- Bookmark
- Share
- CaseIQ
Lakeman, R. v
Factual and Procedural Background
The Game is an online role‑playing game published by Company A. Players hold accounts secured by usernames and passwords and accumulate in‑game wealth in the form of "gold pieces", obtainable by play or by purchase-linked mechanisms (bonds) which can be converted, indirectly, into gold pieces. Company A's published rules prohibit real‑world sale of gold pieces, but an active external market nonetheless exists. Each allocation of gold pieces is represented by instantiated digital data on Company A's servers.
The Defendant was employed by Company A as a content developer and, it is alleged, obtained unauthorised access to many player accounts (68 accounts) and transferred approximately 705 billion gold pieces to third parties, generating proceeds exchanged for fiat currency or cryptocurrency (approximate real‑world trading value alleged £543,123). The Defendant was indicted on five counts: unauthorized access to computer material (Computer Misuse Act), theft contrary to s.1(1) Theft Act 1968 (Count 2 alleging theft of gold pieces "belonging to Company A Ltd"), and three money‑laundering counts under POCA. The defence sought dismissal on the legal ground that gold pieces are not "property" within s.4 of the Theft Act. A preparatory hearing was held under s.29(1) Criminal Procedure and Investigations Act 1996. The trial Judge ruled for the defence, holding that gold pieces were not property (characterising them as non‑rivalrous or "pure information") and refused to leave the issue to a jury. The Crown appealed and this judgment decides that appeal.
Legal Issues Presented
- Whether "gold pieces" in The Game are "property" within the meaning of s.4 of the Theft Act 1968 for the purposes of s.1(1) (theft).
- If so, whether they constitute a "chose in action" or "other intangible property", and whether that property can be regarded as belonging to the player, to Company A, or to both for the purposes of s.5.
- Whether the relevant inquiry should focus on the instantiated coded data or on the functional/visual asset manifested in the virtual world.
- Whether established exceptions (notably the "pure information" principle) or public policy considerations exclude gold pieces from the Theft Act definition.
Arguments of the Parties
Prosecution's Arguments
- Attorney Kenyon and Attorney Gaunt submitted that gold pieces can be "other intangible property" within s.4 and are capable of belonging to a person for s.5 purposes; the issue should not be confined to private law proprietary rights.
- They emphasised that gold pieces are transferrable within the game, traded outside the game for real money, and can be the subject of dishonest dealing depriving a possessor of benefit—factors pointing to property status in the criminal context.
- They argued the court should treat the functional asset (gold pieces) as the object of property analysis, distinct from the underlying code.
Defendant's Arguments
- Attorney Eissa argued that gold pieces are not rivalrous and amount to "pure information"; the Judge was right to find they were not property because supply is effectively infinite and acquisition by new players does not deprive existing players.
- The defence relied on Company A's contractual/licensing framework (EULA, Terms and Conditions, Rules) to contend players lacked proprietary rights and that any rights were merely a revocable licence.
- It was also argued that if gold pieces were property this would trigger regulatory consequences (e.g., FCA/anti‑money‑laundering) which counsel said undermined treating them as property under the Theft Act.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| R v Defendant [2015] 1 WLR 4673 | Use of preparatory hearings to resolve issues of law that may dispose of a trial. | Cited to justify use of a preparatory hearing under s.29(1) CPIA for a novel legal issue likely material to verdict. |
| Company A v Plaintiff [1965] AC 1175 | Ainsworth criteria: definable; identifiable by third parties; capable of assumption by third parties; degree of permanence/stability. | The Court applied these criteria and held gold pieces satisfied them (but emphasised criminal context is distinct from private law). |
| Company A v Company B & others [2023] EWCA Civ 83 [2023] 4 WLR 16 | Use of "rivalrousness" as a relevant criterion for digital assets; discussion of cryptoassets as property. | Adopted the concept of rivalrousness as informative; Court relied on that reasoning to assess gold pieces' rivalrous character. |
| R v Defendant (1991) 93 Cr App R 25 | Approach to criminal damage and computers; illustrates different statutory definitions of "property". | Used to show criminal definitions can diverge and to focus inquiry on Theft Act language and purpose. |
| Plaintiff v Company A [2017] UKSC 67 [2018] AC 391 | Principles about divergence between civil and criminal law (noting different purposes). | Cited to support proposition that criminal law may recognise property differently from civil law. |
| Plaintiff v Company A [1940] AC 1014 | Meaning of "property" depends on statutory context and purpose. | Used to emphasise context‑sensitive approach to s.4 of the Theft Act. |
| R v Defendant [2001] 2 AC 241 | Interaction between civil proprietary titles and criminal appropriation under Theft Act. | Quoted to show criminal law may reach conduct that civil law treats differently; supports a broad criminal definition. |
| R v Defendant [2011] EWCA Crim 66 | Illegally held drugs can be "property" for Theft Act purposes despite public policy against civil recognition. | Relied on analogy that illegality or contractual prohibition does not prevent something being property in criminal law. |
| R v Defendant [1974] QB 754 | Possession and control as factual concepts for s.5. | Cited to show possession/control can ground "belonging to another" without civil proprietary title. |
| R v Defendant (No 2) [1971] 1 WLR 901 | Authority on possession and control under s.5. | Used to confirm factual possession/control suffices for s.5 analysis. |
| R v Defendant [1999] QB 621 | Common‑law exceptions regarding corpses/body parts; limits on property categories. | Noted as sui generis exceptions; court concluded they were irrelevant here. |
| Plaintiff v Defendant (1979) 68 Cr App R 182 | "Pure information" principle: confidential information/knowledge not property for Theft Act. | Applied to explain limits of Theft Act; court held gold pieces are not "pure information" in that sense. |
| Attorney General v Defendant [1987] 1 WLR 1339 | Export quotas were "other intangible property"; wide ambit of s.4; indicia include tradability and capacity for dishonest deprivation. | Adopted as persuasive authority that tradability and potential for dishonest deprivation indicate property status; applied to gold pieces. |
| Dutch Supreme Court, HR, 31 januari 2012, NJ 2012, 536 m.nt. Keijzer (Neth.) | Decision treating virtual items in The Game as "property" under Dutch law. | Viewed as supportive, though of limited direct relevance given different legal context; used illustratively. |
| AA v Persons unknown [2019] EWHC 3556 [2020] 4 WLR 35 | Treatment of cryptoassets as property in interim civil proceedings. | Referenced in discussion of civil jurisprudence recognising cryptoassets and as part of context for rivalrousness analysis. |
| R v Defendant [2015] NZSC 147 | New Zealand Supreme Court treated digital CCTV files as "property" in statutory context. | Court considered but found the decision of limited assistance because of differences in reasoning and statutory context. |
| Plaintiff v Defendant [2008] HCA 56 | Authority on contextual meaning of "property" (Australian High Court). | Cited for proposition that "property" varies by statutory context. |
| Plaintiff v The King [2025] VSCA 288 | Victorian Court held Bitcoin is property; emphasised distinction between code and asset and rejected "mere information" objection. | Found persuasive on conceptual points (distinguishing asset from code) though differences from gold pieces were noted. |
Court's Reasoning and Analysis
The Court framed the issue broadly: whether gold pieces are "property" under s.4 of the Theft Act, whether as "other intangible property" (not a chose in action), and irrespective of whether the asset belongs to players or Company A. The Court emphasised that the Theft Act definition is expansive and context‑dependent, and that criminal law may treat "property" differently from private civil law.
Applying the Ainsworth indicia, the Court found gold pieces are definable, identifiable by third parties, capable of transfer and have sufficient permanence/stability. The Court rejected the Judge's finding that gold pieces were non‑rivalrous or merely "pure information". It analysed the distinction between instantiated code (the underlying data) and the functional/visual asset manifested in the virtual world, concluding the relevant inquiry is directed to the functional asset, not the raw code.
The Court engaged the "pure information" principle from Oxford v Moss and related authorities: that mere knowledge/information is not property. It held gold pieces are not mere knowledge; they have functional, exclusive use within the game and real‑world tradability, and their use by one player prejudices others (rivalrousness). The Court relied upon comparative authorities on cryptoassets and export quotas to reinforce that tradability and capacity for dishonest deprivation are strong indicia of property status in the criminal context.
The Court also examined Company A's contractual/licensing documents (EULA, Terms and Conditions, Rules). It held those civil contractual provisions are not determinative of whether gold pieces are property for Theft Act purposes: possession and control under s.5 can be factual and need not align with enforceable private law proprietary rights.
The Court considered policy arguments (regulatory or economic consequences) and rejected them as decisive. It concluded there was no compelling public policy reason to exclude gold pieces from the Theft Act definition; on the contrary, criminal law ought to capture dishonest deprivation of assets that have ascertainable monetary value and are traded in practice.
Holding and Implications
HOLDING: The Court allowed the appeal and ruled that gold pieces within The Game are property capable of being the subject of theft under s.4 and s.1(1) of the Theft Act 1968.
Implications:
- Direct effect: The preliminary ruling of the trial Judge is reversed and the Crown may proceed on the theft count(s) alleging theft of gold pieces; the Defendant's contention that gold pieces cannot be property for Theft Act purposes is rejected.
- Scope: The Court emphasised this is a decision in the criminal context; it does not determine the existence or scope of private law proprietary rights in gold pieces beyond what is necessary for the Theft Act analysis.
- No categorical exclusion: The Court identified no new sui generis exception that would exclude comparable digital in‑game assets from the Theft Act, but it stressed that factual and legal features of particular digital assets remain relevant and may differ on other facts.
Alert