Maybe you saw this story: A Chinese man (whose name is not given) has been sentenced to serve three years in prison for extorting "virtual items and currency" from a "fellow Internet café user." The currency was worth 100,000 yuan or $14,700.

The man who's sentenced to three years and the three friends who helped him also "extorted virtual equipment for online games" from their victim. The friends only seem to have been given a fine; the primary extortionist got both a fine and a jail time.

The virtual currency was QQ coins, which are sold by Tencent, a Chinese web portal; QQ coins can be used to buy items in online games pay for using Tencent's chat client, QQ. According to the PC World story , QQ had 377,000,000 active users at the end of last year, so it's obviously very popular, which presumably means QQ coins are in great demand.

The story also says Chinese law doesn't protect virtual property—which I assume means Chinese law doesn't recognize virtual property as something that has value and can be owned—but the court in this case held that the goods these guys took should be protected "because the victim spent time and money" to acquire them.

 I'm really not sure how far U.S. law, for example, has progressed in that direction because that issue that falls more in the area of expertise of lawyers who specialize in property and intellectual property than in the area of criminal law.

As I noted in an earlier post, U.S. criminal law has for some time protected certain types of intangible property. There's an Oregon case, for example, in which the defendant was prosecuted for computer theft based on copying a password file that belonged to his employer. As far as I can tell, the intangible property U.S. criminal law protects is really property that has value only in the real-world: e.g., passwords to access accounts on a corporate computer system, trade secrets, etc. I'm not saying those laws don't protect what I'm calling virtual property; I'm saying that issue hasn't come up yet, at least not in the criminal context.

That led me to wonder how the Chinese case would be handled in the U.S. So let's assume the same thing happened as happened in China: the primary perpetrator (we'll call him Mr. X) and his three cohorts beat up the victim (John Doe) to get him to turn over his virtual property.

Under the Model Penal Code—a template of criminal laws drafted by the America Law Institute which shaped contemporary U.S. criminal law—extortion is defined as follows: "A person is guilty of theft [by extortion] if he purposely obtains property of another by threatening to inflict bodily injury on anyone". Model Penal Code § 223.4(1).

The Model Penal Code defines property as "anything of value, including real estate, tangible and intangible personal property, contract rights, choses-in-action and other interests in or claims to wealth, admission or transportation tickets, captured or domestic animals, food and drink, electric or other power." Model Penal Code § 223.0(6). (If you're wondering, a chose in action is "essentially a right to sue.")

I can't find any reported cases in which the defendant was charged with extortion based on his or her using the threat of physical injury to force someone to surrender virtual property. It seems to me the Model Penal Code's definition of property—especially intangible property—would encompass virtual property. At least a few states have updated the definition of property used in their criminal statutes, including extortion statutes, to make it clear that digital property is included in it. Here's the New Jersey statute that defines "property" as the term is used in extortion, theft and other property crimes:

'Property' means anything of value, including real estate, tangible and intangible personal property, trade secrets, contract rights, choses in action and other interests in or claims to wealth, admission or transportation tickets, captured or domestic animals, food and drink, electric, gas, steam or other power, financial instruments, information, data, and computer software, in either human readable or computer readable form, copies or originals.

New Jersey Statutes § 2C:20-1(g). Based on some quick research, it looks like eight or nine other states have added essentially the same language to their definitions of property in their criminal codes.

Do I think the New Jersey legislature meant to include virtual property in this definition? I don't know, but I'm pretty sure they didn't, because they added the data and software part of the definition in 1984, long before we had the Internet and, I think, long before even the text-based virtual worlds were popular. It doesn't really matter whether they meant to include it or not; it looks to me like this language clearly encompasses virtual property.

(Of course, I could see a defense attorney arguing that this definition encompasses only the data that is used to create what we perceive as, and treat as, virtual property. That argument might come up if the defense wanted to show not that virtual property wasn't property, but that it's value was much lower than claimed, which could reduce the level of the offense being charged and/or the sentence imposed.)

It looks, then, like what Mr. X and his buddies did could be prosecuted as extortion in the nine or ten states that specifically include data and information within their definitions of property. They could also be prosecuted in states that still have the basic Model Penal Code definition, too, because I think the intangible property alternative would encompass virtual property. I'm not saying the defense can't argue otherwise; I'm saying I think the prosecution would have a really good argument that the theft of virtual property like the QQ coins could be prosecuted as extortion.

And that brings me to the final question: What would happen in this country if John Doe went to his local police department and told them some guys had beaten him up and taken his virtual currency and virtual property? Would the police take him seriously? Would they launch an investigation? And what about the prosecutor? Would a country district attorney (or an assistant district attorney) be willing to pursue this case and take it to trial or to a plea?

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3.25 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."