Should Code be Property?

Computer code underpins the technology in our modern environment.  It is often a form of property, being the copyright of the authors.  But besides from that, could code become its own form of separate property?

Digital Assets

If you write a computer program, as the author you are the owner of the code.  You can license the use of the program on the terms that you decide to its users.  Those users do not gain any kind of rights, unless you see fit to give it to them.  Therefore, if you wrote the program for Space Invaders and a user plays the game and gets points, the points are merely a function of the code that you wrote and not some separate asset, except to the extent of your license with them.  If the user has paid the developer and the developer has warranted that the code will work in a particular way then there may be some contractual remedy if it does not.  If through an error in the code the points that the user has accumulated in Space Invaders suddenly disappear then the only remedy the user may have is under contract and will depend on the contractual terms.  The user has not lost some property in their accumulated points, notwithstanding that those points might be quite valuable to them.  For an amusing example of this there is the Seinfeld episode whereby George Costanza admits that the only thing that he has ever done well is get the high score in the game Frogger.  Unfortunately, the arcade machine that Frogger is going to be turned off and he will lose his score.  He then goes to outlandish lengths to save the arcade machine and keep what he considers his valuable high score.

Digital Lifestyle

While a high score in Space Invaders or Frogger might seem trivial, in our modern digital environment, there are many such created assets that are quite important to us. Facebook profiles and the photos that we have uploaded to them, music collection that you have purchased off iTunes, all the data collected about you as you use the internet. These are not property. The terms of your social media licensing agreement will typically prevent you from selling your profile, claiming some kind of ownership in what you have uploaded. 

At the whim of the host company, your account can be cancelled, even if you have millions of followers and thus immense value to you. If you no longer use iTunes, you don’t have some right to move the songs that you have downloaded to some other platform. And your personal data that is gathered by websites is owned by them and not by you.  

Although we might treat these things as our assets, we have no enduring rights to alienate them other than that which we have contracted or, in some limited circumstances, has been legislated. While they might be valuable and important to us, they are not property. But the question is should they be property?


New Types of Property

If you create property out of code, beyond copyright and any contractual licensing rights, to trample wholesale on the rights of the developers.  If your points in Space Invaders became property, whether by evolution of common law or by legislative intervention, and if the developer of Space Invaders no longer wished to maintain the program they might end up destroying your property.  Would they need to then commit to ongoing developments in their software for an unlimited period of time and to maintain operability with different devices and standards?  Or could they set their software at a particular point in time?  If there is a social media platform that has a type of account designed for individuals, but some famous individuals accumulate large numbers of followers and operate it in a commercial manner, the accounts could morph into rights held by a business and thus separate from the original intention of the platform provider.  If a social media account is valuable property does the platform have rights to terminate or restrict that property where the provider believes that the actions of the user compromise the environment that they are seeking to maintain for other users?  If you have downloaded music or movies subject to a license that the provider has obtained and has granted a subset of rights that have derived from their own limited license to use that copyright material, how could you create rights of transferability that are beyond the rights that the provider had themselves? 

It’s not simply enough to say that these things have value and therefore are property, there are many things that we value that are not property.  Love and affection is valuable but it is not property.  If our digital rights became property it also means that we could potentially criminalise mundane actions.  While making copyrighted material such as movies or music might give some truth to the campaigns about stealing movies or music, that does not seem a reason to create a proprietary right in them.  (Movies and music cannot be stolen in countries that do not treat copyright as property, despite claims of recording studios, because you have not taken their original material, a necessary component of theft.  Of course, warnings not to breach copyright licensing terms in relation to a movie or music doesn’t have the same ring to it as asserting theft.)

Intellectual Property in Crime

Understanding these problems, it seems that sometimes copyrighted material has been treated as property.  In Dixon v R [2015] NZSC147 the Supreme Court of New Zealand held that a digital copy of CCTV footage was “property” within the broad definition found in section 2 of the Crimes Act 1961.  The defendant had downloaded a copy of certain footage without the consent of the owner of the computer on which the footage had been recorded.  The court held that computer data can be “property” and that making a copy of it involves a taking, even when the data is not protected by a password. 

In the case of Henderson v Walker [2019] NZHC2184 Dixon was applied in a private law setting and extended to the tort of conversion to purely personal information, including the content of private emails.  Although merely making a copy of emails and other personal information would not amount to conversion, refusing access to them or destroying them would be nevertheless.  Cases have edged towards treating copyrighted information as property. 

While it may do justice in the matters at hand – no doubt there was wrongs to be righted – we should not ignore a body of law simply because it suits a particular desired outcome.  In particular if we create proprietary interest in copyright material out of the code we end up with a host of problems.  If the destruction of my emails can constitute property, does this mean I have a right to sue Microsoft in the event that a system update causes them to disappear?  But at a more fundamental level considering data as some kind of property is misguided.  While it may seem that we are able to copy and cut and paste and delete data, at the detail level what there is a bunch of 1’s and 0’s that are stored on one or more devices.  If those 1’s and 0’s become property, every time I move them I am creating fresh property!  Here is a slightly older example, if I defragment my disk drive, I am deleting data and then recreating it anew, even though it may appear to me that nothing is lost.  (Defragmenting is where data gets stored broadly across a drive, and it is then moved and re-ordered to a more compact place in the drive so as to speed up its access.)

Dealing with Code

Notwithstanding that code is not property, with creativity we can deal with it legally to produce the outcomes that we might desire.  If you wish to sell a social media account, even though it may breach the terms of service to do so, you may enter into restrictive covenants on each side such that the vendor will no longer use it.  If you wish to pass on to your children your extensive iTunes library, you can pass on to them the passwords and account details such that they can listen to it as you, although this is not an ideal outcome for a number of reasons.  Or you could simply copy the songs contained there, breaching the license, but in the knowledge that you have not stolen the songs that you have paid for.


Another matter is that of cryptocurrencies, which have attracted tentative treatment as property in a number of jurisdictions.  This includes New Zealand in the case of Ruscoe v Cryptopia Limited (In Liquidation) [2020] NZHC728 which drew on the aforementioned criminal law cases as inspiration to treat large holdings of bitcoin and other cryptocurrencies as property.  Although it may seem convenient to treat cryptocurrency as property, for the same reasons that it might seem convenient to treat other code as property, when considered at a more technical level you quickly create a morass of problems.  You are essentially turning the data contained in an accounting ledger into property.  It may seem that this is convenient, given that people that there is often tremendous value attributed to that ledger, tokens, and coins and other crypto “assets” are no more then points on a program.  In some cases, most famously bitcoin, the code is distributed and there is no developer who is the ultimate owner of the copyright.  This means that not only is there no legal relationship, there is not intended to be one.  If you’re going to radically change the fundamental property of common law, such as whether copyrighted code (or uncopyrighted code) constitutes some new addition to the forms of property, it should be done with great consideration of the further impacts that it may have.

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