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Today, piracy refers more commonly to the prohibited copying and distributing of software rather than to the hijacking of ships on the seas. With the advent of the Internet and the globalization of world economies, businesses and individuals alike have turned online to expand their customer base. Simultaneously, software pirates have seized this opportunity to produce and sell illegal copies of copyrighted material, especially in video and computer games. Still, the complications of copyright infringement are augmented by the diversity of governing laws in countries around the world. In part due to international game play and the mainstream use of the Internet, future game products will focus on Massive Multiplayer Online Role Playing Games (MMORPGs). In these games, players assume characters in virtual worlds. Such online communities are already developing their own rules and economies, as witnessed by the trading of virtual goods with real currencies. As a result, game companies have encountered new legal territories of copyright infringement and anti-circumvention regulation. It will become imperative to examine how legal rights and laws in the real world will affect these virtual worlds in the future. The development of game copyright laws will be fueled by efforts to combat game piracy, to drive innovation and technology, and to compete with globalization of world economies.

In the 1999 case Sony Computer Entertainment America, Inc. v. Gamemasters, Sony sought a preliminary injunction on Gamemasters’ distribution of accessories for the Sony Playstation game console. Sony alleged that Gamemasters violated anti-circumvention regulations of the Digital Millennium Copyright Act (DMCA) as well as state and federal unfair competition laws. Gamemasters, a retail store in California, was sued for selling a game enhancing device. The court granted the injunction and essentially eliminated all sales of such devices by Gamemasters.

This external device performed two primary functions when plugged into the Playstation game console. First, the game enhancer allowed users to temporarily modify aspects of the game, similar to the Game Genie, manufactured by Galoob Toys for use on the Nintendo. Nintendo v. Galoob Toys, as decided in 1992, declared that the Game Genie was not in violation of copyright laws as it was not a derivative work of the Nintendo console and the Game Genie was a fair use of the Nintendo game system. Second, and most importantly, this game enhancer permitted players to play Playstation games sold in Japan or Europe which were intended by Sony for exclusive use on Japanese or European consoles. The game discs contain electronic check codes which are checked by the console when inserted. Discs with codes that do not match the region in which the console operated were rejected. The game enhancer overrode this protection.

By invoking the DMCA, Sony stopped the use of potential copyright and trademark violating technologies. However, critics of the DMCA noted that this decision also allowed Sony to continue its controversial business practice. Sony divided its game distribution and operations into separate international regions. By disabling games from one region to be played in another, authentic Sony Playstation games played in one part of the world suddenly became illegal versions after crossing borders. With increasing video game products offering multiplayer and global competition, these restraints pose legitimate threats for the future of fair gaming, especially online games. Such restrictions enabled Sony to protect its anti-competitive business model and possibly promote price discrimination between different areas of the world.

Whereas many articles discuss the implications of real world law applied to virtual settings, Balkin examines the issues of freedom and regulation in these cyber worlds. The three primary types of freedom as outlined by Balkin are the freedom to play, the freedom to design, and the freedom to design together. These rights are similar to the real-world constitutional rights of the freedom of speech, the freedom of expression, and the freedom of association.

In the freedom to play, players choose whether or not they engage in virtual world games with their in-game characters and personalities. The freedom of design belongs to the developers of the games who construct and maintain the game and server upon which all players depend. The freedom to design together is perhaps the most important in terms of advancement and growth of the virtual community. Players and developers alike enhance the game through updates and contributions. Ultimately, this type of freedom, with some restrictions of course, drives the innovation of the game products, leading to an increase in consumer base and player satisfaction.

Some argue that rules in virtual worlds should develop on their own outside from real-world experiences. Yet, with the emerging field of using virtual worlds to simulate and test real life models, it becomes appropriate that actual law should have some significance in virtual communities. As the trading of virtual goods with real currencies continues, it seems inevitable for legal regulation in gaming worlds. Then, how will developers respond to outside law governing their gaming products? Constitutional laws, especially First Amendment rights, depend on the nature of the game and its community. There are games that are commercial in nature, while others are expressions of art and social interaction. In either case, the profitability of the game to the owner is irrelevant. Rather, the most important distinction in assigning real law onto online game communities should be in the game’s commercial and economic similarity to the real world.