Potential Liabilities Faced by MMOG Developers

Terra Nova just posted an article about a recent change in Second Life that has effectively devalued the property of many SL denizens. The article quotes a lawyer who cites established legal precedent to explain why Linden Lab (developer of SL) may be at legal risk in this (and related) matters. The basic argument: LL gave users good reason to think that some virtual land plots are worth more than others, so LL can be held liable for actions that devalue the land, no matter how many waivers users agree to when playing SL.

This is just one of the many unresolved legal issues popping up for MMOGs, and especially MMORPGs. I couldn’t find a good, succinct list online, so I’ve compiled one:

1. What happens when one player steals another player’s property?
2. What happens when players generate content that infringes upon the copyrights or trademarks of real-world companies? (Here’s an example other than City of Heroes). For that matter, what happens when one player copies another player’s work? Can they sue each other, and/or the developer?
3. What happens when players (especially underage players) engage in “legally indecent” acts? Can EA (developer of Sims Online) be sued for letting a ten-year old operate a virtual brothel? Can it be sued by players who suffer real financial damages at the hands of a virtual mafia?
4. Can developers be sued for impeding free market forces that generate real monetary value for players? (An especially interesting question, given that those forces are the key to many other potential liabilities on this list).
5. What forms of gambling are permissable in an MMOG? Is it really legal for me to play slots in Second Life, given that SL currency has real world value?
6. Do players have a right to free speech and expression? Can game EULAs contain (and developers enforce) a morals clause, like those in some employment contracts?
7. At what point (if any) does a developer become liable for failing to prevent players from harrassing other players? What constitutes sexual harrassment?
8. If virtual property has tangible value, how badly does a player need to violate a game’s EULA before a developer may evict them… without compensation for their virtual property?
9. Can players use legal means to prevent the deactivation of an MMOG, or to force developers to open source a game prior to deactivation? (i.e. to protect the value of their property?)

I wonder how long it will be before the first in-game court system pops up in an MMOG….

PS. If I’ve missed any notable legal demons, don’t hesitate to comment.