Virtual Property, Virtual Rights: Why Contract Law, Not Property Law, Must be the Governing Paradigm in the Law of Virtual Worlds

Virtual worlds such as World of Warcraft and Second Life have recently exploded in popularity. As users of these worlds acquire virtual assets, conflicts inevitably arise. These conflicts are currently resolved through the terms of End User License Agreements (“EULAs”) between users and developers. Many commentators, however, criticize EULAs as being too one-sided and argue for courts to acknowledge traditional common law property rights in virtual property. These arguments invoke three theoretical justifications for virtual property rights: Lockean labor theory, personhood theory, and utilitarianism. This Note argues that each of these theories is a poor fit for virtual property, and that contract law should remain the dominant paradigm. There is demand for virtual worlds with a wide variety of user rights, and, unlike generally applicable property law, a EULA-based contractual scheme allows the developers of virtual worlds the flexibility to efficiently respond to such demand.