Offences Relating to Property

AuthorMatthew Richardson

Chapter 3

Offences Relating to Property


One of the most interesting issues to have arisen out of the development of computer technology has been in relation to the law of theft – in particular, whether such things as virtual property or business secrets can be stolen. It is not intended in this chapter to undertake an in-depth analysis on the law of theft but rather to look at a number of discrete points where the law of theft and computer technology meet.

The basic offence of theft is set out in section 1 of the TA 1968, which provides the following:

(1) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and ‘thief’ and ‘steal’ shall be construed accordingly.

(2) It is immaterial whether the appropriation is made with a view to gain, or is made for thief’s own benefit.

3.1.1 Procedure and sentencing

The offence of theft, by virtue of section 7 of the TA 1968, is triable either way. It carries a maximum sentence of 6 months’ custody and/or a fine not exceeding the statutory maximum upon summary conviction; and 7 years’ custody and/or a fine upon conviction on indictment.

72 Cyber Crime: Law and Practice

The Sentencing Council’s definitive guidelines1cover four types of theft: (a) theft in breach of trust; (b) theft in a dwelling; (c) theft from the person; and (d) theft from a shop. It is submitted that none of the guidelines properly covers offences involving theft of intangible property, particularly as regards potential offences of theft of virtual property or digital currency.

3.1.2 Elements of the offence

The elements of the basic offence of theft are set out in the statutory provisions of sections 2–6 of the TA 1968. A person commits theft where he or she dishonestly appropriates property belonging to another with the intention of permanently depriving the other person of it. These are well-established principles and, therefore, it is not intended to go into a more detailed discussion of these basic elements.

3.1.3 Intangible property

The definition of ‘property’ for the purposes of the offence of theft is given in section 4 of the TA 1968 as follows:

(1) ‘Property’ includes money and all other property, real or personal, including things in action and other intangible property.

This definition of ‘property’ is inclusive – almost anything can be stolen unless statute or common law exceptions deem otherwise. Intangible property and ‘things (choses) in action’ can also be the subject of the offence of theft. A ‘thing in action’ is a legal right over something, for instance bank credit (see R v Kohn (1979) 69 Cr App R 395 and R v Preddy [1996] AC 815), which can be appropriated by another. Other types of intangible property have been defined specifically by statute. For example, copyright and design rights are specifically designated as property under sections 1 and 213 of the Copyright, Designs and Patents Act 1988 (CDPA 1988) respectively, and patents are intangible property under section 30 of the Patents Act 1977 (PA 1977).

Property can be stolen from the owner of that property whether or not the owner is in possession or control of the property or from those who have interests in that property – for example an equitable interest in the property. Section 5 of the TA 1968 provides the following:

1See Sentencing Council, Theft and Burglary in a building other than a dwelling (Sentencing Guidelines Council, 2008), at http:/ _a_dwelling.pdf.

(1) Property shall be regarded as belonging to any person having possession or control over it, or having in it any proprietary right or interest (not being an equitable interest arising only from an agreement to transfer or grant an interest).

(2) Where property is subject to a trust, the persons to whom it belongs shall be regarded as including any person having a right to enforce the trust, and an intention to defeat the trust shall be regarded accordingly as an intention to deprive of the property any person having that right.

3.1.4 Virtual property and digital currency

Whether ‘virtual property’ or ‘digital currency’ can be stolen is an issue which may come to the attention of the courts in the near future. Whether or not it can be stolen would appear to hinge on whether or not it constitutes intangible property for the purposes of the basic offence under section 1 of the TA 1968.

Consider the phenomenon of online games such as SecondLife2and World of Warcraft3which allow individuals to develop alter egos – known as ‘avatars’ – through which they can live in a virtual world. Players can purchase virtual property for use in the virtual world from the game’s developers by paying for it in the ‘real world’. They can trade items within the game for digital currency, and the virtual property and digital currency can often be traded for real world currency outside the game, i.e. they have a realisable real world value. Some games even provide for users the ability to run businesses within the virtual world to create profits for themselves online that can be cashed in. In one notorious incident in the game SecondLife, a person made false deposits into an online stock exchange within the game and realised the profits – making off with around US$10,000.4The issue is whether such virtual property or digital currency is to be regarded as intangible property capable of being stolen.

There is clear authority in R v Kohn (1979) 69 Cr App R 395 that bank credit can be stolen as it constitutes a thing in action, i.e. the account holder does not actually own the money represented by the credit, but has a legal entitlement to claim that sum from the bank with which the money was deposited. Digital currency and virtual property may well be analogous to a bank credit and constitute a thing in action. If the game allows for digital currency and virtual property to be cashed in and out at will in exchange for real world money, then it may be seen as akin to a bank account. If such rights over the digital currency or virtual property exist, then it is arguable that gamer to whom the digital currency or virtual property



4See ‘Virtual Exchanges Get Real’, Bloomberg Businessweek, 10 August 2007.

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belongs exercises some ownership rights under section 5 of the TA 1968 as they arguably have an equitable interest in the digital currency or virtual property. This would be the case even if, as is usual in such games, the game operator maintains the overall ownership of the game and its constituent parts.

If it is indeed the case that virtual property and digital currency are intangible property, the next question would be how such intangible property may be stolen. Clearly, if the theft occurs ‘in game’ then that is a matter for the game operator and it does not engage the criminal law – for example, if a person commits theft in SecondLife that person may face sanction from the game operator or moderator, whereas theft in Eve Online5is one of the aims of the game. However, if a person appropriates the virtual property or digital currency of another person ‘outside of the sphere’ of the game, it is submitted that this may constitute theft. Consider, for example, a game player who takes control of another gamer’s account by, for instance, hijacking the account using an illicitly obtained password, and transfers virtual property to his own account without permission before cashing it out of the game. This is outside the sphere of the game and therefore, it is submitted, may be the subject of criminal sanction as theft under the TA 1968.

Whether such behaviour would ever attract a prosecution under the TA 1968 is another matter. In order to appropriate the virtual property or currency belonging to another, a person will inevitably have to secure unauthorised access to a computer or data held on a computer to do so. Therefore, that person will potentially fall to be prosecuted for an offence under section 1 or section 2 of the CMA 1990.

3.1.5 Confidential information and industrial espionage

The Cabinet Office’s 2011 report6on the cost of cyber crime to the United Kingdom estimated its total cost to be around £27 billion, of which more than £7 billion was attributed to the cost of espionage and over £9 billion to intellectual property theft.

However, although intellectual property theft is potentially a criminal offence, espionage is a different matter. There is long-standing authority that confidential information cannot be the subject of a prosecution for theft and does not fall within the definition of property under section 4 of the TA 1968. In Oxford v Moss

6The Cost of Cyber Crime (Cabinet Office and Detica, 2011), https://assets.publishing.service.

(1979) 68 Cr App R 183, a student had dishonestly taken an examination paper prior to an exam and had read it, returning it once he had done so. He was charged on the basis that he had stolen the confidential information contained in the examination paper, rather than the paper itself (of which the defendant had no intention to permanently deprive the university). The Divisional Court upheld the decision of the magistrates at first instance that there was no case to answer.

The same reasoning, it is submitted, must be applicable to confidential information gathered through industrial espionage. Of course, where the subject of the espionage is confidential...

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