In February of 2005, Zhang Bin (“Zhang”) offered for sale one user account for the online game Paradise. On the sales ad, Zhang claimed his account has a high player level and excellent equipment. In March of 2005, Mr. Shen purchased Zhang’s Paradise account and password for 4800 RMB. Soon after Mr. Shen’s purchase, he noticed that his Paradise account had been stolen. After investigation, local police arrested Zhang on March 28, 2005 for theft. The case “Zhang’s Alleged Theft of Account” was heard by the Ningbo Haishu District Court. The court found that virtual property could be the subject of theft because virtual property is controllable and transferable without losing value. The court found that Zhang’s actions amounted to the crime of theft. Zhang was sentenced to one year imprisonment with two year suspension of sentence and a fine of 5,000 RMB.

The court’s decision was very brief and leaves us with a lot of questions. The stolen property was Shen’s Paradise account. However, the court’s opinion refers to virtual property generally. It is unclear whether the court was focused on the account or the equipment in the account or both. Chinese media reports on the decision generally takes a broad interpretation that even virtual equipment within the account is protectable. Game operators probably make a different interpretation because they want to take the position that any virtual property within the account belongs to the operator and not the player. For example, the Paradise end user agreement states “any equipment, character, electronic record, etc. all below to the company, users only have a right to use under applicable laws and game rules.” The court did not mention the Paradise end user agreement in its decision.

Although this decision left unresolved issues, it is an important case in that it signaled a movement toward judicial protection of virtual property.