Pie in the Sky

As China drafts its first law on virtual property rights， experts look at the pros and cons

By Yin Pumin

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Pie in the Sky

As China drafts its first law on virtual property rights， experts look at the pros and cons

By Yin Pumin

On June 27， a draft of the proposed general rules of civil code was submitted to the Standing Committee of the National People’s Congress （NPC）， China’s top legislature，for its first reading.

One of the stipulations in the draft that is a matter of great public interest is that Chinese citizens will have property rights to both physical and virtual assets. They can also enjoy intellectual property rights to data information.

Yang Lixin， a law professor with Renmin University of China and Vice Chairman of the China Civil Law Society， told the Beijingbased Legal Daily that the law was important for protecting virtual property and data.

“It not only lays a legal foundation for Internet-based enterprises to enjoy property rights to virtual assets， but will also help push Internet Plus to a new level，” Yang said.

Virtual property means online digital assets including all kinds of data， online gaming equipment， e-accounts and e-currencies like QQ coins.

“The absence of a law has caused many disputes over online virtual property in recent years. It’s urgent to determine the ownership of data and other virtual property and ensure their protection in today’s information society，” Yang said.

Lack of remedy

Sun Chen can’t stop brooding over his misfortune last year.

The 32-year-old is a veteran World of Warcraft player. He has been playing the multiplayer， online role-playing game for seven years， spending nearly 80，000 yuan （$12，048）to buy the online gear needed for his character in the game. Then one morning， he found his gaming coins and equipment had been “stolen” overnight.

He complained to the customer service department of the company managing the game， but they said they had no obligation to help him get his stuff back. However， after months of exchanges and negotiations， they finally agreed to pay him 5，000 yuan （$752）in compensation.

Sun told Beijing Review it left him unhappy. “I don’t understand how the company can refuse to protect its customers’property，” he said. “Those virtual coins and equipment were my private assets.”

Many netizens have been in similar predicaments. But due to the absence of adequate laws， it’s hard for them to protect their e-assets.

“In such a situation， if one day an Internet company like Taobao uses its users’data to make extra profit， the users have no chance of winning if they contend the company has infringed on their virtual property. There is no law to clarify who really owns such properties，” Wang Sanshou， President of a research and investment firm Global Big Data Exchange， told China Youth Daily.

In July 2012， Taobao closed an online shop on its platform and took back all the data after the sudden death of the shop owner. The case raised the question of ownership rights and inheritance of virtual property.

Yang believes the draft will establish a legal base for protecting civilians’ virtual property.” With the base， it will be easy to strengthen the laws and regulations for protecting virtual property，” the legal expert said.

Equipment available for sale in the built-in shop of online game League of Legends

Age of big data

Once the law clarifies the ownership of virtual property， industries such as online gaming and big data applications will have greater room for development.

According to Wang， the big data trade in China has been facing a dilemma： Internetbased platforms like Taobao and Tencent cannot use the data produced by Internet users for other purposes due to the lack of a clear definition of data ownership.

A report on the development of big data trade in China by the National Development and Reform Commission indicated the hurdles faced by the industry. First， there was no clear definition on the law that data rights fall under—whether it is ownership or property law or intellectual property law.

The second problem was the ambiguity over ownership： who is the actual owner of data， users or Internet platforms？

Besides， the limits on controlling and using data have not been clarified. Moreover，data property rights protection has to be strengthened.

“The draft clearly states that data is a kind of intellectual property. Citizens have the right to own this intellectual property. If users’ data on online platforms like Taobao are used by these platforms for other purposes， the users have the right to claim their part of the profits，” Wang said.” These stipulations will help lift the limits on the trade in big data which is worth over 1 trillion yuan（$150.38 billion）.”

Yang agrees. He thinks the profits generated through the reuse of data by Internet platforms should be enjoyed by online users，including those data collectors and analysts.“The classification of data as intellectual property will help protect the interests of those users，” Yang said.

Clarity needed

Compared to developed countries， such as the United States and South Korea， China still has a long way to go where virtual property laws are concerned.

On November 1， 2010， Oklahoma State in the United States passed a law， including virtual property like uploaded digital photos and e-mails in the list of inheritance protected by law.

In South Korea， virtual assets is defined as “property.” The law makes no difference between virtual property and the money in bank accounts. Virtual property is equated with “electronic currency.”

Though China would welcome a law， the draft， however， needs amplification， experts said.

Qi Aimin， Director of the Research Institute for State Network Security and Big Data Legality Strategy with Chongqing University， told China Youth Daily that though the stipulation that one can have intellectual property rights to “data information” lays a legal foundation for the big data industry’s development， “data information”has not been defined correctly.

“‘Data’ and ‘information’ are two different things with their own connotations and extensions，” Qi said， suggesting that the draft could be modified using just “data” instead of “data information.”

Zhao Zhanling， a researcher with the China E-Business Research Center， said virtual property also needs to be defined more amply. “Issues such as what counts as virtual property and which virtual property can enjoy legal protection need to be clarified，”Zhao told China Youth Daily.

The researcher also said there should be an efficient standard to assess the value of virtual property like Weibo accounts， gaming equipment and Web credits. “If there are no clear explanations， it would be hard to assess cases concerning virtual property，” he said.

Wang Zongyu， an associate professor with the Law School of Renmin University，told China Youth Daily that even after the draft is approved by the top legislature， there may be problems.

“As the stakeholders， how can Internet platforms accept that virtual property belongs to their consumers？” Wang Zongyu said. “Another question is， how to obtain evidence when virtual property holders refuse to divulge information？” ■

Copyedited by Sudeshna Sarkar

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