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The Internet has generated a new set of assets known as “digital assets.” Broadly defined, a digital asset is an electronic record in which an individual has a right or interest. This definition erroneously implies that digital assets should be treated as a legally equivalent set of assets when, in fact, failure to differentiate digital assets into one of three distinct classes will result in legal difficulties.
These three classifications are based on the location, if any, of the digital asset. Unlike traditional assets, which normally reside in one physical location and under the control of the owner (documents in a home or a bank safety-deposit box), digital assets, such as emails, may reside in multiple physical locations and under the control of more than one party.
Failing to treat digital assets located in the owner's possession (such as the owner's personal computer) differently from digital assets located in the possession of a third party (such as on a Google server) may result in contract breach, copyright infringement and privacy violations, to name a few legal complications.
Similarly, digital assets that have no location, such as a domain name, must be treated differently from digital assets that have a physical location (such as on a local personal computer or a third party's server). Otherwise, legal issues such as jurisdiction, venue and governing law legal matters may arise.
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