Document Type



Presented at the 4th Inter-University Graduate Student Conference at Cornell Law School, March 2008.


Over the past several years scholars have wrestled with how property rights in items created in virtual worlds should be conceptualized. Regardless of how the property is conceptualized and what property theory best fits, most agree the law ought to recognize virtual property as property and vest someone with those rights.

This article moves beyond the conceptualization debate and asks two new questions from a new perspective. First, how ought virtual property rights be allocated so innovation and creativity can be maximized? Second, how can the law be changed to remove barriers that unnecessarily impede a regime that maximizes creativity and innovation in virtual worlds?

As to the first question, there is evidence supporting the notion that users creating virtual property should be the owners of the virtual property rights. However, strong counter-arguments exist showing that ownership by developers may best promote cumulative innovation and creativity. Nonetheless, what is clear is that there exists a potential for an innovation-maximizing regime that is different from what commonly exists today. This is where the second question comes into play.

As to the second question, the current state of the law causes virtual world developers to be unwilling to relinquish their hold over virtual property rights. Developers' reluctance to do so results from fears of liability, loss of control, and being forced to create at a more rapid pace so as to keep users interested. To relieve these concerns and open up the possibility for a regime that may put virtual property in the hands of those who will maximize innovation and creativity, this paper urges the creation of a safe harbor which provides enough incentive for developers to choose to hand over some control and explore property allocation regimes that may maximize innovation and creativity.

Date of Authorship for this Version

March 2008


Virtual property ownership