Li Hongchen v. Beijing Arctic Ice Technology Development Co. Ltd.,

This is generally is regarded as the first instance of ‘virtual theft’ being recognised by a court.  The case concerns virtual items taken from a player’s account through some form of account hacking. The case was brought by the victim of the theft against the game company (rather than the other player) as the company refused to re-instate the virtual items.

While the details of the case are slightly complex, the final judgment (over turning an appeal) found that the game publisher has a duty of care to its players, and specially that in this case its security systems were insufficient to ensure that virtual items could not be transferred out of players account through hacking and that this act constitutes theft.

Li Hongchen claimed that when he logged into his account “President” on 17 February 2003 he found that all the contents, including such things as: ‘2 poisons’, 1 God of War’ had been sent to account SHUILIU0011. He asked for the details of the account but Arctic Ice refused to provide these as it would breach the personal privacy of the other player, they also stated that the action had nothing to do with them as the security of the account is the player’s responsibility. It seems like some of the items in question were generated through game play and some through ‘pet cards’ individual payment for a given item.

When the matter eventually went to court Arctic Ice made a number of general and very specific claims:

• the security of a player account is their responsibility (as defined in the ToS), hence any thefts form the account are the player’s responsibility;
• players are obliged to maintain standards of security and loss due to failure to meet this contractual obligation is their liability;
• operator obligations under Consumer protection law should be limited;
• virtual items are a ‘pile of data’ and do not constitute a ‘thing’ under Chinese Civil Law;
• there are three possibilities for why the items where no in the account: (1) stolen, (2) hacked at a network level, or (3) given away – and that the player could not prove that it was (1); and
• the account in question was not the players as it did not have the player’s name associated with it.

Li Hongchen made a number of counter claims:

• the account was his, and though he had used pseudonyms, the phone number on the account was his. Moreover he evidenced things such as game CD ROM, game cards and a whiteness; and
• while the ToS were agreed to when he initially registered for the game, the ToS were no displayed during the account re-charge process

The court found for Li Hongchen in respect of the return of the virtual items and costs, including the travel costs of his witness. Li Hongchen’s claim of compensation for ‘mental damages’ was not held.