008

Chamberlain Group, Inc. v. Skylink Technologies, Inc., 381 F.3d 1178, Fed.Cir. (Ill.), 2004

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CompuServe Inc. v. Cyber Promotions, Inc., 962 F.Supp. 1015, S.D.Ohio, 1997

Davidson & Associates v. Jung, 422 F.3d 630, 8th Cir.(Mo.), 2005

Davidson & Associates, Inc. v. Internet Gateway, Inc., 334 F.Supp.2d 1164, E.D.Mo., 2004

Doe v. MySpace, Inc., 528 F.3d 413, 5th Cir. (Tex.), 2008

Doe v. SexSearch.com, 502 F.Supp.2d 719, N.D.Ohio, 2007

Dyer v. Northwest Airlines Corporations, 334 F.Supp.2d 1196, D.N.D., 2004

eBay, Inc. v. Bidder’s Edge, Inc., 100 F.Supp.2d 1058, N.D.Cal., 2000

Fair Housing Council of San Fernando Valley v. Roommates.Com, LLC, 521 F.3d 1157, 9th Cir. (Cal.), 2008

Harris v. Blockbuster Inc., 622 F.Supp.2d 396, N.D.Tex., 2009

In re Jetblue Airways Corp. Privacy Litigation, 379 F.Supp.2d 299, E.D.N.Y., 2005

Lexmark Intern., Inc. v. Static Control Components, Inc., 387 F.3d 522, 6th Cir. (Ky.), 2004

MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511, 9th Cir. (Cal.), 1993

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MDY Industries, LLC v. Blizzard Entertainment, Inc., 629 F.3d 928, 9th Cir. (Ariz.), 2010

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ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 7th Cir.(Wis.), 1996

RealNetworks, Inc. v. Streambox, Inc., 1999 WL 1448173, W.D.Wash., 1999

Recording Industry Ass’n of America, Inc. v. Verizon Internet Services, Inc., 351 F.3d 1229, D.C.Cir., 2003 Recording Industry Ass’n of America v. Diamond Multimedia Systems, Inc., 180 F.3d 1072, 9th Cir. (Cal.), 1999 Reit v. Yelp!, Inc., 907 N.Y.S.2d 411, N.Y.Sup., 2010

Rosenberg v. Harwood, No. 100916536, 2011 WL 3153314 (D. Utah May 27, 2011)

Triad Systems Corp. v. Southeastern Exp. Co., 64 F.3d 1330, 9th Cir. (Cal.), 1995

UMG Recordings, Inc. v. Augusto, 628 F.3d 1175, 9th Cir. (Cal.), 2011

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Wall Data Inc. v. Los Angeles County Sheriff’s Dept., 447 F.3d 769, 9th Cir. (Cal.), 2006

Statutes and Regulations

Communications Decency Act, 47 U.S.C. § 230(c)(1), (e)(2) (2010)

Digital Millennium Copyright Act, 17 U.S.C. § 1201(a)(1)-(2), (b)(1) (2006)

In re Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993 (DataTraffic Growth), 25 FCC Rcd. 11407, 11412-25 (2010)

Pub. L. No. 106-113, S 1000(a)(9), 113 Stat. 1501, 1536 (1999) (enacting into law § 3002 of the Intellectual