HiPiHi's strategy is to be much more user friendly than Second Life. That being said, although you might be able to acquire a house much quicker and easier in HiPiHi, the design options may be more limited. This might allow for fewer artistic creations, including custom-designed avatars and other objects, but that remains to be seen.

Why is this important? Well, HiPiHi claims in its marketing materials that "Residents retain the Intellectual Property rights to their creations." Nifty, and this follows generally with Second Life's policies as well. As a lawyer, however, this makes me think of two questions: can you assign and license those creations? and what is the procedure, if any, for resolving IP disputes between two Residents? Oh yeah, one more question: how will ownership be registered in the game, in other words how will someone be able to prove that he/she is the rightful owner?

As to the first question, HiPiHi tells us:

OK, so now we're talking about assignment and licensing of copyrighted works – some real bricks and mortar legal work, if you will. However, one would assume that we are talking about some very small (price) transactions here, so no one is going to knock on my door and ask me to draft a copyright license agreement for their HiPiHi avatar. Maybe a generous lawyer will offer to work up a HiPiHi pro forma license agreement for free use.

Although I am not up to date with Second Life, I think the IP strategy there is to acknowledge that users have IP rights, but aside from limiting liability and ensuring that the game operator, Linden Labs, has certain usage rights, they are staying as far away from IP issues as possible. Makes sense to leave all that for the outside authorities, I suppose. Have a dispute? go get a lawyer and file a lawsuit (and leave us out of it).

However, I can't help but think that Second Life and other communities are missing something. Sure, your in-house counsel tells you to stay away from legal disputes. But come on, these are supposed to be virtual worlds – surely you will eventually need systems for resolving property disputes in virtual worlds. All anyone really owns in these communities is IP, so why not get involved?

And this is an opportunity for HiPiHi or another Chinese virtual community. What better way to showcase China's commitment to protecting IP rights than to show off a robust IPR system in a cutting-edge technology?

There are two parts to a good system, in my opinion: registration and dispute resolution:

If deals are made, there better be a robust registration system for IP transfers. One way to do this is a simple online transaction form. If I buy a house from my friend, we fill out the online transfer form and the asset is registered under my account. I get official notification from the game (my proof of ownership) that I can use later on if any problems arise.

But what to do, for example, when a Resident designs an avatar similar to someone else's? Again, going to court is out of the question because of direct and opportunity costs. As with the IP transfer issue, it would be great if Residents had access to some kind of quick and easy dispute resolution system.

My suggestion: make it part of the game. I bet there are plenty of geek IP lawyers out there who will be setting up shop eventually on HiPiHi anyway (Second Life already has its share of resident attorneys). Appoint some IP arbitrators (or start a co-op project with a law school) and draft some very basic rules. Keep it quick and simple, and Residents might buy into the idea. Come on, virtual IP court would be freakin' cool, not to mention groundbreaking. And the arbitrators won't be getting paid, so no one could really grouse about transaction costs and slick lawyers.

One thing I haven't figured out yet: for "real world" arbitration to work, you have to get parties to an agreement to accept arbitration as the sole dispute resolution method for certain issues. Otherwise jurisdictional messiness ensues between the arbitration body and the courts.

In this case, I don't expect that anyone would run off to court if they lose a virtual arbitration case, but you never know. People that get really pissed off do lots of stupid things, particularly when it involves artistic creations. Real court action would be inefficient and bad PR for everyone involved. Something to keep thinking about, I guess.

One final issue: interoperability. The buzz is that these massive communities will eventually build bridges. I think that's inevitable, but it also creates a potential problem for IPRs. Probably best to hold this issue for another post, but some day in the future (15 years from now?) I bet we are going to have über-databases of virtual assets that can serve as IP registrars.

Some background on the game from a recent article, an old post from Kaiser Kuo, and a link to HiPiHi's home page.