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10 Intell. Prop. L. Bull. 13 (2005-2006)
Rivalrous Consumption and the Boundaries of Copyright Law: Intellectual Property Lessons from Online Games

handle is hein.journals/iprop10 and id is 19 raw text is: Rivalrous Consumption and the
Boundaries of Copyright Law:
Intellectual Property Lessons
From Online Games
By ANDREW D. SCHWARZ AND ROBERT BULLIS*
When fantasy and reality collide, what laws should apply? Online
fantasy games are spawning real-world markets in which players can
trade cash for objects (such as swords with special powers) in the fan-
tasy world. The objects only exist in the game world, typically on a
server that is owned by a company such as Sony. Should Sony have
the absolute authority to license the game and its objects without re-
striction? Or should the players, who invest time, effort, and skill into
the game to obtain the objects have the right to sell to other players
for real dollars? This article addresses whether the fantasy sword is
more akin to a book which under copyright law can be sequentially
resold, or a digital song download which cannot. The authors suggest
that the critical distinction between digital media that needs special
protection and other digital items that do not, is the concept of
rivalrous consumption (whether for copyright or antitrust issues). In
essence, whether a given consumer can sell his or her sword and swing
it too.
Section I of this article documents the growth of virtual worlds
and the corresponding emergence of real-world commercial trade in
virtual objects. Section II outlines how game publishers, such as Sony,
have been applying the law of intellectual property to control the be-
havior of participants in these virtual worlds. Section III analyzes the
historical and contemporary legal framework and highlights the con-
cept of rivalrous consumption. Section IV examines how antitrust laws
may apply to publishers seeking control of third party after-markets.
Section V concludes that the boundary between intellectual and physi-
cal property should fall at that point where rivalrous consumption
begins.

* Mr. Schwarz is a Senior Managing Economist with LECG, LLC. He is also known in Norrath
as Guiscard Ndgociant of E'ci. Mr. Bullis is a graduate of the Boalt Hall School of Law at UC Berkeley
and has recently received his M.A. in economics at Berkeley.

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